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U.S.-China Trade War Intensifies

On April 8, 2025, President Trump issued an Executive Order raising the reciprocal tariff rate on Chinese imports from 34% to 84%. This move followed his earlier warning that the U.S. would impose a 50% increase unless China withdrew its 34% retaliatory tariffs on American goods.

China swiftly responded by matching the new U.S. tariff rate, raising its own tariffs on U.S. exports to 84%. The tit-for-tat escalation continued on April 9, when President Trump issued another Executive Order, which further raised tariffs on Chinese imports to 125%. In a direct response, China matched the 125% tariff on U.S. goods on April 11, intensifying the trade conflict.

Even though imports from China valued at $800 or less would no longer qualify for de minimis treatment starting May 2, 2025, they were not spared from the trade war. Both Executive Orders increased tariffs and flat fees on small-value packages from China which are now as follows:

  • For postal items, the tariff is increased from 90% to 120% of the package’s value or replaced with a flat fee per postal item.
  • For goods entered between May 2, 2025, and before 12:01 a.m. EDT on June 1, 2025, the flat fee is now $100.
  • Beginning June 1, 2025, the flat fee will rise $200.

Rest of the World: Pause and Negotiation Signals

Despite the escalating tensions with China, President Trump took a different approach with other trading partners. On April 9, 2025, as we reported, the country-specific reciprocal rates for 83 countries that took effect on April 9, 2025, were paused for a period of 90 days and were lowered to 10% starting April 10, 2025 and through at least July 9, 2025. Moreover, on April 5, 2025, U.S. Customs and Border Protection (“CBP”) issued guidance through the Cargo Systems Messaging Service (“CSMS”) that duty drawback is available for the 10% universal baseline tariffs that take effect on April 5, 2025.

In response to this shift, the European Union announced a 90-day suspension of its own 25% retaliatory tariffs on U.S. goods and willingness to negotiate with the U.S. Countries including Vietnam, India, Japan, and South Korea have also signaled interest in negotiating with the U.S., suggesting the door remains open for de-escalation—at least beyond China.

Legislative Development

Seven Republican senators, including Sen. Chuck Grassley of Iowa, the Senate’s president pro tempore, and Sen. Mitch McConnell of Kentucky, the former Senate Republican leader, joined forces on a bipartisan bill aimed at reining in President Trump’s use of sweeping tariffs. The legislation would require congressional approval for such tariffs when invoked under the authority of the International Emergency Economic Powers Act of 1977 (“IEEPA”). Under the proposed bill, the president would be mandated to notify Congress within 48 hours of imposing or increasing tariffs, providing a detailed explanation for the decision. Additionally, the administration would need to deliver an assessment outlining the potential economic effects of the tariffs on U.S. businesses and consumers. Most importantly, to prevent indefinite tariff measures, the legislation stipulates that any new tariffs would automatically expire after 60 days unless Congress passes a joint resolution to approve them. President Trump has already signaled his intent to veto the bill, were it to pass through Congress.

OFAC Issues Russia-Related General License

The Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued Russia-related General License 13M, authorizing U.S. persons, or entities owned or controlled, directly or indirectly, by a U.S. person, to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, certifications, or tax refunds to the extent such transactions are prohibited “Directive 4 under Executive Order 14024.”