FAQ - Trade and Tariffs

What is the status of the reciprocal tariffs that were announced on or around April 2 (“Liberation Day”)

On April 9, President Trump issued an Executive Order pausing the imposition of previously announced country-specific tariff rates between 10-50% for 90-days. Instead, the U.S. will apply an ad valorem 10% tariff to imports from nearly all countries, except China. Imported products from China will now face a 125% tariff. U.S Customs and Border Patrol guidance for complying with these new tariffs can be found here.

How do the reciprocal tariffs relate to preexisting tariffs, taxes and duties?

The reciprocal tariffs are placed on top of other tariffs, taxes and duties. For example, the 125% tariff on Chinese imports will be stacked on the 20% fentanyl IEEPA tariffs, plus section 301 tariffs (if applicable), plus MFN duty.

Are products subject to the previously announced tariffs on aluminum derivates excluded from the reciprocal tariffs?

Yes, Sec 3(b) of the reciprocal tariff E.O. states: “The following goods as set forth in Annex II to this order, consistent with law, shall not be subject to the ad valorem rates of duty under this order: … (ii) all articles and derivatives of steel and aluminum subject to the duties imposed pursuant to … Proclamation 10895 of February 10, 2025 (Adjusting Imports of Aluminum Into the United States)”

Are USMCA products excluded from the reciprocal tariffs?

Yes, Sec. 3(d) of the reciprocal tariff E.O. states: “… all goods of Canada or Mexico under the terms of general note 11 to the HTSUS, including any treatment set forth in subchapter XXIII of chapter 98 and subchapter XXII of chapter 99 of the HTSUS, as related to the Agreement between the United States of America, United Mexican States, and Canada (USMCA), continue to be eligible to enter the U.S. market under these preferential terms.”

Are products with mostly U.S. content excluded from the reciprocal tariffs?

Yes, Sec. 3(f) of the reciprocal tariff E.O. states: “the ad valorem rates of duty set forth in this order shall apply only to the non-U.S. content of a subject article, provided at least 20 percent of the value of the subject article is U.S. originating.”

If, for example, a fishing lure is imported from overseas but is made primarily with components of U.S. origin (e.g., hooks, ball chains, etc.), the value of the U.S. materials in the product would be excluded from tariffs if they comprise at least 20% of the overall value of the product. CBP provided reporting guidance here.

Are the reciprocal tariffs based on which country the product was manufactured in, or imported into the U.S. from?

Tariffs are based on the product’s country of origin, not the country it’s shipped from. Customs has not yet released implementation guidance for the specific country-rates, but for the baseline rates, CPB Guidance Document #64649265 consistently uses the phrase “articles the product of (country).” 19 CFR § 134.1 defines country of origin as” the country of manufacture, production, or growth of any article of foreign origin entering the United States.”

Do the reciprocal tariffs apply to products coming from a foreign trade zone (FTZs)?

Yes. Reciprocal tariffs, as well as all other recent tariff actions, are levied at the same rates on products admitted to U.S. FTZs, regardless of whether they will be used for further manufacturing or warehousing/distribution.

Regarding the tariff on aluminum derivatives, how is value of the aluminum derivative to be determined?

On its FAQ webpage, CBP states: “the value of the steel/aluminum content is the total price paid or payable for that content, which is the total payment (direct or indirect, and exclusive of any costs, charges, or expenses incurred for transportation, insurance, and related services incident to the international shipment of the merchandise from the country of exportation to the country of importation) made/to be made for the steel/aluminum content by the buyer to, or for the benefit of, the seller of the steel/aluminum content. Normally, this would be based on the invoice paid by the buyer of the steel/aluminum content to, or for the benefit of the seller of the steel/aluminum content.”

What products are subject to the 25% tariffs on steel and aluminum derivatives, and therefore excluded from the reciprocal tariffs?

This spreadsheet provides Harmonized Tariff Schedule (HTSUS) codes and product descriptions for all products subject to E.O. 10895, “Adjusting Imports of Aluminum into The United States” and E.O. 10896, “Adjusting Imports of Steel into The United States.”

Must products subject to the aluminum derivative tariffs (e.g., fishing reels) contain a minimum amount of aluminum to qualify for the exemption to the reciprocal tariffs?

No, the aluminum derivative tariffs are based on the product’s HTSUS code (e.g., 9507.30.2000, 9507.30.4000, 9507.30.6000, 9507.30.8000, 9507.90.6000). Therefore, any product being imported under any of the HTSUS codes listed on the steel and aluminum annexes is exempted from the reciprocal tariffs, regardless of its aluminum content.

What is the status of the de minimis rule?

The de minimis rule allows goods valued under $800 to be entered into the U.S. duty, tariff and tax free by one person on one day. In an Executive Order signed on April 2, President Trump announced that de minimis eligibility will be eliminated for all Chinese-origin goods, including Hong Kong, beginning May 2. Such action follows a previously issued E.O. that terminated de minimis for articles from China that was temporarily suspended. Additionally, de minimis entry will be terminated for all other countries once the Commerce Secretary notifies the President that “adequate systems” are in place to process shipments and collect tariff revenue.

What is the First Sale Rule?

The First Sale Rule (Treasury Decision 96-87, January 2, 1997) allows importers to declare a lower customs value for certain types of qualifying importations. It permits companies to reduce their duties by entering goods at a lower value than the price actually paid to the foreign vendor, as long as the legal requirements for the program are met. For example, an item may be produced in China, sold to a middleman in Hong Kong, and in turn sold to a buyer/importer in Los Angeles; the First Sale Rule would allow the U.S. importer to declare the product’s value, for import duty purposes, as the price of the original China-Hong Kong transaction. ASA recently held a webinar on the First Sale rule, which is available to ASA members. Please contact Mike Leonard for more information.