President Trump Imposes Sweeping Reciprocal Tariffs

On April 2, 2025, President Trump issued an executive order (the “E.O.”) imposing sweeping reciprocal tariffs pursuant to the International Emergency Economic Powers Act, 50 U.S.C. 1701, et seq. (“IEEPA”).[1]

Effective April 5, 2025, all products from all trading partners, unless exempted, will be subject to additional 10% tariffs.  In addition, increased country-specific tariffs, as detailed in Annex I of the E.O. (copied below), will enter into effect on April 9, 2025.

Reciprocal Tariff Rates.  According to the E.O., persistent U.S. trade deficits are a product of “asymmetries in trade relationships,” with many U.S. trading partners imposing asymmetric tariffs and non-tariff barriers (such as regulatory restrictions) on U.S.-origin goods.  To address these asymmetries, the E.O. imposes reciprocal tariffs of either 10%, or a heightened country-specific rate purportedly obtained by calculating a total average tariff rate, coupling both tariffs and non-tariff trade barriers, and then dividing that number in half.  Country-specific figures above 10% are depicted in Annex I.  All trading partners will be subject to at least 10% reciprocal tariffs beginning on April 5.  For countries with a country-specific rate set out in Annex I to the E.O., the increased rates will replace the 10% rate effective April 9. 

For example, effective April 9, reciprocal tariffs will increase (from 10% effective April 5) to 20% on European Union-origin products, 27% on Indian-origin products, 34% on Chinese-origin products, 26% on South Korean-origin products, 24% on Japanese-origin products, and 46% on Vietnamese-origin products.  Products that originate in countries not included in Annex I, including the United Kingdom, Brazil, Colombia, Argentina, Australia, New Zealand, and Chile, will remain subject only to an additional 10% tariff even after April 9.  Goods loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. eastern daylight time on April 5, 2025, and entered for consumption or withdrawn from warehouse for consumption after 12:01 a.m. eastern daylight time on April 5, 2025, will not be subject to the reciprocal tariffs.

Unless exempted or otherwise specified, the reciprocal tariffs apply in addition to general rates of duty and other existing tariffs, such as the duties imposed under Section 301 of the Trade Act of 1974 (“Section 301 Duties”) or Section 232 of the Trade Expansion Act of 1962 (“Section 232 Duties”).  For example, President Trump previously imposed two tranches of additional general tariffs on Chinese-origin products, each of 10%.[2]  Moreover, most Chinese-origin products are subject to Section 301 Duties at rates of between 7.5% and 25%.  The reciprocal tariffs of 34% on Chinese-origin products effective April 9 stacks on those other tariffs, leading to cumulative tariffs on certain Chinese-origin products of 79% in addition to general rates of duty.

Product-Specific Exemptions.  The E.O. contains product-specific exemptions, primarily for products covered by other tariffs, as well as special rules for products of Mexican and Canadian origin.  The E.O.’s product-specific exemptions cover informational materials (as defined in IEEPA), steel and aluminum products subject to Section 232 Duties,[3] automobiles and automotive parts subject to Section 232 Duties, and products listed in Annex II of the E.O., which include various minerals (including copper[4] and zinc), pharmaceuticals, semiconductors, lumber, and energy products.  Additionally, products that “may become subject to” future Section 232 Duties are likewise exempt.

Country-Specific Rules.  For Canada and Mexico, the E.O. provides that prior executive orders issued by President Trump imposing tariffs on products of Canadian and Mexican origin remain in effect, subject to subsequent agreements with both countries to exempt products that qualify for preferential treatment under the U.S.-Mexico-Canada Agreement (“USMCA”).  Products of Canadian and Mexican origin that do not qualify under the USMCA are subject to a 25% tariff, with the exception of Canadian-origin energy products, which are subject to a 10% tariff.  Such products are not subject to the reciprocal tariffs so long as the executive orders imposing tariffs on Canadian- and Mexican-origin products under IEEPA remain in effect.

Products of Hong Kong and Macanese origin are subject to the same reciprocal tariffs as products of Chinese origin.

Lower Tariffs for U.S.-Origin Content.  Reciprocal tariffs apply only to the value of non-U.S.-origin content incorporated into products imported into the United States, provided that at least 20 percent of the value of the product is of U.S. origin.  The E.O. clarifies that “U.S. content” means “the value of an article attributable to the components produced entirely, or substantially transformed in, the United States.”  The E.O. directs U.S. Customs and Border Protection to collect information and documentation on products to verify claimed U.S.-origin content.  Although this could conceptually help importers to avoid some of the duties, in practice, this calculation can be difficult to make.

Modifications.  Modifications to the reciprocal tariff rates set for each country are possible under several scenarios.  If trading partners take “significant steps” to remove tariff and non-tariff barriers to U.S.-origin products, reciprocal tariff rates may be decreased or narrowed in scope.  However, if trading partners retaliate, reciprocal tariff rates may be increased.  The European Union and China have vowed to retaliate, although the scope and nature of that retaliation remains uncertain.  Early reports indicate that China intends to impose a 34% tariff on U.S.-origin products.  Other nations, including Japan, Switzerland, and Singapore, have indicated that they do not plan to impose retaliatory tariffs and will seek to negotiate with the Trump administration. Cleary’s International Trade team is continuing to track developments on the Trump administration’s tariff policy, and is available to provide guidance on navigating the impact of the new reciprocal tariffs.

[1] https://www.whitehouse.gov/presidential-actions/2025/04/regulating-imports-with-a-reciprocal-tariff-to-rectify-trade-practices-that-contribute-to-large-and-persistent-annual-united-states-goods-trade-deficits/

[2] We discussed the previous tranches of tariffs imposed on Chinese-origin products in February and March in two prior blog posts: https://www.clearygottlieb.com/news-and-insights/publication-listing/president-trump-imposes-additional-tariffs-on-china-delays-tariffs-on-canada-and-mexico, and https://www.clearygottlieb.com/news-and-insights/publication-listing/president-trump-imposes-tariffs-on-canada-and-mexico-additional-tariffs-on-china.

[3] We discussed the Section 232 tariffs on aluminum and steel products in our prior blog post: https://www.clearygottlieb.com/news-and-insights/publication-listing/president-trump-re-imposes-and-expands-tariffs-on-steel-and-aluminum. 

[4] Although copper is exempt from the reciprocal tariffs, the U.S. government currently is conducting a Section 232 investigation into copper imports pursuant to a February 25, 2025, Executive Order.  With that in mind, additional tariffs could be imposed on imports of copper into the United States under Section 232 in the future.