Taggart is committed to providing our customers with the most detailed and timely updates possible, but this remains a very fluid situation. The below summary is our best interpretation as of this time, but we recommend reviewing the presidential actions and fact sheets in detail to have the clearest understanding of how these changes may impact your business.
Imports From China
- Effective March 4, 2025, the IEEPA Tariff will be adjusted to 20% (unless there is an unexpected last minute change).
- This adjustment includes the 10% IEEPA that became effective on February 4, 2025, and an additional 10% to be implemented on March 4, 2025 (unless there is an unexpected last minute change).
- The 20% tariff will be cumulative with the normal tariff rate, any existing Section 301 duties, and applicable antidumping/countervailing duties (ADD/CVD).
- For instance, a product with a chapter tariff rate of 5.8% that incurs 25% Section 301 duties and 90% ADD/CVD would be subject to a total duty of 140.8% (5.8 + 25 + 90 + 20).
- Currently, no exclusions are available.
Imports From Canada & Mexico
- A 25% tariff will apply to all imports from Canada, except for energy imports, which will incur a 10% tariff, effective March 4, 2025 (unless there is an unexpected last minute change).
- A 25% tariff will also be imposed on all imports from Mexico, effective March 4, 2025 (unless there is an unexpected last minute change).
- These additional tariffs will take precedence over any existing free trade agreements, including the USMCA.
Steel and Aluminum Imports
- Expected beginning March 12, 2025, a 25% tariff will be applied to all imports of steel and derivative steel products from any country.
- A similar 25% tariff will be imposed on all imports of aluminum and derivative aluminum products, expected to be effective March 12, 2025.
- At this time, no new exclusions are being considered.
Important Announcements to Note
- The possibility of reciprocal tariffs may be enacted as early as April 2, 2025. The U.S. Trade Representative (USTR) is currently soliciting public comments to help identify and evaluate unfair trade practices of other countries. The commentary period will remain open until March 11, 2025, and submissions can be made here.
- An executive order issued on February 25, 2025, has initiated an investigation into all forms of copper imports and their implications for national security. This investigation is expected to be concluded within 270 days; however, it may wrap up sooner, with recommendations for potential actions or adjustments to duties anticipated in the near term.
- The USTR has finalized an investigation, initiated in 2024, into China’s state-funded shipbuilding sector, which has gained an unfair advantage in the global maritime industry, adversely affecting U.S. economic interests. The proposed recommendations, which aim to restrict the usage of Chinese-built ships on U.S. trade routes through fee implementations, include:
- Carriers with at least 50% of their fleet constructed in China will incur maximum fees of $1 million per port call.
- Carriers with 25%-49% of their fleet built in China would be liable for fees of up to $750,000 per call.
- Carriers with less than 25% of their fleet built in China would still face fees of up to $500,000 per port visit.
- Furthermore, the USTR is recommending additional penalties for shipping lines with significant future orders from Chinese shipyards, where companies expecting 50% or more of their upcoming vessel deliveries from these yards could incur extra charges of $500,000 to $1 million per call for those vessels.
- The implications of these recommendations are substantial, particularly considering that numerous major global shipping lines operate Chinese-built vessels. Should these recommendations be enacted, these shipping lines may be compelled to absorb new fees, although it is more likely that they will transfer these costs to their customers through increased shipping charges.
- For context, if a vessel built in China is loaded with 14,000 TEU, the anticipated rise in costs could be approximately $107 per TEU.
Taggart’s goal is to be a valuable resource for your business. We are here to assist you with any needs or questions you may have. Please do not hesitate to contact your sales representative or customs brokerage representative for any concerns or support you require.
