As the United States continues to implement and adjust elevated tariffs on a wide range of foreign-origin imports, accurate classification of goods under the Harmonized Tariff Schedule ("HTS") has become a critical compliance priority for U.S. importers. Recent developments, including changing reciprocal tariffs, fentanyl-related tariff actions, and evolving product exclusions, have made HTS codes the gateway to both significant financial exposure and potential tariff relief. Against this backdrop, even small import classification errors can lead to costly penalties or missed tariff exclusion opportunities. This article explores the latest tariff developments and highlights how importers can navigate the growing risks and responsibilities associated with HTS classification in today's trade landscape.
Volatile Tariff Landscape
Since returning to office in 2025, President Trump has reasserted an aggressive tariff strategy aimed at addressing national security concerns, strengthening U.S. manufacturing, and re-shaping U.S. trade relations on a global scale. The tariff measures enacted over the past several months have impacted imports from all countries, most notably through "reciprocal" tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"). In addition to the reciprocal tariffs, President Trump has also imposed punitive tariffs on China, Mexico, and Canada pursuant to the IEEPA to address threats posed by illicit trafficking of fentanyl from these countries into the U.S. ("fentanyl tariffs").
The tariff measures have undergone several rounds of changes resulting in multiple increases and decreases to duty rates for certain imports and making it difficult for importers, and others involved in international trade, to keep up with rapid developments and assess potential tariff impacts. Tariffs on Chinese imports in particular have been a primary source of contention between the U.S. and China and as a result have seen the most variability over the past several months. In April, for example, President Trump introduced the "reciprocal tariff" rate for Chinese imports as 34%, a tariff rate that would be assessed on top of the 20% fentanyl tariff already in place (raised from 10% to 20% on March 4, 2025) for imports of Chinese-origin goods. After China imposed increased tariffs of its own on imports of U.S.-origin goods, President Trump responded by increasing the reciprocal tariff rate for Chinese imports on April 8, 2025, from 34% to 84% and again on April 9, 2025, from 84% to 125%.1
Tariff Stacking
Although trade tensions between the U.S. and China have begun to reduce and tariff rates have accordingly decreased from the elevated rates imposed in April, increased tariffs on imports from China, as well as all other countries, remain in place pursuant to several different tariff actions under various legal authorities. For Chinese imports in particular, total tariff rates can add up to over 55% (10% reciprocal tariff + 20% fentanyl tariff + 25% tariff on most imports of Chinese goods pursuant to Section 301 of the Trade Act of 1974). Additionally, certain products can be subject to specific tariff measures pursuant to Section 232 of the Trade Expansion Act of 1962 (i.e. steel, aluminum, automobiles) and anti-dumping and countervailing duties ("AD/CVD") that can also increase the total amount of duties owed on foreign-origin imports. As such, strategies to mitigate tariff impacts have become increasingly important for U.S. importers dealing with unprecedented Customs duties.
Tariff Exclusions & Compliance Pitfalls
The clearest avenue for reducing the impact of increased tariffs is to qualify for a tariff exclusion identified under certain tariff actions. Notably, several product categories are currently excluded from reciprocal tariffs in place for all foreign-origin imports. These categories include certain mineral products, semiconductors, chemicals, animal products, and machinery and mechanical appliances. On April 11, 2025, President Trump issued a Memorandum clarifying additional products excluded from reciprocal tariffs under the "semiconductor" category including automatic data processing machines, flat panel display modules, and smartphones.
For importers of certain Chinese-origin products, exclusions from Section 301 tariffs can also provide significant relief from these tariff measures impacting a wide-range of products from China that have been in place since the first Trump administration. Most recently, on May 30, 2025, the United States Trade Representative ("USTR") extended tariff exclusions for a variety of products covered by the Section 301 actions from May 31, 2025, through August 31, 2025. Importantly, both the reciprocal tariff exclusions and Section 301 exclusions are based on product classifications under the Harmonized Tariff Schedule ("HTS"). As such, actions like the April 11th Memorandum on semiconductor product exclusions and the May 30announcement of exclusion extensions can prompt importers to consider whether any products they are currently importing may fall under HTS codes subject to tariff exclusions. While evaluating the accuracy of HTS classifications is standard to import compliance, doing so against the backdrop of heightened tariffs and potential relief under certain excluded HTS codes increases risk for potential HTS classification mistakes, misunderstandings, and even fraud on the part of suppliers, brokers, and importers attempting to evade proper application of import tariffs.
The rapidly changing tariff landscape has put a spotlight on import enforcement and oversight by the U.S. Customs and Border Protection ("CBP" or "Customs"). Importers currently assessing whether their products may "fit" within an HTS code subject to certain tariff exclusions should keep in mind the risks associated with heightened CBP scrutiny in this area. For example, an importer that switches the HTS classification for a product that has historically been entered under a different HTS code to one that is subject to recently announced tariff exclusions can become subject to increased scrutiny by CBP. In addition, frequently utilized HTS codes most recently excluded from reciprocal tariffs, such as those that cover a broader range of products like "smartphones" and "machines for the reception, conversion and transmission, or regeneration of voice, images or other data, including switching and routing apparatus" under HTS subsection 8517 can trigger heightened scrutiny by CBP as importers attempt to apply these codes (and applicable exclusions) to new or additional products.
As such, it is not uncommon for importers declaring new HTS codes subject to tariff exclusions to receive CF-28s from CBP requesting information to evidence the correct application of a certain HTS code. These requests for information will often require an importer to submit documentation and explanation as to why a product "fits" under a declared HTS code that is subject to a tariff exclusion. Thus, it is now more important than ever for importers to ensure they have effective import compliance systems in place that include structured procedures on HTS classification processes and related record-keeping. While it is common for importers to receive HTS classification guidance from their Customs brokers, independently reviewing HTS codes, or where appropriate, seeking classification advice from external or internal legal counsel, can help to ensure proper import compliance and mitigate risks in this new environment of increased Customs enforcement.
As tariff rates remain elevated and enforcement scrutiny intensifies, U.S. importers must navigate an increasingly intricate compliance landscape marked by overlapping duties, evolving product exclusions, and growing pressure to classify goods correctly under the HTS. The Trump Administration's continued reliance on IEEPA and other authorities to implement and adjust tariff rates, often in rapid succession, underscores the need for importers to stay proactive, well-informed, and strategically engaged in import compliance. Careful attention to HTS classifications, documentation practices, and internal review processes is no longer just best practice, it is essential for seizing any available relief and mitigating legal compliance risks in a volatile trade environment.
Footnote
1. See our "Torres Trump Trade Table" for the latest updates on tariffs and other executive actions.
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