U.S. Reciprocal Tariff Rates Effective August 7, 2025: What Importers Need to Know
To Our Valued Partners,
On July 31, 2025, the White House issued a new Executive Order finalizing reciprocal tariff rates for a broad list of countries and goods imported into the United States. These rates become effective August 7, 2025, unless a formal trade agreement, tariff exclusion, or exemption has been published.
🚨 Key Enforcement Details:
🔹 New Tariff Rates: Final country-specific duties are listed in Annex II, which updates the HTSUS to reflect the reciprocal rates.
🔹 European Union Conditional Treatment: Based on the product’s Column 1 duty rate:
If 15% or higher, no additional duty applies
If below 15%, a supplemental duty applies to raise the effective duty to 15% 📄 See EU Fact Sheet
🔹 In-Transit Exception: Shipments exported prior to August 7 and arriving in the U.S. by October 5, 2025 may qualify for previous duty rates, provided appropriate documentation (date of export, proof of shipment) is available.
🔹 Transshipment Crackdown: Importers using third countries to avoid tariffs may face a 40% penalty under 19 U.S.C. §1592, with no mitigation allowed.
🔍 Country-Specific Updates:
Brazil: Starting August 6, 2025, goods that are products of Brazil will be subject to a 40% additional ad valorem duty under HTSUS 9903.01.77, pursuant to the Executive Order “Addressing Threats to the United States by the Government of Brazil.”
📌 Important: This 40% duty does not apply to products already subject to Section 232 duties (e.g., steel, aluminum, copper). However, it does stack with all other applicable duties, including reciprocal tariffs under EO 14257 and any duties for unfair pricing or foreign government subsidies (AD/CVD).
CBP’s official guidance outlines several exemptions, including:
In-transit shipments loaded before August 6 and arriving by October 5 (HTSUS 9903.01.78)
Humanitarian donations, informational materials, and civil aircraft
Certain vehicles, metals, and copper products already covered under other tariff programs
✅ Drawback is available, and special Chapter 98 handling rules apply. CBP has also confirmed that products entering Foreign Trade Zones after August 6 must be admitted under privileged foreign status.
China: A 34% rate remains active until August 12, 2025 unless extended or renegotiated.
Indonesia: A Framework Agreement has been announced. Specific tariff outcomes are still pending. No formal HTS modifications have been published as of August 1, 2025. 🔗 See Joint Statement
Japan: Strategic agreement signed, but full implementation and tariff schedules are still forthcoming. 🔗 See Japan Fact Sheet
United Kingdom: Under the U.S.–U.K. Prosperity Deal, reciprocal tariffs apply, with exclusions for autos and civil aircraft confirmed in both the Executive Order and CBP’s CSMS guidance. 🔗 Executive Order
Additional Duties on Canadian Imports Effective August 1, 2025
Effective August 1, 2025, President Trump amended the original Canada tariff order, raising the 25% duty to 35% under HTSUS 9903.01.10 in response to Canada’s failure to prevent fentanyl trafficking.
🔄 What’s Changing:
New 35% Duty Rate: Most Canadian-origin goods now face a 35% additional ad valorem duty (previously 25%) under HTSUS 9903.01.10.
Transshipped Goods Face 40%: Canadian goods determined by CBP to have been transshipped to evade duties will be subject to a 40% tariff under HTSUS 9903.01.16.
Effective Date: Applies to goods entered or withdrawn for consumption on or after August 1, 2025 at 12:01 AM EDT.
USMCA-Origin Goods Are Exempt: Products that qualify under the United States-Mexico-Canada Agreement (USMCA) remain duty-free.
📊 Key HTS Classifications Impacted:
HTSUS 9903.01.10 – Applies a 35% additional duty on all Canadian-origin products except those classified under 9903.01.11 through 9903.01.15, and goods that qualify for duty-free treatment under USMCA.
HTSUS 9903.01.16 – Applies a 40% additional duty on Canadian-origin goods that CBP determines were transshipped to evade applicable tariffs under the rules of the Executive Order. This is in lieu of the 35% rate under 9903.01.10.
🔎 Transshipment Warning: CBP will enforce enhanced penalties under 19 U.S.C. §1592 for any Canadian goods routed or mislabeled to avoid these increased duties. Importers may face both the 40% tariff and fines, with no option for mitigation.
⚠️ What to Watch For:
Stacking Still Applies: This 35% tariff may be combined with other duties under Section 232, Section 301, and IEEPA, depending on product type.
📦 De Minimis Phase-Out Alert: While the general de minimis exemption ends August 29, 2025, for all countries (including Canada) on shipments under $800 via private couriers, the Canada-specific Executive Order allows transshipped goods under HTSUS 9903.01.16 to temporarily remain eligible. However, this will end once the Secretary of Commerce confirms that collection systems are ready, with no further notice expected. Importers should prepare now.
Chapter 98 Exceptions: Select Chapter 98 provisions still apply. For example, under subheading 9802.00.80, duties apply only to the Canadian value-added portion, not the entire product.
📌 Why It Matters:
This policy update stems from the ongoing national emergency declared under Executive Order 14193. The administration cites both Canada’s lack of enforcement on fentanyl and retaliatory trade actions as justification. CBP reports that fentanyl seizures at the northern border this year already exceed the previous three years combined, highlighting the urgency behind the tariff increase.
🧾 Importers should:
Reevaluate supply chains from Canada
Confirm USMCA qualification status for duty relief
Prepare documentation for potential audits or transshipment reviews
U.S.–Mexico Tariff Extension & Trade Talks Update (as of July 31, 2025)
Following a call between President Trump and Mexico’s President Claudia Sheinbaum, the United States and Mexico have agreed to extend the current tariff framework for another 90 days, with negotiations underway to establish a formal trade agreement during or after this period.
Key Points:
90-Day Tariff Extension Confirmed:
✅ 25% Fentanyl Tariff
✅ 25% Tariff on Automobiles
✅ 50% Tariff on Steel, Aluminum, and Copper
📉 Non-Tariff Barriers Eliminated: Mexico has agreed to immediately terminate all non-tariff trade barriers, a notable shift aimed at improving bilateral trade flow. This includes removing complex customs restrictions, import licensing rules, and other regulatory hurdles that previously limited U.S. market access.
🤝 Border Security & Enforcement Cooperation: Ongoing collaboration will continue on issues related to:
Drug trafficking and distribution
Cartel activity
Illegal immigration enforcement
🗓️ 90-Day Negotiation Window: Both governments have committed to discussions over the next 90 days, with the goal of finalizing a broader trade deal that could include expanded tariff reforms and cross-border enforcement strategies.
📌 At This Time: There is no separate Executive Order or CSMS guidance for Mexico, this agreement was communicated directly by President Trump via public statement on July 31, 2025. We expect formal legal instruments or Federal Register notices to follow if new terms are finalized.
Need a Quote or Guidance?
We are actively monitoring new Executive Orders and USTR updates. We will alert you if any countries shift tiers, or new rates are issued.
