I’d like to write about anything but tariffs, but I don’t see how to avoid it. The first quarter of 2025 has seen unprecedented activity in tariff actions. New tariffs, changes, and revisions have been issued at a dizzying pace, leaving brokers and importers scrambling to stay ahead or simply to catch up. For importers, forecasting purchases and pricing requirements has been virtually impossible. As Customs brokers, we are spending an unprecedented amount of time keeping our staff up to date on processes and procedures necessary to file compliant entries. Add to this the need to keep our clients and agents informed so they can try to make the best decisions, and time is becoming a scarce commodity. It does not help that this comes on top of a major expansion of the products that require a Lacey Act filing.
Internal training, an area that has been a focus at CVI, has tilted to filling an immediate need for quickly developing tariff reporting procedures for the entries we file. We still follow a plan for in-depth monthly training sessions to provide our people with the best tools for the work at hand. But we are having to implement impromptu sessions as new tariff actions are announced or revised. With tariff actions being implemented with scant notice, our people have to adapt quickly to new requirements. As with the Lacey Act expansion, the additional tariff actions are creating extra work and more attention to detail when filing an entry. Over the first quarter, some entry lines have gone from requiring one HTS code to two, three, or even four additional provisional HTS codes. It is an effort unlike that of any other time in this industry.
Below is a brief review of new tariff actions we have faced since the beginning of the year.
- IEEPA/Fentanyl tariffs on China and Hong Kong at 20% effective March 4.
- IEEPA/Fentanyl tariffs on Canada at 25% effective March 4 but amended March 7 to exempt USMCA-eligible goods and allow for a 10% rate on potash and energy products.
- IEEPA/Fentanyl tariffs on Mexico at 25% effective March 4 but amended on March 7 to exempt USMCA-eligible goods and allow for a 10% rate on potash products.
- A major expansion of the lists of derivative steel and aluminum products to be assessed a 25% Section 232 tariff. This action also increased the aluminum tariff to 25% from the original 10% tariff.
- The March 12 elimination of the country-specific exemptions and tariff rate quotas to the Section 232 tariffs.
- The March 12 elimination of the general approved exclusions (GAE) to the Section 232 tariffs.
- The 232 action also provided for collection of the additional tariffs only on the component steel or aluminum on some derivative products. This added to our efforts to obtain the necessary information for reporting and the need for multiple entry lines for a single product, not to mention the selection of the proper provisional HTS. Importers also have to expend additional time gathering the information to be reported.
- Imports of beer and empty aluminum cans were added as aluminum derivatives effective April 3.
- Expansion of the 25% Section 232 tariffs to cover automobiles (April 3) and “major automotive components” (May 3). These will have unique provisional HTS codes.
- IEEPA/Reciprocal tariffs effective for goods from all countries on April 5 at 10%. This included an exemption for goods assessed a Section 232 tariff. The IEEPA/Reciprocal tariffs also have a long list of HTS numbers that are excluded and a provision to exclude some tariffs on products with a 20% US content from the tariff.
- Increased IEEPA/Reciprocal tariffs levied on specific countries were announced to replace the worldwide 10% tariff. These increased tariffs applied to all major trading partners and are assessed at a range from 11% up to 50%. Each tariff level had a unique provisional HTS and was scheduled to be effective on April 9
- An increase from 34% to 84% on the IEEPA/Reciprocal tariffs for China, Hong Kong, and Macau was announced for April 9.
- On April 9, the effective date of the increased IEEPA/Reciprocal tariffs, it was announced that the tariff rate for China, Hong Kong, and Macau would be immediately increased to 125% following China’s move to increase tariffs on US goods to 84%. The increased tariffs charged to specific countries were paused for 90 days, and the tariffs were reset to the 10% rate for all countries other than China, Hong Kong, and Macau. This also paused their rate-specific provisional HTS codes.
- On May 3, goods from China, Hong Kong, and Macau will no longer be eligible for the $800 de minimis exemption.
- On April 11, an additional list of 20 HTS headings covering electronics such goods as smartphones, laptops, and semiconductors were added to the exceptions list for the IEEPA/Reciprocal tariffs. The entire 8471 heading is included on this list; it covers all home and business computers, keyboards, and data storage units.
Other tariff actions are expected, from a secondary tariff to be imposed on goods from countries that purchase oil products from Venezuela to expected Section 232 actions to cover lumber, pharmaceuticals, copper, and computer chips. A proposed 200% tariff on beer, wine, and spirits from the EU is off the table for now.
As the year progresses, we expect that more tariff actions will be implemented, and we are concerned about the effect the additional tariffs will have on the sufficiency of importers’ Customs bonds.
Best Regards,
Sam McClure, LCB
Director of Compliance & Customs Services