Recent Posts

Categories

Modifying U.S. Reciprocal Tariffs with The People’s Republic of China

05/14/2025 | Dominion Customs Consultants Inc | ,

Executive Order published May 12, 2025

In light of the recent trade discussions in Geneva , this post provides a summary of the recently announced Executive Order modifying the U.S. reciprocal Tariffs with The People’s Republic of China. To review the complete document, please click on the link below.

MODIFYING RECIPROCAL TARIFF RATES TO REFLECT DISCUSSIONS WITH THE PEOPLEโ€™S REPUBLIC OF CHINA

Section 1. Background

  • Executive Order 14257 (April 2, 2025): Declared a national emergency due to persistent U.S. goods trade deficits. Imposed additional ad valorem duties deemed necessary to protect national security and the economy.
  • Retaliation Clause: The order allows for modifications of the Harmonized Tariff Schedule (HTSUS) if trading partners retaliate against U.S. actions.
  • Executive Order 14259 (April 8, 2025): Amended reciprocal tariffs and updated duties for low-value imports from China, reflecting the need to respond to China’s retaliatory measures.
  • Executive Order 14266 (April 9, 2025): Further modifications to tariff rates in light of trading partner retaliation, specifically addressing the PRC’s response to previous orders.
  • Negotiations with China: Following Executive Order 14266, the U.S. initiated discussions with China to address trade reciprocity and national security concerns, marking a significant step towards remedying non-reciprocal trade arrangements.
  • Suspension of Duties: A 90-day suspension of additional ad valorem duties on PRC imports was announced, allowing for a reevaluation of tariffs based on ongoing negotiations.

Section 2. Suspension of Country-Specific Ad Valorem Rate of Duty

  • Effective Date: Starting from 12:01 a.m. eastern daylight time on May 14, 2025, a new tariff structure will be implemented for goods imported into the United States from the PRC, including Hong Kong and Macau.
  • Tariff Rate: An additional ad valorem rate of duty of 10 percent will apply to all articles imported under this new regulation, reflecting significant changes in trade policy.
  • Executive Orders Influence: This tariff rate modifies the previous application of rates specified in Executive Order 14257, which initially suspended a portion of the duty for 90 days, retaining a 10 percent rate thereafter.
  • Removal of Previous Rates: The newly established rates will also remove the modified additional ad valorem duties imposed by Executive Orders 14259 and 14266, indicating a shift in the administration’s approach to tariffs.
  • Economic Impact: These changes are expected to have profound implications for trade relations and economic conditions, influencing pricing, supply chains, and market dynamics.
  • Trade Progress: The adjustments reflect ongoing trade negotiations and efforts to address economic challenges, showcasing the evolving landscape of international trade.

Section 3. Tariff Modifications

  • Effective Date: The modifications to the HTSUS will take effect on May 14, 2025, at 12:01 a.m. eastern daylight time.
  • Heading 9903.01.25 Changes:
    • The article description will be removed and replaced with:
      • โ€œArticles the product of any country, except for products described in headings 9903.01.26โ€“9903.01.33, and except as provided for in heading 9903.01.34, as provided for in subdivision (v) of U.S. note 2 to this subchapter.โ€
  • Heading 9903.01.63 Adjustments:
    • The rate of โ€œ125%โ€ will be replaced with โ€œ34%โ€ wherever it appears.
  • Subdivision (v)(xiii)(10) Modifications:
    • Similar to heading 9903.01.63, the rate of โ€œ125%โ€ will also be amended to โ€œ34%โ€ in this subdivision.
  • Suspension of Tariff:
    • The changes to heading 9903.01.63 and subdivision (v)(xiii)(10) will be suspended for a period of 90 days starting from May 14, 2025.

Section 4. De Minimis Tariff Decrease

To ensure the effective implementation of Executive Order 14257 and to prevent any undermining of its purpose, several significant tariff changes have been enacted:

  • Duty Reduction: The ad valorem rate of duty has been decreased from 120% to 54% as per section 2(c)(i) of Executive Order 14256, effective immediately.
  • Per Postal Item Duty: The existing duty of $100 per postal item, as stated in section 2(c)(ii) of Executive Order 14256, will remain in effect until further notice, despite an anticipated increase to $200 on June 1, 2025.
  • HTSUS Modifications: Effective May 14, 2025, the Harmonized Tariff Schedule of the United States (HTSUS) will be amended:
    • The term โ€œ120 percentโ€ will be replaced with โ€œ54 percentโ€ in subdivision (w) of U.S. note 2 to subchapter III of chapter 99.
    • The provision regarding the duty rate for merchandise entered after 12:01 a.m. eastern daylight time on June 1, 2025, will be updated to reflect the new specific duty rate.

Section 5. Implementation

  • The Secretary of Commerce, Secretary of Homeland Security, and the U.S. Trade Representative are tasked with implementing the order in consultation with several key officials, including the Secretary of State and the Chair of the U.S. International Trade Commission.
  • These officials are directed to take necessary actions consistent with applicable law, which may include:
    • Temporary suspension or amendment of regulations.
    • Adoption of new rules and regulations.
  • They are authorized to utilize all powers granted by the International Emergency Economic Powers Act (IEEPA) to effectively implement this order.
  • Each executive department and agency is required to take appropriate measures within their authority to ensure the order’s implementation.

Section 6. General Provisions

This order does not alter the authority of executive departments or agencies, nor does it affect the Director of the Office of Management and Budget’s functions regarding budgetary, administrative, or legislative proposals.

  • Authority: The order respects the existing legal authority granted to executive departments and agencies, ensuring that their functions remain intact.
  • Implementation: It will be executed in accordance with applicable laws and the availability of appropriations, ensuring compliance with financial regulations.
  • Legal Standing: The order does not create any enforceable rights or benefits for any party against the United States or its entities, safeguarding the government’s legal framework.
  • Publication Costs: The Department of Commerce will bear the costs associated with the publication of this order, indicating a structured approach to administrative expenses.

Should you or your organization have any questions,

please do not hesitate to contact your Dominion Customs Consultants representative,

or feel free to reach us here

U.S. Announces China Trade Deal in Geneva