CBP Updated Guidance: CSMS # 65829726 -Reciprocal Tariff Updates Effective August 7, 2025
This article contains a summary of Customs Border Protection’s updated guidance publication. CSMS # 65829726 -Reciprocal Tariff Updates Effective August 7, 2025.
To review the complete document, please click on the following link:
CSMS # 65829726 – GUIDANCE: Reciprocal Tariff Updates Effective August 7, 2025
Background
- Executive Order 14257 has been amended through a new directive issued on July 31, 2025
- The amendment is titled “Further Modifying the Reciprocal Tariff Rates” and updates existing trade policies
- These changes operate under the International Emergency Economic Powers Act (IEEPA), giving the government authority to regulate international commerce during emergencies
- Additional duties will be imposed on imported merchandise, potentially affecting prices of foreign goods
- The modifications represent ongoing adjustments to America’s trade relationships with other countries
Application of Additional Duty Rates
Key Changes Effective August 7, 2025
- Effective Date: All new tariff rules take effect at 12:01 a.m. EDT on August 7, 2025
- Scope: Imported goods from countries listed in Annex I face new reciprocal tariffs when entered for consumption or withdrawn from warehouse
- Classification System: New tariff categories 9903.02.02 through 9903.02.71 have been added to the Harmonized Tariff Schedule of the United States (HTSUS)
European Union Tariff Structure
The EU faces a unique two-tier system based on existing duty rates:
- Higher Duty Goods (15% or more existing duty rate):
- Zero reciprocal tariff applied
- Must file under heading 9903.02.19
- No additional costs beyond current rates
- Lower Duty Goods (less than 15% existing duty rate):
- Combined tariff structure ensures total 15% duty rate
- Reciprocal tariff fills the gap to reach 15%
- Must file under heading 9903.02.20
- Example: If current duty is 8%, reciprocal tariff becomes 7%
China Tariff Status
- No Changes: The July 31, 2025 Executive Order does not affect existing China tariffs
- Consistent Rate: China, Hong Kong, and Macau goods continue facing 10% reciprocal tariff
- Classification: Remains under heading 9903.01.25
- Separate Authority: These tariffs operate under Executive Order 14298, which stays unchanged
This policy creates a standardized 15% minimum tariff floor for EU goods while maintaining existing China tariffs. Importers must classify entries under new HTSUS headings based on origin country and existing duty rates.
Exemptions
The following HTSUS classifications apply to products that are exempted from the additional ad valorem duties imposed pursuant to the July 31, 2025, EO, “Further Modifying the Reciprocal Tariff Rates.”
In-Transit
- What’s Affected: Products from any country that meet specific shipping and entry requirements face new import duties
- Tariff Rate: 10% ad valorem reciprocal tariff – meaning 10% of the product’s value will be added as tax
- Critical Timeline:
- Products must be loaded and in transit before August 7, 2025 at 12:01 a.m. EDT
- But entered for consumption between August 7 – October 5, 2025
- Filing Requirement: Affected goods must be filed under heading 9903.01.25 for proper classification
9903.01.26: Canadian Trade Product Summary
- Canadian products enter the U.S. duty-free under the United States-Mexico-Canada Agreement (USMCA)
- Products receive special treatment through specific trade classifications in chapters 98 and 99
- Items classified under codes 9903.01.10 through 9903.01.15 must declare a secondary classification under 9903.01.26
- This secondary classification exempts products from reciprocal tariffs
- The system ensures smooth trade flow between Canada and the U.S. while maintaining proper customs documentation
9903.01.27: Mexican Trade Products Summary
- Products covered: Articles from Mexico, including those entering the U.S. duty-free under the United States-Mexico-Canada Agreement (USMCA)
- Special classifications: Items in categories 9903.01.01 through 9903.01.05 require secondary classification under 9903.01.27
- Tariff benefits: Proper classification allows exemption from reciprocal tariffs
- Trade agreement scope: Includes treatments outlined in specific chapters of U.S. trade code (HTSUS chapters 98 and 99)
- Key requirement: Correct product declaration ensures access to preferential trade treatment between the three North American countries
9903.01.29: Trade Restrictions Summary
- Restricted Countries: Trade articles are prohibited from four specific nations • Affected Nations:
- Belarus
- Cuba
- North Korea
- Russia
- Classification: These countries are designated as “Column 2 rate countries” under general trade note 3(b)
- Impact: Products originating from these nations face significant trade restrictions
- Scope: Applies to various commercial articles and goods
9903.01.30: Humanitarian Donation Exemptions
- Donation exemptions apply to humanitarian articles like food, clothing, and medicine donated by US persons
- These donations must be intended to relieve human suffering to qualify for exemption
- The President can override this exemption through special determinations under HTSUS regulations
- Exemptions specifically cover articles under subchapter III of chapter 99 of the Harmonized Tariff Schedule
- This policy enables charitable relief efforts while maintaining presidential oversight for exceptional circumstances
9903.01.31: Informational Materials
Informational materials encompass a wide range of content designed to educate and inform audiences:
- Print Publications – Books, articles, and written documents
- Visual Media – Films, photographs, and artwork pieces
- Audio Content – Phonograph records and audio tapes
- Digital Formats – CD-ROMs, compact disks, and online feeds
- Specialized Storage – Microfilms, microfiche, and archived materials
- Marketing Materials – Posters and promotional content
- News Sources – Wire feeds and current information streams
These diverse formats serve as essential resources for sharing knowledge and information across multiple platforms and audiences.
9903.01.32: Trade Exception
- Exception applies to: Articles from any country classified under specific trade headings
- Legal framework: Based on Executive Order 14257 and related Presidential Memorandum from April 11, 2025
- Eligibility requirements: Merchandise must be properly classified in designated HTSUS headings and subheadings
- Key reference documents:
- Annex II and III of EO 14257
- Presidential Memorandum titled “Clarification of Exceptions”
- Only merchandise meeting exact classification requirements qualifies for this trade exception
9903.01.33: Trade Regulation Summary – Section 232 Actions
- Metal Products: Iron, steel, and aluminum articles plus their derivative products
- Vehicles: Passenger cars, SUVs, crossover vehicles, minivans, cargo vans, and light trucks (including parts)
- Copper Products: Semi-finished copper and intensive copper derivative items
- Regulatory Scope: All countries subject to Section 232 trade actions
- Classification: Products must meet specific HTSUS (trade classification system) requirements
- Legal Framework: Governed by Executive Order 14257 and official trade subchapter provisions
9903.01.34: U.S. Tariff Policy Summary
- 20% Rule: Articles containing at least 20% U.S.-originating content receive special tariff treatment
- U.S. Content Protection: The portion of an article that originates from the U.S. will not be subject to reciprocal tariffs
- Foreign Content Taxation: Only the non-U.S. content portion of articles will face reciprocal tariff assessment
- Mixed Origin Impact: This policy creates a split taxation system based on the geographic origin of article components
CHAPTER 98
General Exemption Rule: Most goods entering under Chapter 98 of the HTSUS are exempt from additional duties when U.S. Customs and Border Protection (CBP) approves the entry
Major Exceptions Where Additional Duties DO Apply:
- AGOA Program (Subchapter XIX, 9819) – Africa Growth and Opportunity Act goods
- Caribbean Basin Trade (Subchapter XX, 9820) – United States-Caribbean Basin Trade Partnership Act
- Free Trade Agreements (Subchapter XXII, 9822) – Various other international trade deals
- Assembly Operations – Goods under subheadings 9802.00.80, 9802.00.40, 9802.00.50, and 9802.00.60
Special Rules for Temporary Imports:
- Goods under Temporary Importation Under Bond (TIB) program (Subchapter XIII, 9813) have unique reporting requirements
- Must report three different HTSUS numbers: the dutiable IEEPA Chapter 99 number, appropriate 9813 number, and 1-97 HTSUS number
- No actual payment of IEEPA duties required for compliant TIB filings
- Reporting ensures proper bonding if goods fail to meet TIB requirements
While Chapter 98 generally provides relief from additional duties, significant trade programs remain subject to IEEPA Reciprocal tariffs. Proper classification and reporting are essential, especially for temporary imports requiring multiple HTSUS number declarations.
Transshipment
- Additional Penalty: Goods that are transshipped to avoid required IEEPA Reciprocal duties face an extra 40% ad valorem duty on top of regular charges
- CBP Enforcement Action: Customs and Border Protection will either:
- Direct corrections to entry documents, replacing the original classification with heading 9903.02.01
- Take action during liquidation to collect the additional duties
- Comprehensive Penalties: The 40% duty is imposed in addition to:
- Any other applicable fines or penalties
- Standard duties, fees, and taxes
- Other charges based on the goods’ country of origin
- Purpose: This measure targets businesses attempting to circumvent trade regulations through transshipment schemes
- Impact: Companies caught evading duties through transshipment face significant financial consequences beyond standard import costs
HTSUS REPORTING SEQUENCE
- Duty Association: For entry summary lines with multiple HTSUS numbers, duties must be correctly associated with their specific HTSUS codes
- No Combining Duties: The 10% duty for heading 9903.01.25 cannot be combined with duties from different HTSUS numbers within the same entry summary line
- Separate Reporting Required: Duties across multiple HTSUS numbers on one entry summary line must be reported separately, not combined onto a single HTSUS
- U.S. Content Articles: Items with at least 20% U.S. content under heading 9903.01.34 require two separate entry summary lines:
- First line: U.S. content portion
- Second line: Non-U.S. content portion
- Reciprocal Tariff Duty: Additional duty calculations based on non-U.S. content only
- ACE Transmission: All requirements apply when transmitting to the Automated Commercial Environment and producing printed 7501 forms
- Compliance is mandatory for accurate duty reporting and payment processing.
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