Removing the Stack in the Tariff Stack

There was an executive order by the president on April 29 that analyzed stacks in tariffs that could occur in certain situations with certain products. Unless those products happen to come from China, but more on that below. There are so many tariffs to keep straight now, with 232 on Auto parts, 232 on aluminum and steel, 301 on many Chinese goods (301 port fees are still in the proposal stage so they don't count... see our blog post!), reciprocal tariffs and IEEPA fentanyl tariffs, it's a lot to keep straight.

There is now some guidance about products that can have multiple tariffs. I won't really call it a pyramid, it's kind of a stick, really. Anyway, the current guidance from the executive order is puts the tariff consideration in the following order:

1) Section 232 Auto Tariffs

2) Canada and Mexico IEEPA fentanyl tariffs

3) Section 232 Aluminum and Steel tariffs

I have grouped together like articles since you will not have a singular product which is both a product of Canada and Mexico. It's the same tariff anyway, likewise there really is no great distinction between aluminum and steel so it just seems confusing for the order to list everything out that way, even though it is supposed to be written in the vein of a legal document. Also, please notice above that there is no mention of the Chinese IEEPA. That still stacks to if you're importing from China, you've still got to add the 20% to everything you import.

So what is the removal of stacking in tariffs? The idea is that if a product comes from in to the US and can be classified under the Section 232 Auto Tariffs, it cannot also have IEEPA (except China IEEPA) or Aluminum and Steel tariff applied as well. If an item comes into the US which is not an auto part but qualifies as part of the IEEPA for Canada or Mexico (remember, that's any non-USMCA item), it cannot also have Section 232 Aluminum and Steel tariffs applied. The idea is to only have 1 of the 25% tariffs listed applying to any one item. The only exception, as mentioned before, is China IEEPA, which is always active.