Reciprocal Tariffs: What you need to know for your clients

April 2, 2025. Liberation Day, as President Trump called it. The beginning of "Make America Wealthy Again." Alright, the President signs an executive order on so called reciprocal tariffs and many, many companies and countries all over the world are confused and unsure about what these tariffs are and will do. We spent most of the morning explaining the tariffs, exceptions and rules to businesses in Asia (Vietnam, Cambodia and China) so we wanted to put this blog post together to hopefully give some clarity on the situation and hopefully help everyone get through the next month or so with confidence.

First of all, what are these tariffs? Starting at 12:01AM EDT April 5, 2025 there will be an additional 10% ad valorem tariff on all goods entered in to the US. Then, at 12:01AM EDT April 9, 2025 the contry based reciprocal tariffs which can be seen in Annex I of the Executive Order signed by the President will come into effect. These take the place of the additional 10% from April 5. Any country not specifically listed in Annex I will have the base 10% tariff assigned. But that's not the full story. There are several exceptions and exemptions which must be pointed out and understood:

• For the 10% tariffs, if a vessel was loaded and on it's final transportation to the US (i.e. no more stops) prior to April 5 then the 10% additional tariff will not apply.

• For the reciprocal tariffs, if a vessel was loaded and on it's final transportation to the US (i.e. no more stops) prior to April 9 then the additional reciprocal tariff tariff will not apply.

  • However, if a vessel was loaded after April 5 but before April 9 and is on it's final transportation then the 10% additional tariff will apply rather than reciprocal.

• There are additional exemptions to the tariffs as provided in the executive order:

  • Those items which are covered in the Aluminum and Steel derivatives list will not have extra tariff in addition to the existing 25%.

  • Those items which are covered in the automobile and auto parts tariff will not have an extra tariff in addition to the existing 25%.

  • Those items covered by Annex II of the executive order are not subject to the additional tariff.

  • Any item which has at least 20% American materials (by value or manufacture) will not be subject to any additional tariff

There is a lot of confusion around these tariffs right now, especially in foreign markets. While the order says "All imports" there are quite a few exceptions. Some business will suffer disproportionately, definitely, but there are ways to mitigate losses, especially with the 20% rule. Indeed I was speaking to a company in Cambodia this morning who immediately decided to look into buying American lumber to offset the price of exporting cabinets to the US.

In conclusion, please be careful out there in the next month exporting goods to America. We've already heard stories of customs brokers being confused as well and entering incorrect information/duties on 7501s. Take your time and ask questions. I know in this business time is money, as they say, but taking your time and thinking about a process could save you a lot of money in the long run. As usual, if there are further updates, we'll keep the blog updated.