Modifying The Reciprocal Tariff Rates-Updates Effective August 7, 2025
- Noel Tran
- Aug 6
- 3 min read
In line with the July 31, 2025 Executive Order (EO) “Further Modifying the Reciprocal Tariff Rates”, U.S. Customs and Border Protection (CBP) has issued updated guidance on the application of reciprocal tariffs effective August 7, 2025. This update amends EO 14257 under the authority of the International Emergency Economic Powers Act (IEEPA) and impacts a wide range of imported goods. Below is a summary of what U.S. importers need to know to ensure compliance and avoid costly penalties.
1 - Application of additional duty rates:
Importers bringing goods into the U.S. from countries listed in Annex I of the Executive Order (excluding listed exemptions). For example:
Country | Reciprocal Tariff |
Vietnam | 20% |
Thailand | 19% |
Taiwan | 20% |
Cambodia | 19% |
Japan | 15% |
Goods entered for consumption or withdrawn from warehouse on or after 12:01 a.m. EDT on August 7, 2025 are subject to the HTSUS classifications 9903.02.02 – 9903.02.71 and associated reciprocal tariffs, as added to the HTSUS by Annex II of the EO.
Goods from the European Union (EU) depend on their Column 1 duty rate:
*duty rate ≥ 15%, the reciprocal duty is 0%, and file under 9903.02.19.
*duty rate < 15%, Column 1 + reciprocal = 15%, and file under 9903.02.20
Goods from China (including Hong Kong and Macau) remain subject to a 10% reciprocal tariff under EO 14298 and HTSUS heading 9903.01.25, unchanged by this new EO
2 - Some of exemptions:
The following HTSUS headings apply to goods exempt from the additional ad valorem duties per the EO 14257:
In-Transit Shipments: Goods loaded aboard a vessel before 12:01 a.m. EDT on August 7, 2025, and imported after that time but before 12:01 a.m. EDT on October 5, 2025, are subject to a 10% ad valorem reciprocal tariff under 9903.01.25
9903.01.26 – Goods from Canada: Includes goods not subject to duty under USMCA. Items classified under 9903.01.10 to 9903.01.15 should declare under 9903.01.26 for exemption.
9903.01.27 – Goods from Mexico: Same rules as Canada, applicable to items under 9903.01.01 to 9903.01.05
9903.01.29 – Column 2 rate country identified in general note 3(b): Belarus, Cuba, North Korea, and Russia.
9903.01.30 – Donated Goods: Includes food, clothing, medicine, etc., donated for humanitarian relief by a U.S. entity, unless directed otherwise by the President.
9903.01.31 – Informational Materials: Includes books, CDs, tapes, photographs, films, artwork, and similar.
9903.01.34 – Goods with ≥ 20% U.S. The entry must be split into two lines:
One for the U.S. portion (duty-free)
One for the non-U.S. portion (subject to retaliatory duty)
3 - Transshipment
If CBP determines that goods were transshipped to evade IEEPA tariffs, an additional 40% ad valorem duty will be imposed. CBP will require amendment of the declaration to replace the IEEPA HTSUS number with 9903.02.01, and collect the 40% duty, in addition to penalties and other fees.
For example: A company in China that manufactures knit T-shirts and ships them to a partner facility in Vietnam. At the Vietnam facility:
No substantial processing or manufacturing is done.
T-shirts are relabeled as “Made in Vietnam,” repacked and exported to the United States.
The U.S. importer declares the country of origin as Viet Nam and claims for reduced or duty-free treatment under Vietnam’s trade status.
This constitutes illegal transshipment because the true country of origin is China instead of Vietnam. Under the July 31, 2025 amendment to EO 14257, U.S. Customs will require the entry to be corrected and reclassified under 9903.02.01, triggering an additional 40% tariff on top of any applicable duties.
4 - Practical Tips for Importers:
Review and verify country of origin
Ensure timely declaration of the correct HTSUS heading
Avoid any suspicious routing or transits
Plan for tariff exposure in your pricing and contracts.
Stay updated on evolving trade rules.
Work closely with a licensed customs broker.
Contact Spirit CHB Inc – A Trusted U.S. Customs Brokerage with 20+ Years of Experience
📧 Import@spiritchbinc.com📞 714-383-9973
📌 Disclaimer & Contact Information
This blog post is intended to provide general information. It does not constitute legal advice or a comprehensive compliance guide. For specific questions or assistance with your import transactions, please consult official U.S. Customs and Border Protection resources or reach out to a licensed customs broker.
For more information, visit the official CBP website: https://www.cbp.gov
Or contact Spirit CHB, Inc. – A Trusted Customs Brokerage📞 Phone: (714) 383-9973
Comments