Publication

February 3, 2025
|
22 minute read
|

Trade & Compliance Resources

In an era marked by global unrest, regulatory complexities, and a shifting market landscape, companies must remain diligent in their trade compliance procedures and stay apprised of changes in the law.

TC Trade Alerts will serve as a central resource for identifying the policy changes, executive orders, and necessary information and context regarding government actions affecting international trade. 

See below for more information on the last TC Trade Alert. If you have any questions about how this affects your business, please don’t hesitate to contact one of our attorneys.

February 14, 2025 | Release of Derivative Steel and Aluminum Annexes

THOMPSON COBURN TRADE ALERT – IMPORTS 
HEADLINE Release of Derivative Steel and Aluminum Annexes
DATE OF ACTION14 February 2025 
AGENCY Trump Administration
EFFECTIVE DATE Removal of country-based exclusions as of March 12, 2025; termination of exclusion process, effective immediately;   Duties on new derivative steel or aluminum articles postponed until “public notification by the Secretary of Commerce, that adequate systems are in place to fully, efficiently, and expediently process and collect tariff revenue on covered articles.”
BACKGROUNDPresident Trump signed Proclamations on February 10 and February 11 removing country-based and product-based exclusions, terminating the exclusion process, increasing the duties on aluminum from 10% to 25% and subjecting additional derivative steel or aluminum articles to the additional duties, as defined in Annex 1.  

On February 14, 2025, the Administration published a Federal Register Notice for public inspection that provides the relevant annexes, attached to this trade alert. This trade alert also highlights additional compliance concerns regarding the Steel and Aluminum Proclamations.
DETAILS The 25% derivative steel and aluminum Annexes were submitted for public inspection on 14 February and are scheduled to be published in the Federal Register on Tuesday 18 February. (The version that is published on Tuesday will be controlling, if there are any differences.)

Steel Annex I – pages 24-26 There are 155 subheadings in Chapter 73 (entire value subject to tariff) and 12 derivative items in CHs 84, 85, and 94. The non-Chapter 73 derivative items will only owe duty on the steel content they contain.
Aluminum Annex I – pages 19-21 There are 18 subheadings in Chapter 76 (entire value subject to tariff) and 104 in chapters 66, 83, 84, 85, 87, 88, 90, 94, 95 or 96. The non-Chapter 76 derivative items will only owe duty on the aluminum content they contain.  

Importers will be expected to provide to U.S. CBP sufficient information to identify the steel or aluminum content used in the manufacture of the derivative articles covered by each Proclamation. An additional Notice will establish a process for the designation of additional derivative steel or aluminum articles.  

In addition to analyzing the effect of the removal of the previous Section 232 exclusions based on country of origin, importers should begin assessing the steel and aluminum content in these derivative headings and the associated supply chains, considering whether U.S.-origin aluminum or steel may be used in the processing. It is also recommended that importers consider their exposure with respect to derivative aluminum or steel articles that are not listed in the appendices to these notices, as duties may be assessed on these products with relatively little warning.
BASIS Proclamations of 10 February; Section 232 of the Trade Expansion Act of 1962; 3 U.S.C. 301; 19 U.S.C. 2483
HTS/ 
PRODUCTS 
A fully searchable spreadsheet based on the Public Inspection Annexes is available here.
COUNTRY All (some exceptions may be negotiated prior to implementation)
CITE Steel Proclamation with Annex I (Public Inspection)
Aluminum Proclamation with Annex I (Public Inspection)

February 13, 2025 | Reciprocal Trade and Tariff Memorandum

THOMPSON COBURN TRADE ALERT – IMPORTS 
HEADLINE Reciprocal Trade and Tariff Memorandum
DATE OF ACTION13 February 2025 
AGENCY Trump Administration;
The Secretaries of the Treasury, Commerce, and Homeland Security;
The Director of the Office of Management and Budget;
The United States Trade Representative (“USTR”);
The Assistant to the President for Economic Policy;
The Senior Counsel to the President for Trade and Manufacturing.
EFFECTIVE DATE Implementation undetermined. Unlikely to be before 1 April 2025.
BACKGROUNDThe Presidential Memorandum of January 20, 2025 (America First Trade Policy Memorandum) outlined the Administration’s opposition to “unfair practices and limited access to foreign markets.” The Reciprocal Trade and Tariff Memorandum (hereafter, the “Memorandum”) seeks to address the “lack of reciprocity” in tariff rates that the Administration says contributes to these issues and the annual trade deficit.
DETAILS The Memorandum does not implement reciprocal tariffs; rather, it is a policy statement and instruction for various agencies to investigate and report on “non-reciprocal” trade measures other countries employ towards the United States. These reports, which do not have a specific due date (other than a fiscal impact assessment from the Office of Management and Budget, which is due Tuesday, August 12), are not expected for months and will assumably propose remedies for tariff implementation.

The Memorandum introduces the “Fair and Reciprocal Plan” to counter non-reciprocal trading arrangements by “determining the equivalent of a reciprocal tariff with respect to each foreign trading partner.” To this end, the Secretary of Commerce and USTR are instructed to investigate “non-reciprocal trade arrangements” after agency reports are due (1 April 2025) and submit a report detailing proposed remedies.

The Memorandum includes within the scope of non-reciprocal trading arrangements “unfair, discriminatory, or extraterritorial tases, . . . include value-added tax.” The Memorandum leaves considerable questions unanswered, including the full scope of the measures and their basis in statutory authority; the timing of the investigations, reports, and tariff actions; and the practical manner in which the implementation will occur. Delayed timing leaves opportunities for nations to negotiate, but companies should take steps now to analyze potential exposure and mitigate risk of sudden price increases.
BASIS None provided
HTS/ 
PRODUCTS 
To be determined
COUNTRY To be determined
CITE Reciprocal Trade and Tariffs – The White House
Fact Sheet: President Donald J. Trump Announces “Fair and Reciprocal Plan” on Trade – The White House

Policy Specifics

Section 2 of the Memorandum states that the policy of the United States is to reduce its annual trade deficit and address “other unfair and unbalanced aspects of our trade with foreign trading partners.” To this end, the “Fair and Reciprocal Plan”  aims to determine “the equivalent of a reciprocal tariff with respect to each foreign trading partner.” The plan considers the following to be “non-reciprocal” aspects of a trade relationship:

(a)  tariffs imposed on U.S. products; 
(b)  unfair, discriminatory, or extraterritorial taxes imposed by U.S. trading partners on United States businesses, workers, and consumers, including a value-added tax; 
(c)  costs to U.S. businesses, workers, and consumers arising from nontariff barriers or measures and unfair or harmful acts, policies, or practices, including subsidies, and burdensome regulatory requirements on U.S. businesses operating in other countries; 
(d)  policies and practices that cause exchange rates to deviate from their market value, to the detriment of Americans; wage suppression; and other mercantilist policies that make U.S. businesses and workers less competitive; and  
(e)  any other practice that . . . imposes any unfair limitation on market access or any structural impediment to fair competition with the market economy of the United States. 

Section 3 instructs the Secretary of Commerce and USTR to investigate “the harm to the U.S. from any non-reciprocal trade arrangements adopted by any trading partners” after agency reports under the America First Trade Policy Memorandum are due (i.e., 1 April 2025). After their investigations, they will submit a report “detailing proposed remedies in pursuit of reciprocal trade relations with each trading partner.”

Additionally, the Memorandum instructs the Director of the Office of Management and Budget to “assess all fiscal impacts on the Federal Government and the impacts of any information collection requests on the public,” and to provide a written assessment to the President by 12 August 2025.

Unanswered Questions

The Memorandum leaves considerable questions unanswered.

  • Scope and authority questions. What is the full array of trade measures that will be considered for implementation? What authorities will be used to implement any response measures? Do these authorities require additional investigations or reports? Will the President need new authority from Congress to implement any measures, or with the implementation of reciprocal tariffs require an act of Congress?
  • Timing questions. How long will the Secretary of Commerce and USTR need to complete their investigations after the agency reports are submitted on April 1? Weeks? Months? Years? How long after these investigations are complete will implementation take? Does the OMB fiscal impact assessment due 12 August mean that implementation cannot occur before this date?
  • Implementation questions. What HTS heading or subheading level (i.e., 6-digit, 8-digit, etc.), which comprises tens of thousands of individual classifications and rates, will be the basis for the reciprocal analysis or tariff implementation? Will the reciprocal rates be made unique for each country against which action is taken? Will the U.S. rates adjust if the foreign rates adjusts (up or down)? What are the “collection requests on the public” that are mentioned, and will there be a process to challenge these comments or request exemptions?

What To Do Now

Delayed timing could leave opportunities for nations to negotiate and reduce the impact of these measures, but the bottom line is it is currently unclear how and when these tariffs will be implemented, limiting the ability of industry to adapt. A self-assessment of exposure by country and tariff classification using all available data (i.e., ACE data, internal sales data, etc.) and access to non-U.S. tariff schedules to begin to measure the possible impact of the Reciprocal Trade and Tariff Memorandum. Additional measures include:

  • Set up news alerts specific to your merchandise or countries of interest.
  • Don’t make decisions too quickly…some of this is likely a negotiation tactic and political theater, similar to the 25% tariffs on Mexico and Canada which were postponed.
  • Negotiate appropriate contractual and sales terms to mitigate the impact of sudden and significant costs associated with tariff implementation.

February 10, 2025 | Pause On Certain FCPA Enforcement Actions

THOMPSON COBURN TRADE ALERT – EXPORTS
HEADLINE Pause On Certain FCPA Enforcement Actions
DATE 10 February 2025 
AGENCY Department of Justice
EFFECTIVE DATE 10 February 2025 through 9 August 2025 (180 days) or as extended by the Attorney General
BACKGROUNDThe Foreign Corrupt Practices Act of 1977 (“FCPA”) as amended in 1998 prohibits American companies and individuals from offering or paying “anything of value” to foreign government officials in order to gain or maintain business and requires publicly traded companies to maintain accurate books and records and robust internal accounting controls to prevent such practices.  

President Trump believes that U.S. companies are disadvantaged by excessive FCPA enforcement, which prevents them from engaging in practices common among global competitors, resulting in an uneven playing field. A White House official reported to CNBC that there will be “a pause in enforcement to better assess how to streamline the FCPA, ensuring it aligns with economic interests and national security.”
DETAILS President Trump’s Executive Order directs Attorney General Pam Bondi to pause FCPA investigations or enforcement actions until new enforcement guidelines are issued, unless an “individual exception” is warranted.  

The Attorney General will:
(i) halt new FCPA investigations and actions, unless an exception is necessary;
(ii) review existing investigations and ensure FCPA enforcement stays within proper limits, while protecting the President’s foreign policy powers; and
(iii) issue updated guidelines that prioritize American interests, economic competitiveness, and efficient use of federal resources.  

The review may be extended for another 180 days. Any FCPA actions taken after the new guidelines are issued will follow those guidelines and require the Attorney General’s approval. After the updated guidelines are issued, the Attorney General will determine if further actions, including correcting past FCPA issues, are needed and may recommend actions to the President.  

The Attorney General’s February 5, 2025, memorandum, Total Elimination of Cartels and Transnational Criminal Organizations,” states that the FCPA Unit will focus on foreign bribery tied to Cartels and Transnational Criminal Organizations (TCOs), and reduce unrelated investigations.  

The FCPA is still in force, and its anti-bribery and accounting provisions have not been suspended or revoked.

Duties Do Not Apply to Derivative Steel (Aluminum) Articles processed in another country from steel (or aluminum) articles that were melted (smelted) and poured (cast) in the United States. It is not yet clear how this clause will be interpreted with respect to Chapter 98 HTSUS classifications, and how it will be implemented for any situations where Chapter 98 may not be used.
BASIS Executive Order
CITE Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security – The White House Total Elimination of Cartels and Transnational Criminal Organizations

February 10, 2025 | Executive Order Imposing Additional Duties on Aluminum Products

THOMPSON COBURN TRADE ALERT – IMPORTS 
HEADLINE Executive Order Imposing Additional Duties on Aluminum Products
DATE 10 February 2025 
AGENCY Department of Homeland Security, Customs and Border Protection (CBP); Trump Administration
EFFECTIVE DATE For changes to prior aluminum proclamations: 12 March 2025  12:01 AM EST For additional changes: effective upon public notice by the Sec. Commerce.
BACKGROUNDPresident Trump signed an executive order on February 10 imposing new 25% tariffs on aluminum and certain downstream aluminum products. In his previous administration, President Trump used Section 232 to impose 10% tariffs on a narrower subset of aluminum articles, respectively, and several agreements were reached with several allied countries. However, these new actions (1) raise the tariff amount from 10% to 25%, (2) terminate the previous exceptions, and (3) supplement the previous aluminum tariff scope.
DETAILS The actions will:
— Remove previous Section 232 aluminum tariff exemption agreements for products of Argentina, Australia, Canada, Mexico, the European Union, and the United Kingdom, subjecting originating aluminum products in scope to the 25% duties.
— Wind down individual product exclusions and the product exclusion process authorized by Proclamation 9704, Proclamation 9776, and Proclamation 9980. The granted product exclusions remain effective until they expire or reach the applicable imported product volume, whichever occurs first.
— Expand tariffs to include additional derivative aluminum articles specified in Annex I (which was not published with the order), at a time to be specified later by publication in the Federal Register.  

The duties imposed by the E.O. are not available for duty drawback.  

Additional duties on derivative aluminum articles do not apply to such articles processed in another country from aluminum articles that were smelted and cast in the United States. Importers must document any information necessary to identify the aluminum content used in the manufacture of aluminum derivative articles imports.

Duties Do Not Apply to Derivative Steel (Aluminum) Articles processed in another country from steel (or aluminum) articles that were melted (smelted) and poured (cast) in the United States. It is not yet clear how this clause will be interpreted with respect to Chapter 98 HTSUS classifications, and how it will be implemented for any situations where Chapter 98 may not be used.
BASIS Section 232 of the of the Trade Expansion Act of 1962; 3 U.S.C. 301; 19 U.S.C. 2483
HTS/ 
PRODUCTS 
The aluminum and derivative aluminum products subject to the additional tariffs in Proclamation 9704 and Proclamation 9980. Additional derivative aluminum products in Annex I (not yet published)
COUNTRY All
CITE Adjusting Imports of Aluminum into The United States – The White House

Modification of Existing Section 232 Aluminum Tariffs

The actions cancel the following allowances for specific countries:

As a result, after 12:01 a.m. Eastern time on March 12, 2025, all imports of aluminum articles and derivative aluminum articles from these countries will become subject to the additional tariffs proclaimed in Proclamation 9705 and Proclamation 9980 at a rate of 25%, except for derivative aluminum articles processed in another country from aluminum articles that were smelted and cast in the United States.

Effective “immediately,” no more product exclusions may be considered or renewed, with previously granted product exclusions remaining in effect until they expire or until the applicable excluded product volume is imported, whichever occurs first.

The action also revokes the ability of the Secretary of Commerce to grant relief from the duties or quantitative restrictions, including the provisions of clause 3 of Proclamation 9704, clause 1 of Proclamation 9776, or clause 2 of Proclamation 9980.

Inclusion of Additional Aluminum Articles

The actions will apply an additional 25% tariff to all imports of derivative aluminum articles specified in Annex I (which was not published with the order).

  • These products (yet to be identified) will be subject to the increased tariff as of the date that the Secretary of Commerce publishes a notification in the Federal Register.
  • These additional duties do not apply to derivative aluminum articles processed in another country from aluminum articles that were smelted and cast in the United States.
  • To the extent derivative aluminum articles identified in Annex I (not published) that are not in Chapter 76 of the HTSUS, the additional duties apply only to the aluminum content of the derivative article.

Importers must provide to U.S. Customs and Border Patrol (CBP) “any information necessary to identify the aluminum content used in the manufacture of aluminum derivative articles imports.”

Process for Including Additional Derivative Aluminum Articles within Scope

The order directs the Secretary of Commerce to establish a process for including additional derivative aluminum articles within the scope of the proclamation within 90 days. This process will involve a mechanism for domestic producers of an aluminum article or derivative aluminum article, or an industry association representing one or more such producers, to where the request additional products be included if such products “impair the national security or otherwise undermine the objectives” of the actions. The Secretary will have 60 days to issue a determination regarding whether to add the products to the scope.

Prioritization of Classification Reviews

The order also directs CBP to “prioritize reviews of the classification of imported aluminum articles and derivative aluminum articles” and to punish misclassification to “the maximum amount permitted by law and shall not consider any evidence of mitigating factors in its determination.”

CBP is further instructed to notify the Secretary of Commerce regarding “evidence of any efforts to evade payment of the … duties … through processing or alteration of aluminum articles or derivative aluminum articles prior to importation,” and such processed or altered aluminum articles shall be considered to be derivative aluminum articles. It is not entirely clear from the order, however, if this Commerce department “consideration” will be made ad hoc as applied to an individual importer or if it will inform additional actions by the Secretary via the process for including additional derivative aluminum articles to be published in the Federal Register.

Miscellaneous

Aluminum or derivative articles admitted to U.S. foreign trade zones on or after March 12 not eligible for domestic status will be entered under “privileged foreign status” subject upon entry for consumption to any added duties, as applicable.

Derivative aluminum or steel articles that are in a foreign trade zone in privileged status prior to the March 12, 2025 and withdrawn for consumption after March 12, 2025 will be subject to the rates of duties applicable under this proclamation.

Finally, the duties imposed by the E.O. are not available for duty drawback.

February 10, 2025 | Executive Order Imposing Additional Duties on Steel Products

THOMPSON COBURN TRADE ALERT – IMPORTS 
HEADLINE Executive Order Imposing Additional Duties on Steel Products
DATE 10 February 2025 
AGENCY Department of Homeland Security, Customs and Border Protection (CBP); Trump Administration
EFFECTIVE DATE For changes to prior steel proclamations: 12 March 2025  12:01 AM EST   For additional changes: effective upon public notice by the Sec. Commerce.
BACKGROUNDPresident Trump signed an executive order February 10 imposing new 25% tariffs on steel and certain downstream steel products. In his previous administration, President Trump used Section 232 to impose 25% tariffs on a narrower subset of steel articles, respectively, and several agreements were reached with several allied countries. However, these new actions terminate these exceptions and supplement the previous steel tariff measures.
DETAILS The actions will:  

— Remove previous Section 232 steel tariff exemption agreements for products of Argentina, Australia, Brazil, Canada, Japan, Mexico, South Korea, the European Union, Ukraine, and the United Kingdom, subjecting originating steel products in scope to the 25% duties.
— Wind down individual product exclusions and the product exclusion process authorized by Proclamation 9705, Proclamation 9777, and Proclamation 9980. The granted product exclusions remain effective until they expire or reach the applicable imported product volume, whichever occurs first.
— Expand tariffs to include additional derivative steel articles specified in Annex I (which was not published with the order), at a time to be specified later by publication in the Federal Register.  

The duties imposed by the E.O. are not available for duty drawback.  

Additional duties on derivative steel articles do not apply to such articles processed in another country from steel articles that were melted and poured in the United States. Importers must document any information necessary to identify the steel content used in the manufacture of steel derivative articles imports.

Duties Do Not Apply to Derivative Steel (Aluminum) Articles processed in another country from steel (or aluminum) articles that were melted (smelted) and poured (cast) in the United States. It is not yet clear how this clause will be interpreted with respect to Chapter 98 HTSUS classifications, and how it will be implemented for any situations where Chapter 98 may not be used.
BASIS Section 232 of the of the Trade Expansion Act of 1962; 3 U.S.C. 301; 19 U.S.C. 2483
HTS/ 
PRODUCTS 
The steel and derivative steel products subject to the additional tariffs in Proclamation 9705 and Proclamation 9980.  Additional derivative steel products in Annex I (not yet published)
COUNTRY All
CITE Adjusting Imports of Steel into The United States – The White House

Modification of Existing Section 232 Steel Tariffs

The actions cancel the following allowances for specific countries:

As a result, after 12:01 a.m. Eastern time on March 12, 2025, all imports of steel articles and derivative steel articles from these countries will become subject to the additional tariffs proclaimed in Proclamation 9705 and Proclamation 9980 except for derivative steel articles processed in another country from steel articles that were melted and poured in the United States.

Effective “immediately,” no more product exclusions may be considered or renewed, with previously granted product exclusions remaining in effect until they expire or until the applicable excluded product volume is imported, whichever occurs first.

The action also revokes the ability of the Secretary of Commerce to grant relief from the duties or quantitative restrictions, including the provisions of clause 3 of Proclamation 9705, clause 1 of Proclamation 9777, and clause 2 of Proclamation 9980.

Inclusion of Additional Steel Articles

The actions will apply an additional 25% tariff to all imports of derivative steel articles specified in Annex I (which was not published with the order).

  • These products (yet to be identified) will be subject to the increased tariff as of the date that the Secretary of Commerce publishes a notification in the Federal Register.
  • These additional duties do not apply to derivative steel articles processed in another country from steel articles that were melted and poured in the United States.
  • To the extent derivative steel articles identified in Annex I (not published) are not in Chapter 73 of the HTSUS, the additional duties apply only to the steel content of the derivative steel article.

Importers must provide to U.S. Customs and Border Patrol (CBP) “any information necessary to identify the steel content used in the manufacture of steel derivative articles imports.”

Process for Including Additional Derivative Steel Articles within Scope

The order directs the Secretary of Commerce to establish a process for including additional derivative steel articles within the scope of the proclamation within 90 days. This process will involve a mechanism for domestic producers of a steel article or derivative steel article, or an industry association representing one or more such producers, to request that additional derivative products be included if such products “impair the national security or otherwise undermine the objectives” of the actions. The Secretary will have 60 days to issue a determination regarding whether to add the products to the scope.

Prioritization of Classification Reviews

The order also directs CBP to “prioritize reviews of the classification of imported steel articles and derivative steel articles” and to punish misclassification to “the maximum amount permitted by law and shall not consider any evidence of mitigating factors in its determination.”

CBP is further instructed to notify the Secretary of Commerce regarding “evidence of any efforts to evade payment of the … duties … through processing or alteration of steel articles or derivative steel articles prior to importation,” and such processed or altered steel articles shall be considered to be derivative steel articles. It is not entirely clear from the order, however, if this Commerce department “consideration” will be made ad hoc as applied to an individual importer or if it will inform additional actions by the Secretary via the process for including additional derivative steel articles to be published in the Federal Register.

Miscellaneous

Steel or derivative articles admitted to U.S. foreign trade zones on or after March 12 that are not eligible for domestic status will be entered under “privileged foreign status” and are subject upon entry for consumption to any added duties, as applicable.

Derivative aluminum or steel articles that are in a foreign trade zone in privileged status prior to the March 12, 2025 and withdrawn for consumption after March 12, 2025 will be subject to the rates of duties applicable under this proclamation.

Finally, the duties imposed by the E.O. are not available for duty drawback.

February 4, 2025 | China Imposes Retaliatory Tariffs & Export Controls

THOMPSON COBURN TRADE ALERT – EXPORTS
HEADLINEChina Imposes Retaliatory Tariffs & Export Controls
DATE4 February 2025  12:30PM EST
AGENCYChina – Ministry of Finance
STATUSSigned
EFFECTIVE DATE10 February 2025
BACKGROUNDChina responded to President Trump’s February 1 Executive Order imposing an additional 10% duties on all goods from China with retaliatory tariffs, export controls.  
DETAILSChina announced retaliatory tariffs against the U.S., including a 15% tariff on coal and liquified natural gas imports, anda 10% tariff on crude oil, agricultural machinery, pickup trucks, and large-engine cars.   China also unveiled new export controls on 25 rare metals and chemicals including tungsten, tellurium, bismuth, and molybdenum, which are used in a range of industrial & aerospace appliances.

China filed a complaint with the WTO’s dispute settlement mechanism against the U.S. decision to impose additional tariffs on goods from China, and is undertaking investigations of certain U.S. companies, although the government did not directly relate these investigations to the tariff actions by the United States.
BASISN/A
HTS/
PRODUCTS
15% – coal and liquified natural gas, as specified in Annex 110% – crude oil, agricultural machinery, large-displacement vehicles, pickup trucks, as specified in Annex 2
COUNTRYChina, U.S.
CITEReuters – China launches limited tariffs after Trump imposes sweeping new levies | Reuters BBC – Five ways China is hitting back against US tariffs Le Monde – China retaliates against US tariffs with tariffs, probes, WTO complaint   Chinese Announcements/Notices – Announcement of the Customs Tariff Commission of the State Council on Imposing Additional Tariffs on Certain Imported Goods Originating in the United States PRC Ministry of Commerce – Announcement No. 10 of 2025 of the General Administration of Customs of the Ministry of Commerce

February 3, 2025 | U.S. Customs and Border Protection Implement Additional Duties on Products of the People’s Republic of China; U.S. and Canada/Mexico Agree to One-Month Pause on Tariffs

THOMPSON COBURN TRADE ALERT – IMPORTS
HEADLINE U.S. Customs and Border Protection Implement Additional Duties on Products of the People’s Republic of China; U.S. and Canada/Mexico Agree to One-Month Pause on Tariffs
DATE February 3, 2025, 5:30 PM EST
AGENCY Department of Homeland Security, Customs and Border Protection (CBP); Trump Administration
STATUS China – Duties to be imposed on goods entered or withdrawn from warehouse on February 4, 2025, unless one proves that the goods were shipped prior to February 1, 2025. 2025-02293.pdf
Canada – Suspended for 30 Days – No official notice, yet.
Mexico – Suspended for 30 Days – Progress on the Situation At Our Southern Border – The White House
EFFECTIVE DATE China – February 3, 2025, 12:01 a.m. Eastern Time
Canada, Mexico – March 3, 2025 (tentative)
BACKGROUNDOn February 1, 2025, President Trump issued three Executive Orders requiring the imposition of 10% duties on all goods from China, 10% duties on Canadian petroleum products, and 25% duties on all other goods from Canada and all goods from Mexico.

On February 3, 2025, Mexico negotiated an extension with President Trump, DHS posted Federal Register Notices regarding the new tariffs on goods from China and Canada, and Canada negotiated an extension with President Trump.
DETAILS China
 
CBP published modifications to the Harmonized Tariff Schedule of the U.S. (HTSUS) duties to implement the increased duties on products of Chinese origin. In addition to reiterating requirements of the Executive Orders implementing the tariffs, the notices clarify that:
— goods entered or withdrawn for consumption, after 12:01 a.m. Eastern Standard Time on February 4, 2025, that were loaded or in transit on the final mode of transport prior to entry into the United States before 12:01 a.m. Eastern Standard Time on February 1, 2025, are not subject to additional duties if the importer certifies declares new HTSUS heading 9903.01.23 (China) as described in the annex;
— the additional duties apply to the value of Chinese processing of materials imported pursuant to 9802.00.40, 9802.00.50, 9802.00.60, and the value of the assembled article for 9802.00.80, but otherwise do not apply to goods entered pursuant to a provision of Chapter 98 HTSUS;
 
Canada and Mexico
— Trump and the leaders of Canada and Mexico announced on social media an agreement to a “one-month” pause on implementation of the February 1 duties imposed on their respective nations.
— CBP issued its proposed modifications to the HTS implementing tariffs on goods from Canada prior to the delay – 2025-02291.pdf. This will likely be rescinded.
BASIS 1 February 2025 Executive orders and authorities incorporated by reference.
HTS/ 
PRODUCTS 
China
— Subheading 9903.01.20 will apply an additional 10% tariff to goods of Chinese or Hong Kong origin as defined in the Annex.
COUNTRY Canada, China, Mexico
CITE China – Federal Register Notice.
Canada – Federal Register Notice (likely to be rescinded). Official notice of extension was not available at the time of this publication.
Mexico – Progress on the Situation At Our Southern Border – The White House

February 1, 2025 | Trump imposes additional 10% tariffs on all products originating in China and 25% tariffs on all products originating in Mexico and Canada (with a lower 10% on Canadian “energy products”)

THOMPSON COBURN TRADE ALERT – IMPORTS
HEADLINE Trump imposes additional 10% tariffs on all products originating in China and 25% tariffs on all products originating in Mexico and Canada (with a lower 10% on Canadian “energy products”)
DATE February 1, 2025
AGENCY Presidential Action
STATUS Canada – Executive Order Imposing Duties to Address the Flow of Illicit Drugs Across our Northern Border
Mexico – Executive Order – Imposing Duties to Address the Situation at Our Southern Border
China – Executive Order – Imposing Duties to Address the Synthetic Opioid Supply Chain in the People’s Republic of China
EFFECTIVE DATE 12:01 a.m. Eastern Time, February 4, 2025
DETAILS President Trump issued three executive orders imposing:
1. Additional 25% tariffs on all products of Mexico
2. Additional 25% tariffs on all products of Canada, except “energy products” from Canada, which will have a 10% tariff
3. Additional 10% tariff on all products of Chinese products.

The duties imposed by the E.O. are not available for duty drawback.
The E.O. also prohibits the use of Section 321 for the “products of” Mexico, Canada, and China, as that term will be defined in the Federal Register Notice.
The tariffs imposed by the E.O. are in addition to ordinary duties and any other tariff programs (e.g., Section 301 China tariffs, ADD/CVD, Section 232) that may apply.
No exclusion process was provided for in the executive actions. A retaliation clause threatens additional tariffs if a country imposes tariffs on U.S. goods.
BASIS International Emergency Economic Powers Act (IEEPA), 50 U.S. Code § 1701 et seq. citing a declaration of national emergency in response to the “extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl”; the National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA); section 604 of the Trade Act of 1974, as amended (19 U.S.C. 2483); and section 301 of title 3, United States Code. 
HTS/ 
PRODUCTS 
Nearly all. All products of Mexico and Canada “as defined by the Federal Register” will be subject to a 25%, except “energy products” from Canada, which will have a 10% tariff. Chinese products will be subject to an additional 10% tariff. The Federal Register notice that defines the products has yet to be published.
COUNTRY Mexico, Canada, and China
CITE https://www.whitehouse.gov/presidential-actions/

Summary

President Trump issued three executive orders that “impose, consistent with law, ad valorem tariffs on articles that are products of” 25% on products of Mexico, 25% on products Canada (except energy products, which are at a lower 10% rate), and an additional 10% on products of China as set forth in each order, under IEEPA and other authorities. These duties are effective Tuesday, February 4, 2025. There is no drawback or duty-free de minimis relief available for these duties, and they will apply on top of other applicable programs.

Products Affected

The executive orders cover “all articles” that are the product of Mexico, Canada, and China, “as defined by the Federal Register notice.” The Secretary of Homeland Security is tasked with determining and publishing “the modifications necessary to the Harmonized Tariff Schedule of the United States (HTSUS) in order to effectuate this order consistent with law.” This notice has not been published yet. While it is anticipated that these E.O.s will cover all products from each nation, with the exception of Canadian energy products, there are significant questions to be resolved. For example, if a Chinese item was excluded from the Section 301 tariffs, will it be subject to the tariffs under the February 1 E.O.? Similarly, does the E.O. apply equally to goods that originate in Canada or Mexico under the United States-Mexico-Canada Agreement (USMCA) as it does to goods that are substantially transformed in Canada or Mexico, but do not qualify as originating under USMCA?

Canadian “energy or energy resources,” which are subject to a 10% tariff instead of the 25% tariff applicable to other Canadian products, are defined by reference to section 8 of the president’s order on January 20, 2025, Declaring a National Energy Emergency to include “crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals, as defined by 30 U.S.C. 1606 (a)(3).”

Application in Relation to Other Duties

The rates of duty established in each order are defined to be in addition to any other duties, fees, exactions, or charges applicable to such imported articles.

No drawback program relief (19 CFR parts 190, 191) is available with respect to the duties imposed pursuant to these orders.

Duty-free de minimis treatment under 19 U.S.C. 1321 is not available for the articles affected by the tariff action.

For foreign trade zone products subject to each order, articles that are products of Canada, other than “domestic status” eligible products defined in 19 CFR 146.43, entered after the effective date must be admitted as “privileged foreign status” as defined in 19 CFR 146.41, and upon entry for consumption will be subject to the increased duties in effect at the time of admittance into the foreign trade zone.

There is no indication as to whether goods that are entered pursuant to one of the provisions of Chapter 98 of the HTSUS would be exempt from these duties.

Retaliation Clause

Each order contains a retaliation clause reserving the right to “increase or expand in scope” the tariffs imposed by each E.O., should the country retaliate by imposing additional tariffs on U.S. goods. Canada and Mexico have already announced tariff retaliations are planned, with Canada specifying 25% additional duties would be imposed on C$30 billion of U.S goods as of February 4, and an additional C$125 billion in goods in three weeks, according to Prime Minister Justin Trudeau’s announcement February 1. He stated the list of products would include “American beer, wine and bourbon, fruits and fruit juices, including orange juice, along with vegetables, perfume, clothing and shoes … major consumer products like household appliances, furniture and sports equipment, and materials like lumber and plastics, along with much, much more” as well as some “non-tariff measures” related to critical minerals, energy procurement, and other unspecified partnerships. See Transcript of Trudeau’s response to U.S. tariffs on Canada, Global News, Posted February 1, 2025, 10:21 pm, available at https://globalnews.ca/news/10993376/trudeau-trump-tariffs-us-canaaada/.

Products Excluded and/or Exclusion Process

No product exclusions or exclusion process were announced.

Removal of Duties

The Secretary of Homeland Security is charged with consulting with several other cabinet secretaries and the attorney general regarding the emergency situation and is required to “inform the President of any circumstances that, in the opinion of the Secretary of Homeland Security,” indicate the government of the tariffed country has taken “adequate steps” to alleviate the emergency that gave rise to the order. If the president determines sufficient action to stem the crisis has occurred, the tariffs will be removed. What constitutes “adequate steps” to justify removal is not defined.

Related People