Tariffs and Their Impact on Global Trade

In light of potential changes announced by U.S. Customs and Border Protection (CBP), UPS may require additional time to ensure compliance with regulatory requirements. As a result, please note that some shipments may experience delays, and any new duties or taxes incurred during this period will fall under the responsibility of the customer. While UPS strives to minimise any impact on shipments, we are unable to assume liability for any duties or taxes that may arise, including those due to shipment holdovers. The UPS Service Guarantee does not apply where delays result from these regulatory requirements.

As per standard practice, if duties or taxes cannot be collected from the receiver, the charges may be billed to the shipper.

Effective 12 March 2025, the U.S. government will impose a 25% tariff on all steel and aluminum imports. These tariffs also apply to certain derivative products made from steel and aluminum. For a full list of these newly added classifications, please visit the Federal Register Notice for Imports of Aluminum and Steel.

Effective 4 March 2025, a 25% tariff will be applied on all goods of Canada and Mexico origin. Energy resources (oil, natural gas, and electricity) from Canada are subject to a 10% tariff. These increased tariffs were originally scheduled to take effect on February 4 but were delayed for 30 days.

Per Executive Orders dated 2 March 2025, duty-free de minimis exemption is available on all products of Canada and Mexico origin. The de minimis exemption shall cease to be available for these goods upon notification by the Secretary of Commerce to the President that adequate systems are in place to fully and expeditiously process and collect tariff revenue.

Also, effective 4 March 2025, the additional tariff rate for China / Hong Kong SAR origin goods, previously set at +10%, has been amended to +20%, on top of any existing tariffs. Per Executive Order dated Feb 5, 2025, duty free de minimis exemption is available for China/Hong Kong SAR origin goods. This is pending notification by the Secretary of Commerce that adequate systems are in place to fully and expeditiously process and collect tariff revenue.

Effective 4 March 2025, certain goods imported into Canada and originating in the U.S. are subject to an additional surtax in the amount of 25% of the value for duty. This surtax will apply in addition to previously existing duties, regardless if the goods are imported for commercial or personal purposes, even when exported from a country other than the U.S.

Additionally, the U.S. origin goods subject to the surtax includes those that may be eligible for the remission of customs duties, sales and/or excise taxes under the Postal Imports Remission Order or the Courier Imports Remission Order (including de minimis exception treatment).

More information will be provided as it becomes available.

Effective 12 March 2025, the US government will impose a 25% tariff on all steel and aluminum imports.
Here are some key specifics about the tariff changes:

• The tariffs on both steel and aluminum imports will be set at 25%.
  • This applies not only to steel and aluminum imports from countries subject to Sec. 232 tariffs since 2018 but also to those previously exempt, including Argentina, Australia, Brazil, Canada, the EU, Japan, Mexico, South Korea, Ukraine, and the United Kingdom.
  • Imports of steel from Turkey will remain subject to a 50% tariff.
• The tariffs apply to certain derivative products made from steel and aluminum. Starting 12 March 2025, additional derivative steel and aluminum articles will also be subject to tariffs. We are awaiting a list of these newly added products. The tariffs apply unless the steel was melted and poured in the US or the aluminum was smelted and cast in the US.
  • Importers of derivative steel and aluminum articles must provide necessary documentation to US Customs and Border Protection (CBP) to verify steel/aluminum content origin.
  • If a derivative steel article does not fall under Chapter 73 of the Harmonized Tariff Schedule (HTS), tariffs will apply only to the steel content.
  • If a derivative aluminum article does not fall under Chapter 76 of the HTS, tariffs will apply to only the aluminum content.
• Additionally, effective 11:59 pm ET on 10 February 2025, no new product exclusions will be granted or renewed based on insufficient US production.
  • Existing exclusions will remain valid until their expiration date or until the excluded product volume is exhausted - whichever occurs first.
  • All General Approved Exclusions (GAEs) will be terminated on 12 March 2025
• For goods subject to the new tariffs that are being imported into a Foreign Trade Zone (FTZ), they must be designated as “privileged foreign status” within FTZs.
• Any attempt to misclassify steel or aluminum imports to evade duties will result in maximum monetary penalties under the law, with no consideration for mitigating factors.
• There will be no duty drawback of steel or aluminum import tariffs under the updated program.

An executive order on Friday is temporarily reinstating the de minimis trade exemption for small packages from China. However, this exemption will end once the Secretary of Commerce informs the President that systems are in place to efficiently process and collect tariff revenue on these items.

As of now, under the February 7 amendment to the order affecting tariffs on China, de minimis remains in effect for eligible goods from China and Hong Kong SAR until the Secretary of Commerce confirms adequate tariff collection systems are ready. Canadian, Mexican, and Chinese Imports - 5 February 2025 Please be informed that non-de minimis shipments will be subjected to formal entry or informal entry depending on various circumstances.

On 1 February 2025, the US administration issued three Executive Orders impacting tariffs on Canadian, Mexican and Chinese imports. The following changes took effect at 12:01 am EST on 4 February 2025:

• China & Hong Kong SAR Tariffs (Effective 4 February 2025)
  • An additional 10% tariff applies to all goods from China and Hong Kong SAR.
  • De minimis treatment is suspended, meaning all shipments-regardless of value- are subject to applicable duties.
  • Section 321 (US de minimis) waivers are no longer available for China or Hong Kong SAR goods.
  • Requests for de minimis entry and clearance for such shipments will be rejected.
• Canada & Mexico Tariffs (Currently Paused Until March)
  • Initially, an additional 25% tariff was set to apply to all goods from Canada and Mexico.
  • Energy resources (oil, natural gas and electricity) from Canada were subject to a 10% tariff.
  • As of 3 February 2025, these tariffs have been paused for at least 30 days while negotiations continue.

Tariffs are taxes levied by a government on imported goods, increasing their cost upon entry. These taxes serve various purposes, such as protecting domestic industries, generating government revenue, and balancing trade relations. When a tariff is applied, the importer pays the additional duty at customs before the goods are released. These costs often pass through the supply chain, often leading to higher prices for businesses and consumers.

While tariffs are imposed on foreign goods, the financial burden typically falls on domestic consumers. Importers pay tariffs to US Customs and Border Protection upon the goods' entry. These additional costs are typically passed along the supply chain, increasing prices for businesses and consumers.

Tariffs are applied to all goods originating from China and Hong Kong SAR per the Federal Register Notice.

Rules of Origin are the criteria used to determine a product's country of origin for trade and customs purposes. They are essential in applying tariffs, trade agreements and import restrictions. In this case, the Rules of Origin will ensure that all products from targeted countries are subject to tariffs, regardless of their routing to the US.

Yes, de minimis is currently allowed for US imports as a result of an amendment to the 1 February 2025 US Executive Order that suspended de minimus treatment of goods originating in China, including Hong Kong SAR.

Two additional US Executive Order amendments were published on 2 March 2024 also confirming de minimis remains in effect for goods originating in Canada and Mexico.

These amendments all note that the suspension of de minimis may reinstituted pending notification by the Secretary of Commerce that adequate systems are in place to fully and expeditiously process and collect tariff revenue.

Some exemptions may exist for specific commodities as noted in the Cargo Systems Messaging Service (CSMS) bulletin #  63988468. Customers should seek guidance from a qualified professional to confirm if these apply to their products.

No. The additional duties imposed by the Executive Order are not eligible for duty drawback.

US trade policy changes will likely increase landed costs due to tariffs and require adjustments to import declarations. Businesses may need to adjust pricing or explore alternative supply chains to manage costs effectively.

Please be informed that non-de minimis shipments will be subjected to formal entry or informal entry depending on various circumstances.
 
For formal entry, Merchandise Processing Fee (MPF) and duties and taxes as imposed by the customs, as well as UPS customs brokerage fees will be billed to shipper or consignee depending on the shipment’s bill term.
 
For informal entry, UPS customs brokerage fees and applicable duties and taxes will be billed to shipper or consignee depending on the shipment’s bill term.
 
You may also visit here to identify the harmonised tariff code for your goods. If you are shipping a single commodity that is valued over $2,500 you will be required to fill out an Electronic Export Information (EEI) form. EEIs are filed electronically with ACE, either by you or UPS on your behalf.

All shippers are urged to ensure that all information on the commercial invoice is accurate and detailed to facilitate a more efficient customs clearance process and avoid potential delays.

Please click here to learn more about the respective entry type based on shipment value, requirements and applicable fees for goods originating from China or Hong Kong SAR origins.

At UPS, we work regularly with our customers to assess new risks and opportunities in their supply chains based on the evolving regulatory landscape. Our priority is to minimize disruption to your business operations and provide the expertise you need to manage these changes confidently. We have various logistics solutions to minimize disruptions and ensure compliance with evolving regulations.

Please click here to learn more.

Disbursement fee, Warehouse storage fee and Additional tariff lines surcharge are the most commonly billed brokerage surcharges. For these charges, the charge applicable in the destination country will be assessed. A Duty/Tax forwarding surcharge will be charged when the duties and/or taxes are billed outside the destination country. Please see the surcharge descriptions below and the corresponding fees referenced below are for shipments destined to the U.S.

Disbursement fee: A fee of the amount paid or processed by UPS on behalf of the customer will be charged. Shipments to U.S. destinations will incur a fee of 2% of duty/tax (minimum $14.00).

Warehouse storage fee: This will be assessed when shipments remain in the UPS warehouse in the U.S. after the two free days, regardless of the customs broker. A minimum of US $25 + US $0.05 per lb. per day will apply after two days. The rate of $0.10 per lb. per day will apply after 7 days.

Additional tariff lines surcharge: A fee of $3/line applies when more than three entry lines are entered for shipments destined to U.S. destinations. UPS is not responsible for consolidating entry lines for customs clearance, including lines containing the same Harmonized Tariff Code and Country of Origin.

Duty/Tax forwarding surcharge: When the “Duty/Tax Forwarding Surcharge” billing option is selected, a surcharge of THB690.00 will be billed to the shipper.