On April 2, 2025, President Donald Trump released an executive order (EO) announcing a sweeping set of tariffs aimed at combatting a growing U.S. trade deficit. President Trump utilized his authority under the International Emergency and Economic Powers Act (IEEPA) to implement the new levies under a national emergency, as declared in the EO, “posed by the large and persistent trade deficit.”
Tariff Rates
Effective April 5, 2025, most imported goods will face a 10% baseline tariff.
Effective April 9, 2025, more than 80 countries, including those in the European Union, will be subject to reciprocal tariffs. A chart of the tariffs that may be most transformative for business is shown below, and a complete list of rates can be found here.
|
Country |
Tariff Rate |
|
China |
54%* |
|
European Union (27 countries) |
20% |
|
Japan |
24% |
|
India |
27% |
|
Vietnam |
46% |
|
Cambodia |
49% |
|
Thailand |
36% |
|
Taiwan |
32% |
* 34% reciprocal tariffs are in addition to pre-existing 20% rates
In the case of both the universal and reciprocal tariffs, goods loaded onto vessels before the implementation date will not be subject to the new import taxes.
In addition, Trump signed an EO that ends the de minimis trade exemption for low-value imports from China, effective May 2, 2025. Items valued at or under $800, which were previously exempt, will be subject to an import duty of either 30% of the value of the item or $25 (which will increase to $50 on June 1, 2025).
These new levies are in addition to President Trump’s previously imposed tariffs which include:
- 25% on all Canadian and Mexican goods that are not covered under the U.S.-Mexico-Canada Agreement
- 25% on steel and aluminum
- 25% on vehicles and auto parts
Reciprocal tariffs will not be stacked on top of the existing steel, aluminum and auto import taxes.
An Uncertain Future
A fact sheet issued by the White House indicates the tariffs “will remain in effect until such a time as President Trump determines that the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved, or mitigated.”
Whether Trump intends to leave the tariffs in place long term or use them as leverage to negotiate improved trade deals is currently unknown. However, many major countries have signaled through the media an openness to negotiations since the announcement.
We are assisting clients in understanding the types and magnitudes of tariffs affecting them, how tariffs may impact pricing strategies and how they can best make structural changes in their supply chain based on these changes.
Your Guide Forward
Looking for additional insights? Review How to Protect Your Supply Chain from Potential Tariffs and the playback of our webinar: Impact of Tariffs on Global Trade & Taxation Explained.
As international trade policy continues to evolve, Cherry Bekaert’s Tax Policy, International Tax and Industrial Manufacturing & Consumer Goods teams will continue to bring you the latest updates and insights.
