Recent Posts

Categories

UPDATE: U.S. Government Addresses “Stacking Effect” of U.S. Tariffs

04/30/2025 | Dominion Customs Consultants Inc | ,

UPDATED: June 4, 2025

ADDED: CSMS # 65236574 – UPDATED GUIDANCE โ€“ Proclamation โ€œAdjusting Imports of Aluminum and Steel in the United States,โ€ Amending Executive Order 14289, โ€œAddressing Certain Tariffs on Imported Articlesโ€

The purpose of this update is to provide updated guidance regarding tariff stacking pursuant to Executive Order 14289, โ€œAddressing Certain Tariffs on Imported Articlesโ€ amended by Proclamation โ€œAdjusting Imports of Aluminum and Steel into the United Statesโ€ issued on June 3, 2025.

Guidance

  • New Priority Order: Effective for goods entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. EDT on June 4, 2025.
  • Key Changes:
    • 1) 232 Auto/Auto Parts: Proclamation 10908 (March 26, 2025) adjusts imports of automobiles and parts.
    • 2) 232 Aluminum: Proclamation 9704 (March 8, 2018) modifies aluminum import regulations.
    • 3) 232 Steel: Proclamation 9705 (March 8, 2018) updates steel import adjustments.
    • 4) IEEPA Canada: Executive Order 14193 (February 1, 2025) imposes duties to combat illicit drug flow across the northern border.
    • 5) IEEPA Mexico: Executive Order 14194 (February 1, 2025) addresses duties related to the southern border situation.
  • Effective Dates: All changes take effect on June 4, 2025, marking a significant shift in import regulations.
  • Impact on Imports: These proclamations are expected to reshape the landscape of automobile, aluminum, and steel imports, potentially increasing costs for consumers and businesses reliant on these materials.

Applicability

  • Tariff Actions Overview: Filers subject to multiple tariff actions under EO 14289 will pay duties based on a specified prioritization order.
  • Duty Calculation Order:
    1. 232 Auto/Auto Parts Tariff: If an article falls under this category, it is exempt from 232 Aluminum, 232 Steel, IEEPA Canada, or IEEPA Mexico tariffs.
      • Note: Parts qualifying for USMCA preferential treatment are also exempt from these tariffs.
    2. 232 Aluminum and/or 232 Steel Tariff: If not subject to the Auto/Auto Parts tariff, filers should check for Aluminum and Steel tariffs. Duties apply to both aluminum and steel content for derivative products.
  • IEEPA Tariffs: If an article is subject to both 232 Aluminum/Steel and IEEPA Canada/Mexico tariffs, it will not be subject to the latter.
    • Note: Aluminum products from Russia or containing Russian aluminum are subject to a 200% duty rate.
  • USMCA Exemptions: Articles qualifying for preferential treatment under USMCA are exempt from IEEPA Canada and IEEPA Mexico tariffs.
  • Additional Duties: Articles subject to these tariffs may still incur other duties, taxes, fees, and charges, including those from the Harmonized Tariff Schedule and antidumping duties.

Reporting

  • Executive Order 14289 introduces specific tariff measures requiring filers to report additional duties and exemptions under Chapter 99.
  • Reporting Requirements:
    • Filers must report the appropriate Chapter 99 numbers for:
      • Additional duties due.
      • USMCA exemptions, if applicable.
    • Examples:
      • Passenger Vehicles and Light Trucks from Japan:
        • Report: 9903.94.01 / 25% (232 Autos)
      • Steel Auto Parts from Canada (qualifying for USMCA):
        • Report: USMCA 9903.94.06 (0%)
        • Also report: 50 9903.81.91 / 50% (232 Steel)
      • Steel from Canada (not qualifying for USMCA):
        • Report: 9903.81.87 / 50% (232 Steel)
  • Effective Dates:
    • These measures are effective immediately, impacting how businesses report their imports.
  • Impact on Imports:
    • The new reporting requirements aim to streamline the process and ensure compliance with tariff regulations.
    • Businesses must be vigilant in understanding these changes to avoid penalties and ensure proper reporting.

Effective Date

For the five tariff measures outlined in Executive Order 14289, filers must accurately report the corresponding Chapter 99 numbers for additional duties and any applicable USMCA exemptions.

Hereโ€™s a breakdown of the essential details:

  • Passenger Vehicles and Light Trucks from Japan:
    • Report: 9903.94.01 / Duty: 25% (232 Autos)
  • Steel Auto Parts from Canada (qualifying for USMCA preferential treatment):
    • Report: USMCA 9903.94.06 / Duty: 0%
    • Report: 50 9903.81.91 / Duty: 50% (232 Steel)
  • Steel from Canada (not qualifying for USMCA preferential treatment):
    • Report: 9903.81.87 / Duty: 50% (232 Steel)

These reporting requirements are crucial as they ensure compliance with the tariffs set forth in EO 14289. Notably, the modified tariff stacking applies to goods entered for consumption or withdrawn from warehouses for consumption starting June 4, 2025, at 12:01 a.m. eastern daylight time. Furthermore, EO 14289 applies retroactively to entries of merchandise subject to the five applicable tariff measures on or after March 4, 2025.

Refunds of Previous Duty Payments

The recent tariff measures outlined in Executive Order 14289 bring significant changes to the reporting and refund processes for importers. Here is an overview of the key points:

  • Reporting Requirements: Filers must report the appropriate Chapter 99 numbers corresponding to additional duties and USMCA exemptions.
  • For instance:
    • Passenger vehicles and light trucks from Japan: Report as 9903.94.01 / 25% (232 Autos).
    • Steel auto parts from Canada qualifying for USMCA preferential treatment: Report as USMCA 9903.94.06 (0%) and 50 9903.81.91 / 50% (232 Steel).
    • Steel from Canada not qualifying for preferential treatment: Report as 9903.81.87 / 50% (232 Steel).
  • Effective Dates:
    • The provisions are retroactive for covered articles entered for consumption or withdrawn from warehouse for consumption on or after March 4, 2025.
    • The new stacking order for tariffs is effective for goods entered for consumption on or after June 4, 2025.
  • Refund Requests:
  • Refund requests can be filed starting May 16, 2025
  • Exclusions: Refunds are not authorized for certain tariff measures, such as 232 Autos/Auto Parts, which remain at the top of the stacking order.

Previous Post

Executive Order issued by President Trump on April 29, 2025

Below is a summary of President Trump’s Executive Order, ADDRESSING CERTAIN TARIFFS ON IMPORTED ARTICLES. The purpose of this order is to prevent the “stacking” of tariffs under various new tariff regimes. This “stacking” of tariffs according to the President, creates a level of protection that is too high for the goals these orders seek to achieve.

To review this Executive Order, please click on the link below:

ADDRESSING CERTAIN TARIFFS ON IMPORTED ARTICLES

Section 1. Purpose

  • The United States has implemented tariffs to safeguard national security and address significant threats to its economy and foreign policy.
  • These tariffs are established through various statutory authorities and Executive Orders, each serving distinct policy purposes.
  • A recent determination aims to prevent the cumulative effect of overlapping tariffs on the same articles, which could lead to excessively high rates of duty.
  • The new order outlines a procedure for deciding which tariff will apply when multiple tariffs are applicable to a single article.
  • This change is intended to streamline tariff application, ensuring that the rates are necessary to achieve the intended policy goals without unnecessary stacking.

Section 2. Applicability

This order governs the administration of tariffs imposed through various proclamations and executive orders aimed at managing imports and addressing border issues.

2(a) Section 232 National Security Order imposing tariffs on autos and auto parts

  • Proclamation 10908 (March 26, 2025): Adjusts imports of automobiles and automobile parts into the United States.

2(b) IEEPA Orders imposing tariffs on goods of Canada

  • Executive Order 14193 (February 1, 2025): Imposes duties to combat the flow of illicit drugs across the northern border, further amended by:
  • Executive Order 14197 (February 3, 2025): Updates on the situation at the northern border.
  • Executive Order 14226 (March 2, 2025): Additional amendments regarding drug flow.
  • Executive Order 14231 (March 6, 2025): Further amendments to address drug trafficking.

2(c) IEEPA Orders imposing tariffs on goods of Mexico

  • Executive Order 14194 (February 1, 2025): Implements duties to address issues at the southern border, with amendments from:
  • Executive Order 14198 (February 3, 2025): Progress updates on the southern border situation.
  • Executive Order 14227 (March 2, 2025): Additional amendments for southern border duties.
  • Executive Order 14232 (March 6, 2025): Further amendments focusing on drug flow.

2(d) Section 232 National Security Order imposing tariffs on steel and derivative products

  • Proclamation 9704 (March 8, 2018): Adjusts imports of aluminum into the U.S., amended by:
  • Proclamation 9980 (January 24, 2020): Adjustments for derivative aluminum and steel articles.
  • Proclamation 10895 (February 10, 2025): Further adjustments to aluminum imports.

2(e) Section 232 National Security Order imposing tariffs on aluminum and derivative products

  • Proclamation 9705 (March 8, 2018): Adjusts imports of steel into the U.S., with amendments including:
  • Proclamation 9980 (January 24, 2020): Similar adjustments for derivative articles.
  • Proclamation 10896 (February 10, 2025): Additional adjustments to steel imports.

Section. 3. Non-Stacking of Tariff Measures

3(a) Tariff Conditions

This section outlines specific conditions under which tariffs will be applied to various articles. It establishes a framework that prevents double taxation on certain articles while specifying when additional tariffs may apply.

No Additional Tariffs:

  • Articles subject to tariffs under section 2(a) will not incur additional tariffs under sections 2(b) to 2(e).
  • Similarly, articles under sections 2(b) or 2(c) will not face extra tariffs from sections 2(d) or 2(e).

Conditions for Additional Tariffs:

  • Articles listed in section 2(d) may be subject to additional tariffs under section 2(e), provided they meet necessary conditions.
  • Conversely, articles under section 2(e) may also face additional tariffs from section 2(d), contingent on compliance with specified criteria.

Subsection (a) of this section shall not be construed to diminish the validity of any action listed in
section 2 of this order. Each action listed in section 2 of this order remains independently valid and enforceable, except that the duty rates provided by these actions shall not be cumulative when the conditions outlined in subsection (a) of this section are met.

If an imported article is subject to both a tariff imposed pursuant to subsection (a) of this section
and one or more tariffs imposed pursuant to an action or actions not listed in section 2 of this order, then the tariff imposed on the article pursuant to subsection (a) of this section shall be cumulative with the tariff or tariffs imposed pursuant to the action or actions not listed in section 2 of this order.

Section 4. Non-applicability to Other Tariff Measures

The order does not change the application of existing duties, taxes, fees, or exactions beyond those specified in section 2. Articles subject to duties under section 2 may still incur additional charges.

These additional charges may include:

  • Duties listed in the Harmonized Tariff Schedule of the United States (HTSUS).
  • Duties imposed under section 301 of the Trade Act of 1974.
  • Duties from Executive Order 14195, aimed at addressing the synthetic opioid supply chain in China.
  • Antidumping and countervailing duties, which are designed to protect domestic industries from unfair competition.

Section 5. Implementation

  • Secretary of Homeland Security’s Role: The Secretary, through the U.S. Customs and Border Protection Commissioner, is tasked with updating guidance and enforcement mechanisms to align with the new tariff policy set forth in the order.
  • Coordination with Other Departments: The Secretary of Commerce and the Secretary of Homeland Security will collaborate with the Secretary of the Treasury and the United States Trade Representative to ensure consistent interpretation and application of the new policy.
  • HTSUS Changes: The Secretary of Homeland Security has the authority to determine necessary changes to the Harmonized Tariff Schedule of the United States (HTSUS) and will coordinate these changes with the U.S. International Trade Commission.
  • Implementation Timeline: Changes to the HTSUS must be completed by 12:01 a.m. EDT on May 16, 2025. This ensures a structured timeline for compliance with the new regulations.
  • Retroactive Application: The order applies retroactively to all merchandise entries subject to the applicable tariffs from March 4, 2025 onward, allowing for refunds to be processed according to U.S. Customs and Border Protectionโ€™s standard procedures.

Section 6. General Provisions

  • Authority and Functions: The order does not interfere with the legal 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.
  • Implementation: This order will be implemented in accordance with applicable laws and is subject to the availability of appropriations.
  • Rights and Benefits: The order explicitly states that it does not create any enforceable rights or benefits, either substantive or procedural, for any party against the United States or its entities, officers, or agents.

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

United States Reciprocal Tariffs and Their Impact on Trade
U.S. Tariffs: Automobiles & Automobile Parts into the U.S.