In fewer than three months, the Trump administration has upended decades of US trade policy and practice in the wake of the administration’s America First Trade Policy articulated in the January 20, 2025, Presidential memorandum. A key facet of the administration’s trade policy is high broad-based tariffs imposed unilaterally by executive order and announced with minimal public notice. The administration relies on emergency Presidential powers provided in federal statute and the results of product-specific national security investigations that were completed during President Trump’s first term to impose several material tariff increases (the “Trump Tariffs”). This stands in contrast to the previous decades of US tariff policy, during which low tariffs generally prevailed and any material tariff increase was proceeded by a lengthy administrative process visible to the public.
Both the scale and implementation of the Trump Tariffs have slowed M&A activity in early 2025 and caused businesses to reassess their exposure to cross-border trade. The Trump administration intends the Trump Tariffs to increase US government revenue, re-shore US manufacturing, and result in certain changes to policy of US trading partners. Multiple US trading partners have retaliated by materially increasing their tariffs on US products, and others have indicated their intention to retaliate soon. President Trump has stated that he intends to respond to any retaliation with additional tariff increases. Also, numerous US trading partners are actively negotiating with the Trump administration to reduce tariffs. President Trump has stated that he is ready to make a deal with every country that wants to come to the table.
In this alert, we describe the current US tariff landscape at a high level and discuss key factors bearing on customs risk and exposure.
What Are the Trump Tariffs?
Canada & Mexico
As of March 7, imports from Canada and Mexico are subject to an additional 25% tariff, except that energy, energy products, and potash from Canada and Mexico are subject only to a 10% additional tariff. However, if imports are eligible for a 0% tariff under the US-Mexico-Canada Agreement (“USMCA”), they are exempt from these tariffs.
China
Starting April 9, Chinese imports became subject to an additional 125% tariff. Beginning May 2, a Chinese shipment valued at $800 or less that is shipped through the international postal network (“IPN”) is not subject to this additional 125% tariff. Instead, the IPN carrier can choose to pay either a 30% tariff or a flat fee per shipment of $25 (from May 2 – May 31) and $50 (from June 1 and after).
In response to the Trump Tariffs, China has increased its tariffs on US products, which caused the Trump administration to in turn increase tariffs on Chinese imports. Successive bouts of retaliation could further increase both countries’ respective tariffs.
Almost All Countries
As of April 9, imports from almost every country became subject to an additional 10% tariff. The Trump administration paused the country-specific tariffs listed in Annex I to this alert, which had briefly taken effect on April 9 and range from 10% - 125% (the 10% tariffs and Annex I tariffs, collectively, the “Reciprocal Tariffs”). Products from Canada and Mexico are not subject to the Reciprocal Tariffs because other tariffs, discussed above, apply to Canadian and Mexican products. Also, products from Belarus, Cuba, North Korea, and Russia are not subject to the Reciprocal Tariffs because they were already subject to elevated tariffs listed in column 2 of the US Harmonized Tariff Schedule. After the pause, only Chinese products are subject to the Annex I tariff, which is 125% for China.
Any Country that Purchases Venezuelan Oil
Starting April 2, the Secretary of State became authorized to impose an additional 25% tariff on the products of any country that purchases Venezuelan oil. Currently, no country is subject to this additional tariff.
Steel and Aluminum Products
As of March 12, an additional 25% tariff rate on all countries applies to steel and aluminum products, and to the steel or aluminum content of derivative products contained on a list administered by the US Customs and Border Protection (“CBP”). Derivative steel products processed in another country from steel melted and poured in the United States are exempt from this tariff. Similarly, derivative aluminum products processed in another country from aluminum products that were smelted and cast in the United States are exempt from these tariffs. A 200% tariff applies to Russian aluminum products, including products processed in another country from aluminum smelted and cast and Russia.
Automobiles
Starting April 3, all imported automobiles are subject to a 25% tariff. It is possible, however, for importers to pay the 25% tariff only on the non-US content once the Secretary of Commerce approves the non-US content of a particular automobile model as long as that automobile model is eligible for preferential treatment under the USMCA. Additionally, a 25% tariff will soon apply to automobile parts (likely before May 3). No additional tariff will apply to automobile parts that are eligible for preferential treatment under the USMCA until CBP establishes a process to ascertain their non-US content. At that point, CBP will assess a 25% tariff on only the non-US content.
Other Products
The Trump administration has stated that additional tariffs will be imposed on pharmaceutical products, semiconductors, critical minerals, copper products, and lumber products. No further details are publicly available regarding tariffs on these products.
Exceptions & Foreign Trade Zones
Certain narrow exceptions apply to some of these additional tariffs such as for prototypes, products advanced in value abroad and returned to the United States, donations, and informational materials. CBP does not assess tariffs on telecommunications/digital imports such as internet downloads of software or cross-border SaaS activity, and the Trump Tariffs do not change that.
Some of the Trump Tariffs, such as the Reciprocal Tariffs, allow importers to obtain a refund of tariffs paid to CBP if the products were subsequently exported or destroyed within the drawback timeline (usually 5 years, but it can be shorter), although other Trump Tariffs remove the ability to claim drawback, such as the tariffs specific to Canada and Mexico.
The Trump Tariffs remove much of the benefit typically afforded by a foreign trade zone (“FTZ”) because the Trump Tariffs assess the tariff on the product in its state when entered into the FTZ, as opposed to prior practice, which allowed the importer to choose either the tariff on the product as-entered into the FTZ or on the product in its state when it exited the FTZ.
Plan for Strict Enforcement
We anticipate that enforcement of tariffs under the Trump administration will be aggressive. Some of the published executive orders on tariffs include robust enforcement language directing CBP to assess the maximum monetary penalty for misclassification of subject products. If implemented, this new policy would be a departure from prior CBP practice where monetary penalties were generally reserved for more serious cases.
Accounting for Greater Customs Exposure
With the uncertainty and cost increases associated with the Trump Tariffs, importers and their affected business partners are devoting extra attention to products imported into the United States. While individual circumstances of importers, exporters, and their shipments require tailored analysis, most companies relying on imports into the United States should consider the following:
1. Who Acts as the Importer of Record?
The importer of record is the entity liable for paying all tariffs and for providing accurate information to CBP about the imported products, including the Harmonized Tariff Schedule (“HTS”) code, country of origin, and value. CBP requires the importer of record to exercise reasonable care when declaring information to CBP. The importer of record is usually required to maintain a bond to guarantee payment of tariffs. Given that a customs bond is typically commensurate with customs duty exposure, if the Trump Tariffs have caused an increase in expected customs duties, an importer’s bond will need to increase accordingly.
2. What are Your Shipping Terms?
If you do not act as importer of record, you are not required to pay tariffs to CBP. But your contracts with whomever is acting as the importer of record could require you to reimburse that party all or part of any tariffs.
Incoterms and related contractual terms can effectively shift the commercial burden of tariffs from the importer of record to another party. For instance, if an exporter sells to a US customer under delivered duty paid (“DDP”) terms, the price the US customer has agreed to pay the exporter should include all tariffs. If tariffs on the applicable product change after the parties have reached agreement for that sale and prior to the product’s importation, there could be a gap between the tariffs accounted for in the DDP purchase price and the tariffs actually assessed by CBP at the time of importation. CBP will look to the importer of record for payment of all tariffs, and that could require seeking redress from the exporter to make up the shortfall.
Conversely, if for instance taxes are excluded by contract from the purchase price (and if the contract’s terms include customs tariffs as taxes), the exporter should not be responsible for any tariffs owed. Because CBP will look to the importer of record for payment of all tariffs, the other parties should ensure they understand which party bears liability for paying tariffs. It is possible that certain parties will need to reset expectations or reassess their preferred position in the supply chain.
In response to the changing landscape, you should review all contracts that involve importation of goods into the United States to confirm which parties are contractually responsible for tariff increases and assess if any changes are warranted, whether to contracts, counterparties, operations, logistics, or otherwise.
3. What is the Appropriate Value?
The Trump Tariffs have increased the tariff rate assessed on the vast majority of products imported into the United States. All of the Trump Tariffs calculate the duty owed to CBP by multiplying the tariff rate by the declared value of the shipment.
As a general rule, the customs value is the price the importer pays to the exporter, minus certain expenses such as international freight and US inland freight, when applicable. Special rules value sales between affiliated companies.
Additionally, certain industries and commercial arrangements present special considerations. For instance, the price the importer pays can vary significantly depending on the locations of production and intellectual property. Also, arrangements such as royalties or partnerships involving the transfer of production machinery or design work can impact the value of a product as declared to CBP.
4. What is the Country of Origin?
Many of President Trump’s recently proposed or implemented tariffs are country-specific, and in these cases the tariff amount depends on the country of origin of the imported product. The country of origin is not necessarily the country of export and instead relates to the imported article’s production process. Country of origin is a legal determination that can depend on multiple factors, including component country of origin, manufacturing value-added, and the change in form, fit, or function of the product. A country of origin determination is a case-by-case analysis that looks at the totality of the circumstances and where no one factor is dispositive. Revisiting your products’ country of origin is advisable, given its impact on the amount of tariffs owed.
5. What is the HTS Code?
A product’s HTS code determines whether a product-specific tariff applies (as opposed to merely a country-specific tariff). Certain of the Trump Tariffs are product specific and some HTS codes are excepted from these new tariffs. Also, pre-existing tariffs still apply in addition to the Trump Tariffs, and ensuring that each of your products is classified under the correct HTS code will facilitate assessment of your tariff exposure and payment of accurate tariff amounts.
6. How Well Do You Understand the Location of Your Products’ Production Stages and Sourcing Channels?
A product’s country of origin, customs value, and HTS classification can each be influenced by specific factors related to the location of its production stages and sourcing channels. For instance, if one location provides a disproportionate amount of value, that could be relevant to the product’s origin for CBP purposes. If you purchased the product from a distributor or broker, that could influence the product’s value for CBP purposes.
Additionally, specific aspects of the Trump Tariffs depend on the percentage of US-origin content or the percentage of steel and aluminum content. Understanding these aspects may require a deep dive into supply chains and coordination with vendors or suppliers.
7. Who Bears the Burden of Delays at the Port of Entry?
Given the myriad tariff changes that have taken place, importers have reported delays at US ports of entry. In preparation for potential delays of your shipments, you should clarify who is responsible for carrying the storage or other costs. If CBP denies the entry of your products into the United States, it is important to understand with whom the responsibility to deliver the products rests and which party may be liable for damages if the delay can be attributed to that party’s action or inaction. If your contracts are unclear on these issues, you may consider reviewing and modifying them prior to any delay at the port.
A Successful Tariff Mitigation Strategy
As tariffs have quickly become a risk factor with material impacts on businesses, ensuring that you have assessed your supply chain, manufacturing process, and product characteristics from a customs perspective could be crucial to minimizing the adverse impact of the Trump Tariffs. The below table summarizes the current status of the Trump Tariffs as of the date of publication of this alert.
The tariffs in each box are cumulative to the tariffs in each other box, and also to tariffs that pre-exist the Trump Tariffs (including HTS Column 1 most favored nation tariffs and the China-specific Section 301 tariffs):
Global & Product-Specific Tariffs
| Effective Date | Global Rate | Country-Specific Rates | All Others Rate | |
| Automobiles | April 3 |
Canada:
Mexico:
|
25% | |
| Automobile Parts | Prior to May 4 |
Canada:
Mexico:
|
25% | |
| Steel Articles | March 12 | 25% | ||
| Derivative Steel Products | March 12 | Melted and Poured in US: 0% |
25% on steel content for certain enumerated products |
|
| Aluminum Articles | March 12 | 25% | ||
| Derivative Aluminum Products | March 12 | Smelted and Cast in US: 0% |
25% on aluminum content for certain enumerated products |
|
| Pharmaceuticals | TBD | TBD | TBD |
TBD |
| Semiconductors | TBD | TBD | TBD |
TBD |
| Critical Minerals | TBD | TBD | TBD |
TBD |
| Copper Products | TBD | TBD |
TBD |
TBD |
| Timber/Lumber | TBD | TBD |
TBD |
TBD |
| All Other Products1 | April 52 | Belarus: 0% Canada: 0% China: 125%4 Cuba: 0% Mexico: 0% North Korea: 0% Russia: 0% |
10%4 |
|
| All Other Products1 | July 8 | See Annex I table, below.4 |
10% (for a non-Annex I country)4 |
Canada, China & Mexico Tariffs
| Effective Date | Global Rate | Country-Specific Rates | All Others Rate | |
| Energy and Energy Products5 |
March 4 |
Canada: 10% Mexico: 10% |
||
| Potash |
March 4 |
Canada: 10% Mexico: 10% |
||
| All Other Products1 |
March 4 |
Canada:
Mexico:
|
Low Value Shipments ($800 or Less)
| Effective Date | Global Rate | Country-Specific Rates | All Others Rate | |
| Shipments Valued At $800 or Less (international postal network shipments only) |
May 2 |
China (at the option of the carrier):
|
0% | |
| Shipments Valued At $800 or Less (other than international postal network shipments) |
May 2 |
China: all applicable tariffs assessed |
0% |
Venezuelan Oil Secondary Tariffs
| Effective Date |
Global Rate |
Country-Specific Rates |
All Others Rate |
|
| All Products (Venezuelan Oil Secondary Tariffs) |
TBD |
Country TBD: 25% |
0% |
[1] While no exemption processes exist currently, certain tariff codes are excepted to some extent from the Trump Tariffs, such as prototypes and certain goods returned to the United States. President Trump has stated that his administration may consider granting certain exemptions.
[2] Goods in transit prior to April 5 (for the 10% baseline tariff) or April 9 (for China’s 105% tariff only) are not subject to the respective tariffs.
[3] This tariff is 0% until CBP establishes a process for determining non-US-origin content, at which point the tariff will be 25% only on the non-US-origin content.
[4] Tariffs are assessed on non-US content as long as at least 20% of the product’s value is US-origin.
[5] Energy and energy products are defined as: crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals.
Annex I Table
| Country | Tariff |
| Algeria |
30% |
| Angola |
32% |
| Bangladesh |
37% |
| Belarus | 0% |
| Bosnia and Herzegovina |
36% |
| Botswana |
38% |
| Brunei |
24% |
| Cambodia |
49% |
| Cameroon |
12% |
| Canada |
0% |
| Chad |
13% |
| China |
125% |
| Côte d`Ivoire |
21% |
| Cuba |
0% |
| Democratic Republic of the Congo |
11% |
| Equatorial Guinea |
13% |
| European Union |
20% |
| Falkland Islands |
42% |
| Fiji |
32% |
| Guyana |
38% |
| India |
27% |
| Indonesia |
32% |
| Iraq |
39% |
| Israel |
17% |
| Japan |
24% |
| Jordan |
20% |
| Kazakhstan |
27% |
| Laos |
48% |
| Lesotho |
50% |
| Libya |
31% |
| Liechtenstein |
37% |
| Madagascar |
47% |
| Malawi |
18% |
| Malaysia |
24% |
| Mauritius |
40% |
| Mexico |
0% |
| Moldova |
31% |
| Mozambique |
16% |
| Myanmar (Burma) |
45% |
| Namibia |
21% |
| Nauru |
30% |
| Nicaragua |
19% |
| Nigeria |
14% |
| North Korea |
0% |
| North Macedonia |
33% |
| Norway |
16% |
| Pakistan |
30% |
| Philippines |
18% |
| Russia |
0% |
| Serbia |
38% |
| South Africa |
31% |
| South Korea |
26% |
| Sri Lanka |
44% |
| Switzerland |
32% |
| Syria |
41% |
| Taiwan |
32% |
| Thailand |
37% |
| Tunisia |
28% |
| Vanuatu |
23% |
| Venezuela |
15% |
| Vietnam |
46% |
| Zambia |
17% |
| Zimbabwe |
18% |
This informational piece, which may be considered advertising under the ethical rules of certain jurisdictions, is provided on the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin or its lawyers. Prior results do not guarantee similar outcomes.
Contacts
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Nate Cunningham
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Carrie E. Miller
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Justin Shields
Associate