So much has happened and continues to happen on the trade policy front in the U.S. It’s a good time to recap where we are today and where we expect to be in the near term.
The sweeping changes promised by the Trump administration to fund his planned tax cuts and balance the unfair trade policies of certain U.S. trade partners have begun at rapid-fire pace. It’s hard to keep up or understand exactly how these new tariffs work and will work in the future. To get started, let’s recap what’s been implemented to date.
Newly Implemented Tariffs Through March 12, 2025
Here’s what the Trump administration has implemented to date.
Let’s start with China – On Feb. 4, 10% additional tariffs were added to imports of Chinese goods with no exemptions except on Chapter 98 goods, essentially U.S. goods returned, and goods that left origin prior to Feb. 1 and that arrived in the U.S. before March 7. The new 10% tariffs may not be reclaimed through duty drawback programs.
An additional 10% was added on Chinese goods on March 4. The guidelines follow the Feb. 4 tariffs.
This means that tariffs on China will “stack.” To determine the duty you’ll pay on imported goods, you’ll need to add together the base duty rate, the original Section 301 tariffs (7.5% or 25%), the Feb. 4 10%, the March 4 10%, any other trade remedy tariffs that apply to your goods, and the new steel and aluminum tariffs if they apply to your product.
And let’s not forget the de minimis ban. While there is currently a pause on the ban, all imported goods from China, even those with a value of less than $800, will require formal entry reporting along with the above listed tariffs once U.S. Customs and Border Protection (CBP) has the systems and processes in place to manage the ban.
Let’s pivot to Mexico and Canada – 25% tariffs were also assessed against Mexico and Canada on Feb. 4 but were paused by the administration for 30 days while the three sides attempted to reach an agreement to avoid the tariffs. On March 4, however, the Trump administration reinstituted, and then once again paused on March 7, the 25% duties on all goods originating in Mexico and Canada until April 2. The temporary pause, however, only applies to goods that qualify under USMCA. Unfortunately, any duties paid between the March 4 and March 7 pause are non-refundable. These tariffs come without exemptions, except Chapter 98 goods as outlined above (and currently USMCA-qualifying goods until April 2). Canadian energy products have a reduced duty of 10%, and the new 25% tariffs may not be reclaimed through duty drawback.
As of this writing, the trade is still hopeful that the Trump administration will reach a last-minute agreement with Canada and Mexico to avoid reimplementation of these tariffs on April 2.
New Steel and Aluminum Tariffs – The Trump administration announced 25% tariffs on steel products from every country and a 15% increase on aluminum products above the 10% already in place, effective March 12. This executive order also eliminates all previous exemptions, placing the new tariffs on all imports of goods classified under Harmonized Tariff Schedule (HTS) codes contained in the order, with an exception only for products made from steel or aluminum “melted and poured” or “smelt and cast” in the U.S.
The list contains some “derivative” articles or products made from aluminum and steel. The 25% tariff applies to this list of goods, too, but only on the steel and aluminum component value in the product vs. the full value for goods classified in Chapters 73 and 76 of the USHTS. The effective date for these derivative goods is also March 12.
These new tariffs come with some new reporting requirements, such as the value of the steel or aluminum components for derivative products, the weight in kilos for derivative products, and the countries of smelt and cast or melt and pour for the steel or aluminum.
Copper and Lumber – New executive orders have opened investigations on copper and lumber products from Canada. The results of these investigations could result in additional product and country-specific tariffs, similar to those outlined above.
Digital Services Tax (DST) – The Trump administration has opened an investigation on the impacts of foreign countries’ DSTs and other regulatory measures on U.S. tech companies and consumers. The U.K., Canada, Italy, France, Spain, Austria, and Turkey are specifically mentioned in the order, but all countries are covered. The investigation could result in additional tariffs on any country found to be treating U.S. businesses or consumers unfairly.
Reciprocal Tariffs – Estimated to have an effective date after April 1, 2025, the newly announced reciprocal tariffs could be placed on any country around the globe. The administration has directed government agencies to conduct investigations, arriving at an equivalent reciprocal tariff rate for each U.S. foreign trading partner, taking into account tariffs imposed by that country on U.S. exports, perceived unfair taxes on U.S. entities (e.g. value-added tax or VAT), costs from non-tariff barriers like subsidies and burdensome regulations (e.g. intellectual property rights violations & digital trade barriers), policies that manipulate exchange rates, and any other practice that the U.S. deems as an unfair limitation on market access or fair competition.
The exact timing for the implementation of reciprocal tariffs on any country is unknown, but investigations have already begun. Experts believe the administration will begin with countries with the biggest trade deficits with the U.S. One might assume free trade partners are exempt as duties on the U.S. are zero, but given previous experience, they can’t be completely ruled out. Vietnam could be most exposed because of its high trade deficit with the U.S., high average tariffs on U.S. goods, and non-market control over its currency. Cambodia, Bangladesh, and India face similar challenges, with Malaysia seen as lower risk. Europe also has some high import duties on U.S. goods with Germany being high on the administration’s list.
Enforcement Ramps Up – Amidst all this change, CBP issued guidance last week on the calculation of the new tariffs, making it clear it expects full compliance from the trade community for accurate reporting and payment of these additional duties. CBP said it will take enforcement action on patterns of non-compliance.
Ships Act – Big Fees on Chinese Vessels Calling U.S. Ports – This measure began with a Section 301 investigation that resulted in the Biden administration finding violations by the Chinese shipbuilding industry. The Trump administration has now opened a comment period ahead of a scheduled public hearing on March 24 about its proposed actions to charge Chinese vessel operators and flagged carriers more than $1,000,000 in penalties per entrance to any U.S. port. Chinese-built vessels, Chinese-flagged vessels, and carriers with prospective orders of Chinese vessels could all be assessed multiples of these penalties on any U.S. port call.
For example, entrance fees on a ship calling three U.S. ports in a single sailing could be charged the equivalent of $120-$500/20-foot container, depending on the number and type of the above listed violations, which will most certainly be passed along to the importer or exporter by the carrier. Steamship lines across all trades operate Chinese-built vessels, including in both the Trans-Atlantic (Europe) and Trans-Pacific trades. Experts also believe these potential new costs could drive some carriers to eliminate smaller, secondary U.S. ports from their rotations, resulting in congestion and higher freight costs.
More concerning for importers and exporters is the proposal to require cargo owners to track the amount of cargo they ship on non-U.S. vessels in the future, report those statistics, and meet certain thresholds for the amount of cargo shipped on U.S. vessels.
Summary of New Tariffs and Trade Policy Changes
To help businesses quickly assess the latest developments, this table provides an overview of key trade actions, affected countries, tariff classifications, and implementation details. This snapshot includes tariffs imposed on China, Mexico, Canada, and various metals and derivatives, as well as upcoming reciprocal tariffs that could impact a wider range of global trade relationships.
New US Import Tariff Actions Quick Reference Guide
What Might Be Next
Government Agencies Complete America First Review on April 1 – The Trump administration’s first executive order that required government agencies to investigate U.S. trade policies and trade agreements will be completed in April. Potential changes to USMCA, for example, might come from this review, but as the scope of the order was quite broad, the trade is bracing for any number of actions.
Tariffs on Goods Made by Chinese Companies Outside of China – The administration’s concern about Chinese companies moving production to third countries like Mexico and Vietnam could result in some future measure that adds tariffs on these entities.
100-200% Tariffs on Goods Manufactured in Mexico Formerly Made in America – This potential measure has fallen out of the spotlight but remains an administration priority.
Tariff on Goods from BRICs Countries – The president has commented on this point more than once since taking office. Watch carefully for any movement that could raise tariffs on this bloc: Brazil, Russia, China, India, Iran, South Africa, UAE, Egypt, Indonesia, and Ethiopia.
Product-Specific Tariffs on Pharmaceuticals and Semiconductors – President Trump and administration officials list future product-specific tariffs on pharmaceuticals and semiconductors as a priority.
Retaliatory Measure – If you are an exporter, anticipate retaliatory measures by the countries impacted by these new tariffs on your goods. Some of these retaliatory duties are already in place and some have been announced in advance of proposed U.S. measures. To get help sorting through the noise, contact your Dimerco expert for help.
Fighting Trade Cheats Act in Congress – This is not an executive order, but a bill introduced in Congress with bipartisan support. It would double compliance fines and penalties and allow for a five-year ban on importing for repeat violators. This measure signals the importance of a strong compliance program for all importers.
Level the Playing Field Act – Introduced in Congress with overwhelming bipartisan support, this bill would update trade remedy laws and allow the U.S. government to track companies that move production to a new country after a negative anti-dumping or countervailing duty finding. It also expedites investigations and makes it easier to investigate when a Chinese company moves production to a third country. It would further allow the Department of Commerce to consider subsidies provided by the Chinese government to a Chinese company that operates a manufacturing facility in a third country, applying tariffs on goods from those entities to “level the playing field.”
What You Can Do to Stay Ahead of the Game
All of this change can seem overwhelming! What can you do to stay ahead of the game? Here are some tips from Dimerco’s experts.
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- China Plus One Strategy: Near and friend-shoring strategies make sense, while limiting heavy investment in any single-source location. Proceed carefully, ensuring that when you do resource, the goods are actually manufactured in the new location, and are not just assembled or packaged there. Require your suppliers to certify in writing that sufficient component material sourcing and manufacturing is occurring in the new source location to drive a country of origin shift.
- Outsource: Until the trade policy landscape is clear, leverage your service provider’s assets, intelligence, and expertise to help manage your business through these changes. Be wary of committing your own resources to a particular market as trade policies in that region could shift quickly.
- Move Slowly: Announcements by the president indicate no source location offers safety from new tariffs. Proceed carefully to ensure sourcing shifts make sense, your new source country isn’t the target of new tariff measures, and logistics costs, lead time, or quality issues don’t outweigh duty savings.
- Know Your Supply Chain: Explore budget-friendly trade compliance and supply chain technology that enables good visibility into your supply map down to the component level. You need data to stay nimble. The new landscape is going to require you to act quickly to stay ahead of the competition.
- Play the Hand You’ve Been Dealt: Partner with your service providers to explore opportunities for exclusions from new tariffs, opportunities to tariff or origin engineer your products, or avoid duty payments through FTZs and drawback programs.
- Stay Compliant: The incoming administration, alongside several congressional committees, will place pressure on CBP and DHS to strictly enforce compliance. Expect increased scrutiny on compliance practices and enhanced fines and penalties.
- Engage Trusted Advisors: Engage trusted advisors, like Dimerco, to help test out new markets, move your goods seamlessly on new trade lanes, leverage opportunities to your advantage, and stay up to date on what’s happening in the trade policy space. It’s easier to navigate this rapid pace of change with a best-in-class partner by your side.
Get Expert Guidance from Dimerco
Keeping up with evolving trade policies can be complex, but you don’t have to do it alone. Dimerco’s global logistics experts can help you assess the impact of these changes and create strategies to strengthen your supply chain. Contact us to start a discussion and stay ahead in an ever-changing trade environment.
