Related Thought Leadership and Analysis
- DHS, Treasury, and CBP Seek to Modify the De Minimis Exemption from Duties and Fees for Low Value Shipments
By Lars-Erik A. Hjelm, Suzanne Kane, Emily Opp, Sarah B. W. Kirwin, Tebsy Paul, Laura M. Driscoll, David M. Krawiec, John D. Karellas
Key Updates
- March 3: Amendment posted to update the imposed tariff to 20%. The tariff rate on the original Executive Order stated 10%.
- February 5: Amendment posted allowing duty-free de minimis treatment until adequate systems are in place to collect tariff revenue.
Summary
On February 1, President Trump signed executive orders imposing additional tariffs on Canada, Mexico, and China under the International Emergency Economic Powers Act (IEEPA) in response to an emergency declared at the border related to fentanyl, drug trafficking, and illegal immigration concerns. As to China, the order provides the following:
- Legal basis: International Emergency Economic Powers Act (IEEPA)
- Rate: The order as originally published states a 10% rate on “all articles that are products of the PRC” as defined in a forthcoming Federal Register (FR) notice. Section 2(a). On March 3, 2025, an Amendment to the Executive Order increased the rate to 20%.
- Timing: The tariff applies to “goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern time on February 4, 2025, except that goods entered for consumption, or withdrawn from warehouse for consumption, after such time that were loaded onto a vessel at the port of loading or in transit on the final mode of transport prior to entry into the United States before 12:01 a.m. eastern time on February 1, 2025, shall not be subject to such additional duty, only if the importer certifies to U.S. Customs and Border Protection within the Department of Homeland Security as specified in the Federal Register” Section 2(a).
- Other important details:
- The order confirms that rates are cumulative with all other tariffs that would apply to the imported goods, including the existing Section 301 tariff action as applicable to any specific good. Section 2(b).
- No de minimis treatment will be available for shipments under $800 under 19 USC 1321. Section 2(g). On February 5, 2025, an Amendment to the Executive Order allowed for de minimis treatment until adequate systems are in place to collect tariff revenue.
- No drawback will be available for these duties (but drawback is otherwise still available). Section 2(f).
- Duty inversion benefits will not be available for the duties under this order with respect to merchandise entered into the United States from foreign trade zones. Section 2(e).
- No exclusions/exemptions, except a very narrow category of items expressly exempted from the President’s authorities under IEEPA in 50 USC 1702(b). Those items include communications, donations intended to relieve human suffering, certain “informational materials,” and “transactions ordinarily incident to travel” like personal baggage. Section 2(i).
- The order also states that if China retaliates, “the President may increase or expand in scope the duties imposed under this order to ensure the efficacy of this action.” Section 2(c).
Retaliatory Actions
China has announced retaliation against the U.S. action. Specifically, China’s Ministry of Commerce announced that it will file dispute settlement proceedings at the WTO. According to the statement, China also “will take corresponding countermeasures to firmly safeguard its rights and interests,” without specifying what those might be.
Additional Documentation
- Trump Executive Order - Further Amendment to Duties Addressing the Synthetic Opioid Supply Chain in the People’s Republic of China (March 3, 2025)
- Trump Executive Order - Amendment to Duties Addressing the Synthetic Opioid Supply Chain in the People’s Republic of China (February 5, 2025)
- Trump Executive Order - Imposing Duties to Address the Synthetic Opioid Supply Chain in the People's Republic of China
- White House Fact Sheet
- Federal Register
