Executive Orders and Additional Tariffs
On February 1, 2025, President Trump issued three Executive Orders to impose tariffs on products from Canada, China, and Mexico, with an effective date of February 4, 2025. However, on February 3, 2025, it was announced that the tariffs on products from Mexico and Canada would be delayed until at least March 4, 2025. The tariffs on products from China and Hong Kong remain in effect.
China
Effective: 12:01 a.m. EST on 02/04/25
Goods loaded onto a vessel at the port of loading or were in transit to the final modes of transport before entering the U.S. prior to 12:01 a.m. EST on February 1, 2025, will not be subject to the additional 10% duty. This special provision is only valid to entries filed before 12:01 a.m. EST on March 7, 2025.
An additional ad valorem rate of duty of 10% on all imports from China and Hong Kong
9903.01.20: All imports of articles that are products of China and Hong Kong, other than products classifiable under headings 9903.01.21, 9903.01.22, and 9903.01.23, and other than products for personal use included in accompanied baggage of persons arriving in the United States.
The additional ad valorem duty provided for in new HTSUS heading 9903.01.20 applies in addition to all other applicable duties (including antidumping and countervailing duties), taxes, fees, exactions, and charges.
The standard of determining the origin of the good is substantial transformation.
Goods that may have received an exclusion from section 301 tariffs must still pay the 10% duty.
Products Excluded from Additional 10% Tariff if:
9903.01.23: Goods loaded onto a vessel at the port of loading or were in transit to the final modes of transport before entering the U.S. prior to 12:01 a.m. EST on February 1, 2025, will not be subject to the additional 10% duty. This special provision is only valid to entries filed before 12:01 a.m. EST on March 7, 2025.
Goods that are for personal use.
Goods entered under Chapter 98 HTSUS including:
9802.00.40 or 9802.00.50 (repairs/alterations) tariffs apply on value added in China and Hong Kong
9802.00.60 (metal articles processed abroad) tariffs apply on value added in China and Hong Kong
9802.00.80 (assembly of US components) tariffs apply on value added in China and Hong Kong
9801 goods exported from the US and returned from China and Hong Kong not subject (even if China and Hong Kong origin)
Other Chapter 98 goods are excluded
Donations of food, clothing and medicine intended to relieve human suffering (claim HTSUS 9903.01.21 for the exemption)
Merely informational materials (claim HTSUS 9903.01.22 for the exemption)
Federal Register Notice 85 FR 43413, July 17, 2020; Executive Order (EO 1396); Executive Order (EO 14195), February 1, 2025; Federal Register Notice (FR Doc. 2025-02408), February 7, 2025.
Foreign Trade Zones
Articles that are products of China and Hong Kong, excluding those encompassed by 50 U.S.C. 1702(b), except those that are eligible for admission to a foreign trade zone under “domestic status” as defined in 19 CFR 146.43, and are admitted into a United States foreign trade zone on or after 12:01 a.m. eastern standard time on February 4, 2025, must be admitted as “privileged foreign status” as defined in 19 CFR 146.41. Such articles will be subject, upon entry for consumption, to the duties imposed by this order and the rates of duty related to the classification under the applicable HTSUS subheading in effect at the time of admission into the United States foreign trade zone.
Drawback
No drawback is available with respect to the additional duties imposed pursuant to the Executive Order, as implemented in the Federal Register Notice.
De Minimis
Initially, certain products of China and Hong Kong are no longer eligible for the administrative exemption from duty and certain tax at 19 U.S.C. § 1321(a)(2)(C) and are subject to additional ad valorem rates of duty. Accordingly, effective February 4, 2025, such goods may not receive so-called “de minimis” clearance and enter duty and tax free. Requests for de minimis entry and clearance for ineligible shipments will be rejected. The filer/importer has the option of filing an appropriate formal or other informal entry and paying all applicable duties, taxes and fees.
Modified February 5, 2025, via Executive Order (EO), as of February 7, 2025, not yet published in the Federal Register
However, per Executive Order, “Amendment to Duties Addressing the Synthetic Opioid Supply Chain in the People’s Republic of China”, on February 5, 2025, “Duty-free de minimis treatment under 19 U.S.C. 1321 is available for otherwise eligible covered articles described in subsection (a), but shall cease to be available for such articles upon notification by the Secretary of Commerce to the President that adequate systems are in place to fully and expediently process and collect tariff revenue applicable pursuant to subsection (a) of this section for covered articles otherwise eligible for de minimis treatment.”
Canada
Status: Postponed 30 days to March 4, 2025
An additional ad valorem rate of duty of 25% on all imports from Canada, except that only a 10% tariff will be imposed on Canadian “energy or energy resources”.
The term “energy” or “energy resources” means crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals, as defined by 30 U.S.C. 1606 (a)(3).
Presidential Memorandum, January 20, 2025 (America First Trade Policy); Executive Order (EO 14157), January 20, 2025; Executive Order (EO 14193), February 1, 2025; Federal Register Notice (FR Doc. 2025-02291); Federal Register (FR Doc. 2025-02406), February 6, 2025.
Executive Order 14197, “Progress on the Situation at Our Norther Border”, postponed the implementation of the additional tariffs to March 4, 2025. It was determined the “Government of Canada has taken immediate steps designed to alleviate the illegal migration and illicit drug crisis through cooperative actions. Further time is needed, however, to assess whether these steps constitute sufficient action to alleviate the crisis and resolve the unusual and extraordinary threat beyond our northern border.”
Executive Order (EO 14197), February 3, 2025; Federal Register Notice (FR Doc. 2025-02478), February 10, 2025.
Mexico
Status: Postponed 30 days to March 4, 2025
An additional ad valorem rate of duty of 25% on all imports from Mexico.
Proclamation 10886, January 20, 2025, Executive Order (EO 14194), February 1, 2025; Federal Register Notice (FR Doc. 2025-02407), February 6, 2025.
Executive Order 14198, “Progress on the Situation at our Southern Border”, it was determined that the “Government of Mexico has taken immediate steps designed to alleviate the illegal migration and illicit drug crisis through cooperative actions. Further time is needed, however, to assess whether these steps constitute sufficient action to alleviate the crisis and resolve the unusual and extraordinary threat beyond our southern border.”
Executive Order (EO 14198), February 3, 2025, Federal Register (FR Doc. 2025-02479), February 10, 2025.
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