2025 U.S. Tariffs and Their Impact on Global Trade

New U.S. Import Tariff Changes on goods from China, Canada, and Mexico – March 4, 2025

Effective March 4, 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 March 2, 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 March 4, 2025, the additional tariff rate for China/Hong Kong 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 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.

true

New Canada Import Tariff Changes on goods from the U.S. – March 4, 2025

Effective March 4, 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.

false

New Tariffs on Aluminum/Steel Imports - February 13, 2025

Effective March 12, 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 March 12, 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 February 10, 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 March 12, 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.

false

China De Minimis Update - February 7, 2025

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 until the Secretary of Commerce confirms adequate tariff collection systems are ready. Canadian, Mexican, and Chinese Imports - February 5, 2025 Please be informed that non-de minimis shipments will be subjected to formal entry or informal entry depending on various circumstances.

Canadian, Mexican, and Chinese Imports - February 5, 2025

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

• China & Hong Kong Tariffs (Effective February 4, 2025)

  • An additional 10% tariff applies to all goods from China and Hong Kong.
  • 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 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 February 3, 2025, these tariffs have been paused for at least 30 days while negotiations continue.

What are tariffs and how do they work?

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.

Who pays the tariffs?

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.

How will the new U.S. tariffs for China and Hong Kong be applied?

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

What are Rules of Origin and how are Rules of Origin applied?

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.

With the new US tariffs, can I still claim de minimis (below $800 USD per day)?

Yes, de minimis is currently allowed for US imports as a result of an amendment to the February 1, 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 March 2, 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.

Are there exceptions to the 20% additional duties for China and Hong Kong origin goods?

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.

Can I claim duty drawback on new U.S. tariffs for China, Mexico or Canada?

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

How will the new U.S. tariffs impact my business and supply chain?

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.

How are shipments subject to formal entry handled vs. informal entry?

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 harmonized 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.

As a shipper, how should I prepare my clearance documents to be compliant with the new regulations?

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.

Informal Entry (Shipment valued above $800 USD up to $2,500 USD and no article value exceeding $250 USD)

• Provide a complete and accurate commercial invoice with product details, description of goods, country-of-origin, and 10-digit Harmonized Tariff Schedule of the United States (HTSUS). Customers may also visit to identify the harmonized tariff code for their items. UPS^® Paperless Invoice is recommended for submitting this information.
• Duties and taxes as imposed by the U.S. customs.
• UPS customs brokerage fees (including Duty/Tax Forwarding Surcharge and Disbursement fee) will be charged to the shipper or consignee depending on the shipment’s bill terms.
• Note: UPS may act as the Importer of Record (IOR) for shipments, subject to compliance with all applicable regulations.

Formal Entry (For shipment valued above US $800 and up to US $2,500, which includes any single article# valued exceeding US $250; or for shipment valued over US $2,500)

• Provide a complete and accurate commercial invoice with product details, description of goods, country-of-origin, 10-digit Harmonized Tariff Schedule of the United States (HTSUS), and Importer Tax ID with Employer Identification Number (EIN) or Social Security Number (SSN). Customers may also visit to identify the harmonized tariff code for their items. UPS^® Paperless Invoice is recommended for submitting this information.
• Merchandise Processing Fee (MPF), duties, and taxes as imposed by the U.S. customs.
• UPS customs brokerage fees (including Duty/Tax Forwarding Surcharge and Disbursement fee) will be charged to the shipper or consignee depending on the shipment’s bill terms.
• Note: UPS may act as the Importer of Record (IOR) for shipments valued below US $50,000, subject to compliance with all applicable regulations.

How can UPS help?

At UPS, we work regulatory 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.