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IEEPA “Reciprocal” Tariff Rates

On July 31, 2025, President Trump issued an Executive Order establishing revised IEEPA “reciprocal” tariff rates for imports into the U.S. from specific countries. The new rates come after the President’s 90-day pause on the Liberation Day tariffs announced on April 2, 2025. The Executive Order contains two annexes:

  • Annex I to the Executive Order provides the list of tariffs rates for “[c]ertain foreign trading partners…[who] have agreed to, or are on the verge of concluding, meaningful trade and security agreements with the United States.” The rates provided for in Annex I will remain in effect until the agreements are concluded and memorialized.
  • Annex II to the Executive Order contains the modifications to the Harmonized Tariff Schedule. The rates provided for in Annex II are effective based upon the following timing:

With respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time 7 days after the date of this order, except that goods loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. eastern daylight time 7 days after the date of this order, and entered for consumption, or withdrawn from warehouse for consumption, before 12:01 a.m. eastern daylight time on October 5, 2025, shall not be subject to such additional duty and shall instead remain subject to the additional ad valorem duties previously imposed in Executive Order 14257.

Pursuant to the CSMS, for entries with multiple lines and HTSUS numbers, the following sequence must be followed:

1. Chapter 98 number (if applicable)

2. Chapter 99 number(s) for additional duties (if applicable)

3. For trade remedies, if applicable

  • first report the Chapter 99 number for Section 301,
  • followed by the Chapter 99 number for IEEPA Fentanyl,
  • followed by the Chapter 99 number for IEEPA Reciprocal,
  • followed by the Chapter 99 number for Section 232 or 201 duties,
  • followed by the Chapter 99 number for Section 201 or 232 quota

4. Chapter 99 number(s) for REPLACEMENT duty or other use, e.g., MTB or other provisions (if applicable)

5. Chapter 99 number for other quota (not covered by #3) (if applicable)

6. Chapter 1 to 97 number for the commodity tariff

Additional Transshipment Tariff

Pursuant to the Executive Order, if a product is found to be transshipped in order to evade applicable duties, a forty percent (40%) tariff will be applied to the product “in lieu of the additional ad valorem rate of duty applicable” under the Executive Order along with “any other United Stated duties, fees, taxes, exactions, or charges applicable to goods of the country of origin.” It is not clear whether the 40% tariff will be on top of the applicable duty rate for the proper country of origin. If a shipment is found to be transshipped U.S. Customs and Border Protection can also issue fines and penalties associated with the improper origin. Furthermore, there is no clear definition of what constitutes “transshipment” under these new tariffs nor is there clarity on how Customs and Border Protection (CBP) will identify and assess any transshipment tariffs.

European Union

Under Annex I, the European Union’s total ad valorem duty rate is capped at fifteen percent (15%). For example, if a product from the EU is already subject to a 15% duty rate, no additional rate will be applied to such product.

Canada – Imports Now Subject to 35% Tariff

In a separate Executive Order also issued on July 31st, President Trump increased the IEEPA tariff rate on Canada from twenty-five percent (25%) to thirty-five percent (35%) pursuant to the International Emergency Economic Powers Act (“IEEPA”) based on the fentanyl national emergency declared by President Trump in February 2025. Goods qualifying under the USCMA remain exempt from the IEEPA fentanyl tariffs. Section 232 tariffs on goods of Canadian origin also remain at 50%.

The tariff stacking rules in place prior to the President increasing the IEEPA fentanyl tariffs to 35% are still applicable. The Executive Order increasing the rate provides the following:

(d) The stacking rules set out in Executive Order 14289 of April 29, 2025 (Addressing Certain Tariffs on Imported Articles), and any subsequent order or proclamation addressing stacking of tariffs imposed under IEEPA, shall continue to apply to goods that are subject to subsection (a) of this section. (emphasis added).

Therefore, this EO did not make any changes to the tariff stacking outlined in this Presidential Proclamation and this CSMS.

Mexico

There are no further changes for 90 days with respect to Mexico. The IEEPA Fentanyl tariffs remain at 25%; goods qualifying for USMCA are still exempt from tariffs; and the Section 232 tariffs also remain unchanged.

The Husch Blackwell international trade team is continuing to monitor developments and will provide updates as they arise.