Matthew J. Thomas, Keith B. Letourneau, Douglas J. Shoemaker, and Holli B. Packer ●
President Donald Trump issued an Executive Order (“EO”) on April 2, 2025, titled Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits. This EO introduces significant changes to the tariff landscape, imposing unprecedented tariff increases on most U.S. trading partners, which will have far-reaching implications for global trade and shipping. Below, we break down the key elements of the new tariff policies and their potential impacts.
Key Elements of the Executive Order
Global Tariff Implementation. The EO imposes a 10 percent global tariff on all imports into the United States, which became effective on April 5, 2025. For 57 countries identified in Annex I of the EO, an additional increase in tariffs for these countries was initially scheduled to take effect April 9, 2025, and has since been put on pause as negotiations take place, but that pause will not apply to sector tariffs. For additional information on the impact of the new tariffs announced in the April 2, 2025, EO, check out Blank Rome’s Recent Alert: Liberation Day: President Trump Unveils Global, Reciprocal Tariffs – What You Need to Know.
Product Exemptions. Annex II of the EO outlines various tariff exemptions, including certain mineral commodities, petroleum products, and pharmaceuticals. Among others, it also exempts items subject to Section 232 tariffs of the Trade Expansion Act of 1962, including automobiles and automobile parts, and steel and aluminum goods, from both the global tariff and increased reciprocal tariffs. Goods from Canada and Mexico that meet the United States-Mexico-Canada Agreement (“USMCA”) requirements are also excluded from these tariffs. However, imports that fail to qualify for duty-free treatment under USMCA remain subject to the 25 percent tariffs introduced in March 2025 (10 percent for energy and potash) under the International Emergency Economic Powers Act (“IEEPA”).
End of De Minimis Exemption and Chinese Tariffs Generally. The EO ends the de minimis exemption for goods valued at less than $800 from China and Hong Kong, effective May 2, 2025. Following administration’s latest announcement on April 9, 2025, tariffs imposed on Chinese goods surged to 145 percent. (Click here for President Trump’s April 2 amendment to the de minimis EO on China.) China has responded with a 125 percent tariff on U.S. goods.
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