04.03.25 – Laufer Client Advisory: Reciprocal Tariffs, Auto & Auto Part Tariffs, and De Minimis Resolution

In a formal address on Wednesday, April 2, the President announced sweeping reciprocal tariffs and signed a resolution addressing the ‘de minimis loophole’. Additionally, the Federal Register Notice detailing the implementation of the Automobile and Auto Part tariffs proposed last week, was also published yesterday.

RECIPROCAL TARIFFS

The Executive Order issued yesterday from the White House, establishes a new International Emergency Economic Powers Act (IEEPA) reciprocal tariff of 10% on all goods imported into the United States. This tariff will affect any import processed through U.S. Customs beginning April 5, 2025. An exemption is provided for goods already loaded onto vessels destined for the U.S. before April 5.

Furthermore, the Executive Order includes country-specific tariffs, which are higher than the standard 10% rate. These specific rates will replace the 10% tariff for the listed countries and will be implemented on April 9, 2025, and includes an in-transit exemption for goods shipped by vessel before April 9.

The full list of Reciprocal tariff rates by Country can be found in Annex I of the Executive Order

There are some exclusions to the reciprocal tariffs, which are important to note:

• Goods exempted under 50 U.S.C. 1702 (Goods that are for personal use, donations of food, clothing and medicine intended to relieve human suffering, merely informational materials, etc.).
• Steel/aluminum articles and autos/auto parts already subject to Section 232 tariffs
• Copper, pharmaceuticals, semiconductors, and lumber articles
• Bullion
• Energy and other certain minerals that are not available in the United States

A full list of the excluded HTS codes can be found in Annex II of the Executive Order

Canada and Mexico were not assessed with an additional reciprocal tariff, so they remain subject to the existing 25% IEEPA tariff, with USMCA qualifying goods being exempt.

These new reciprocal tariffs do not replace any existing tariffs in place, and they all ‘stack,’ with the exception of Section 232 tariffs and excluded goods.

For example, a product with Country of Origin China may have all of the following duty rates applicable at the time of entry:

Product base duty rate (determined by 10 digit HTS code) + Section 301 tariff of 25% or 7.5% + IEEPA tariff of 20% + IEEPA Reciprocal tariff of 34%.

The White House Fact Sheet on these new tariffs can be found HERE

25% TARIFF ON AUTOMOBILES AND AUTO PART IMPORTS

The Federal Register Notice finalizing the implementation of the new automobile/auto part tariffs was posted yesterday. Section 232 of the Trade Expansion Act of 1962 has been leveraged to impose a 25% tariff on imports of passenger vehicles, light trucks, and some auto parts.

There are exceptions outlined for goods qualifying under the United States-Mexico-Canada Agreement (USMCA): passenger auto importers will have the opportunity to follow procedures which will allow them to only pay the 25% tariff on non-US content, and importers of auto parts which qualify for USMCA will be exempt from the 25%, for now.

This new tariff on automobile and light truck imports is effective today, April 3, 2025 and applies to all countries of origin.

Impacted HTS codes:

8703.22.01                      8703.23.01                       8703.24.01
8703.31.01                       8703.32.01                       8703.33.01
8703.40.00                     8703.50.00                      8703.60.00
8703.70.00                     8703.80.00                      8703.90.01
8704.21.01                      8704.31.01                        8704.41.00
8704.51.00                     8704.60.00

This new tariff on auto parts is effective on May 3, 2025 and applies to all countries of origin.

Impacted HTS codes:

Additional information:

• Executive Order Posted March 26 ADJUSTING IMPORTS OF AUTOMOBILES AND AUTOMOBILE PARTS INTO THE UNITED STATES

ELIMINATION OF DE MINIMIS PROVISION FOR GOODS FROM CHINA & HONG KONG

President Trump signed an Executive Order on April 2nd, eliminating duty-free 'de minimis' treatment for low-value imports from China and Hong Kong, effective May 2nd, 2025. The order requires a report within 90 days with recommendations on further actions, including whether to extend the policy to Macau.

Non-International Postal Shipping:

• Goods that are country of origin China (including Hong Kong) that are shipped by any means other than by international postal network - are not eligible for de minimis treatment effective May 2, 2025

International Postal Shipping:

Goods that are country of origin China and Hong Kong that are shipped by international postal networks that would typically be eligible for de minimis will be subject to a duty rate equal to either:

• 30% of their value or $25 per item effective May 2, 2025
• $50 per item effective June 1, 2025

The below information is outlined in the White House Fact Sheet:

“Imported goods sent through means other than the international postal network that are valued at or under $800 and that would otherwise qualify for the de minimis exemption will be subject to all applicable duties, which shall be paid in accordance with applicable entry and payment procedures,”

“All relevant postal items containing goods that are sent through the international postal network that are valued at or under $800 and that would otherwise qualify for the de minimis exemption are subject to a duty rate of either 30% of their value or $25 per item (increasing to $50 per item after June 1, 2025). This is in lieu of any other duties, including those imposed by prior Orders”

 PROPOSED 25% TARIFF ON COUNTRIES WHICH IMPORT VENEZUELAN OIL

 **NO ACTION TAKEN ON THIS PROPOSAL DURING THE ANNOUNCEMENT ON 4/2/25**

 [Below Last Update as of 3.26.2025]

Leveraging the International Emergency Economic Powers Act (IEEPA), the White House issued an executive order On March 24, 2025, proposing a 25% tariff on countries importing oil from Venezuela. China, India, Spain, Cuba, Brazil, and Turkey are identified as primary targets due to their high import volumes. Several other nations, including Italy, Russia, Singapore, and Vietnam, could also be affected, though to a lesser degree. The proposed tariff is set to take effect on April 2.

NO FORMAL LIST OF IMPACTED COUNTRIES IS AVAILABLE AT THIS TIME. We will likely not have visibility to this until additional country specific Executive Orders and/or the Federal Register Notice is posted.

Presidential Actions Imposing Tariffs on Countries Importing Venezuelan Oil

Should you need further information or have any concerns or queries, please contact your local Laufer Customer Service, Customs Brokerage or Sales Representative.

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