US Tariffs: State of Play and Recommendations for Business

The nature of the tariffs introduced and the means by which they have been implemented(1) make the US trading environment unprecedentedly uncertain. Even where traders are not presently directly impacted, they should prepare and be ready to mitigate future US tariffs.

Current Tariffs

On 29 April, President Trump issued a new Executive Order (the "29 April EO") which confirms that some of the tariff policies listed below will not apply cumulatively (or 'stack' on top of one another). As such, (1) goods subject to the s.232 tariffs on automobiles or automobile parts are not also subject to the Canadian or Mexican Fentanyl-related tariffs or any s.232 tariffs on aluminum and steel; and (2) goods subject to the Canadian or Mexican Fentanyl-related tariffs are not also subject to any applicable s.232 tariffs on aluminum and steel articles or derivative products.

(i) General Customs Duty Rate

Like other WTO members, the USA maintains a 'business as usual' set of standard customs duties (i.e. tariffs) consistent with its GATT commitments (the "Applied Tariff Rate"). This is the tariff rate that exporters will be accustomed to, and it continues to be applied in addition to the additional tariffs detailed below (i.e. the various tariff policies of the Administration are cumulative) notwithstanding the 29 April EO.

(ii) IEEPA "Reciprocal Tariffs"

On 2 April 2025, so-called "Reciprocal Tariffs" were instituted under Executive Order 14257 (the "Reciprocal Tariffs EO"), made under the International Economic Emergency Powers Act ("IEEPA"). The Reciprocal Tariffs have two elements:

1. a base-line global tariff of 10% on essentially all goods imported into the USA (the "Baseline Reciprocal Tariffs"); and
2. country-specific additional higher tariffs applied to goods originating from any of the approximately 60 countries listed in Annex 1 to the Reciprocal Tariffs EO (the "Additional Reciprocal Tariffs").

The Reciprocal Tariffs (both Baseline and Additional) apply an effectively uniform tariff rate to all impacted goods determined exclusively by their country of origin, subject to a number of exceptions:

• The Reciprocal Tariffs do not apply to goods listed in Annex 2 to the Reciprocal Tariffs EO. Such goods include, for example, pharmaceutical products, semiconductors, and books. The Reciprocal Tariffs EO was also recently amended to add smartphones, laptops and other sophisticated consumer electronics to this list of excluded goods. However, the nature of the IEEPA tariffs means they can be amended quickly, and inclusion in Annex 2 does not guarantee long-term security from tariffs – especially given announced further measures expected to be applied in the near future (see below).
• Goods originating from Canada and Mexico which fall within the scope of the US-Mexico-Canada Free Trade Agreement ("USMCA") agreed under the first Trump administration are excluded (see (iii) below).
• If at least 20 percent of the value of the imported good is U.S.-originating, meaning the components are produced entirely in or substantially transformed in the U.S., then the Reciprocal Tariffs apply only to the value of the non-U.S.-origin content of the product.

On 10 April 2025 (after one day in force), the Administration suspended the Additional Reciprocal Tariffs for 90 days until 9 July 2025, with the exception of goods from China.

In the case of China, following a series of escalating countermeasures instituted by each of China and the US, the position as at the date of this blog is that Chinese goods are subject to an Additional Reciprocal Tariff rate of 125%.

The Administration has stated it is currently negotiating with third countries. Where negotiations are successful, the long-term Additional Reciprocal Tariffs as it applies to a negotiation partner may be reduced or removed entirely. However, without a further executive order the Additional Reciprocal Tariff will return as provided in Annex 1 to the Reciprocal Tariffs EO. 

The 10% Baseline Reciprocal Tariff continues to apply to all countries except China (for which the Additional Reciprocal Tariff rate applies), Canada and Mexico (for which the below Fentanyl tariff applies). The Reciprocal Tariffs EO states that the Reciprocal Tariffs will remain in effect until the President determines the threat posed by the trade deficit is "satisfied, resolved, or mitigated."

(iii) IEEPA Fentanyl/Migration Tariffs

In response to their alleged role (or failure to act) concerning the import of fentanyl and illegal migration, on 4 March 2025, the Trump Administration imposed (i) 20% tariffs on all goods imported from China; (ii) 10% on all "non-USMCA compliant" energy and potash imported from Canada; and (iii) 25% goods on all other "non-USMCA compliant" goods imported from Mexico and Canada.

If a good imported from one of these countries to the USA is "USMCA compliant", these IEEPA tariff rates will not apply. In practice, a large share of Mexican and Canadian exports to the US are USMCA-compliant. Compliance with USMCA largely involves certifying the origin of goods as produced with sufficient inputs and labour from the signatory countries (for instance, automative parts are USMCA-compliant if 75% if their value derives from inputs sourced in a signatory country, and over 50% of the value of labour employed has earned over $16 per hour).

(iv) s.232 TEA – Automobiles Tariffs

On 26 March 2025, by executive order and on the basis of s.232 Trade Expansion Act 1962 ("TEA"), which empowers the executive branch to conduct investigations into national security risks and apply responsive tariffs where they are found to exist, the Administration applied 25% tariffs to automobiles and auto parts imported into the USA, irrespective of their country of origin. Tariffs on automobiles began to apply on 3 April 2025, and tariffs on automobile parts will take effect on 3 May 2025.

On 29 April 2025, President Trump issued an Executive Order which creates certain exceptions for these tariffs, by instituting  an offset to a portion of tariffs for automobile parts used in U.S.-assembled vehicles equal to 3.75% of the Manufacturer’s Suggested Retail Price (MSRP) of a manufacturer’s U.S. production for the next year (3 April 2025 to 30 April 2026), and 2.5% of U.S. production the year after (1 May 2026 to 30 April 2027).

(v) s.232 TEA – Steel and Aluminium Tariffs

As from 12 March 2025, by executive order and on the basis of s.232 TEA, the US has applied 25% tariffs on all steel and aluminium (and steel and aluminium derivatives) imported into the US.

(vi) s.301 Trade Act - Chinese Shipping tariffs

On 17 April 2025, the Trump Administration announced the results of an investigation (commenced under the Biden Administration) under s.301 of the Trade Act 1974, concerning Chinese shipping.

S.301 empowers the US government to respond to unreasonable or discriminatory foreign government acts, policies, and practices that burden or restrict U.S. commerce.

The Office of the US Trade Representative (USTR) determined that China has targeted the maritime, logistics, and shipbuilding sectors for dominance unreasonably, burdening or restricting U.S. commerce.

In response, the US will, from October 2025, begin charging fees on vessels docking at US ports which are (i) owned or operated by Chinese legal persons; (ii) Chinese-built; or (iii) foreign-built vehicle carriers.

Additionally, a second phase will begin from 2028, during which the US will implement restrictions on transporting LNG via foreign vessels. The restrictions will increase incrementally until 2047.

Future Tariffs

Even where it might appear that certain sectors or countries of origin have avoided the current scheme of tariffs, notably those products exempted from the Additional Reciprocal Tariffs under Annex 2 to the Reciprocal Tariffs EO, there is a real risk that many important currently-exempted goods may become subject to tariffs in the future.

The Trump Administration has already announced a number of s.232 TEA investigations which may lead to tariffs on currently exempted goods. The nature of s.232 TEA investigations afford the Administration a greater opportunity than already-announced IEEPA-based measures to tailor tariffs on sensitive goods to the particular interests/needs of US industry (and the Administration's concerns about national security):

(i) s.232 TEA tariffs – Pharmaceuticals

Pharmaceutical and other related life sciences products generally benefit from exemptions under Annex 2 to the EO, meaning they are not subject to "Reciprocal Tariffs".

However, on 1 April 2025, the US Department of Commerce initiated an s.232 TEA investigation into the national security implications arising from the import of pharmaceuticals, pharmaceutical ingredients, and their derivative products (including both finished generic and non-generic drug products, medical countermeasures, critical inputs such as active pharmaceutical ingredients and key starting materials, and derivative products of those items). The deadline for interested parties to submit comments is 7 May 2025.

If the Department of Commerce finds US national security to be adversely affected by the import of the investigated goods, it may recommend tariffs be applied.

The scope of the investigation is wide, although the nature of an s.232 TEA investigation does leave space for a more nuanced implementation of tariff measures than has been seen in the case of IEEPA-based tariff measures to-date.

(ii) s.232 TEA tariffs - Semiconductors

The US Department of Commerce has initiated an s.232 TEA investigation to determine the effects on national security arising from the import of semiconductors and semiconductor manufacturing equipment, and their derivative products.

The deadline for interested parties to submit comments is 7 May 2025.

If the Department of Commerce finds US national security to be adversely affected by the import of the investigated goods, it may recommend tariffs be applied.

(iii) Trucks

The US Department of Commerce has also initiated an s.232 TEA investigation into trucks (medium-duty, heavy-duty, and their derivative products). Any eventuating tariffs could therefore impact vehicles including work trucks, buses, vans and other larger vehicles.

(iv) s.232 TEA tariffs - Countries Importing Venezuelan Oil

As of 2 April 2025, the US can impose tariffs of 25% on all the goods imported into the US from any country which is found to import oil from Venezuela. However, as at the date of this blog, no country has been identified as doing so and so this tariff remains in practice unapplied.

(v) s.232 TEA tariffs – Copper and Lumber

The Department of Commerce is currently investigating the national security implications of imports of copper and lumber, which could lead to the imposition of s.232 tariffs on these materials.

Next Steps

Given the breadth of goods and countries of origin impacted by the Trump Administration's tariffs, any business exporting to (or importing into) the US should consider its position and develop tariff mitigation and contingency strategies, whether or not tariffs currently impact them directly.

Recommended actions for business to consider include:

• Supply Chain Optimisation: If feasible and appropriate, importers way wish to review supply chains to identify alternative and maximally tariff-efficient options, including adjusting the jurisdiction in which products are "substantially transformed". Nearshoring production to the US may also be an option for some producers.
• Product Optimisation: It may be possible to adjust product designs and inputs to optimise applicable tariff rates (for instance, by seeking to ensure a finished product's components are 20% US-origin, to minimise the applicability of Reciprocal Tariffs).
• Contract Review: Businesses should seek to understand their contractual liability with counterparties, and, where appropriate, reach agreement on how tariff costs should be allocated. It may be appropriate to seek legal advice on how existing contractual language applies to tariffs (including, for example, the applicability of force majeure clauses).

• Inventory Management: Adjust inventory levels and procurement schedules to align with tariff timelines and avoid excess costs.​ Explore forward-shipping of goods to US warehouses ahead of any tariff implementation deadlines.

• Provide Policy Input: Some businesses, especially US-headquartered importers, may wish to provide input on on-going US-s.232 investigations surveys, seeking to alert decision makers to real-world impacts. The deadline to contribute to the pharmaceutical and semiconductor investigations is 7 May 2025. For UK businesses, the British government held a formal consultation on how it should respond to "Reciprocal Tariffs", though no formal approach has been announced to-date – it is therefore not too late to seek more informal engagement with the UK government.
• Industry Collaboration: Engage with trade associations to advocate with US authorities for the most effective implementation of tariff policy, and share best practices with industry partners.
• Policy Monitoring: Stay informed about trade policy developments to anticipate and respond to changes promptly.

Our team

Fieldfisher's experienced multi-disciplinary international trade team includes lawyers who have worked for or supported Governments, international organisations and multi-national clients operating around the world in a wide variety of sectors.  We work closely with US partners to provide coordinated, comprehensive and practical advice to help business understand and manage the impact of international trade and tariffs. 

For more information, please contact  Andrew Hood or Roland Scarlett.

The contents of this blog do not constitute legal advice and are provided for general information purposes only.

(1) Whereas the legislation permitting s.301 Trade Act tariffs and s.232 TEA tariffs involve a relatively structured process, the Trump Administration has also used IEEPA to institute tariffs rapidly without the degree of stakeholder participation that usually accompanies the implementation of trade remedies.