'Reciprocal' Tariffs

Legal basis: International Emergency Economic Powers Act (IEEPA)

Scope: Most countries, excluding Canada and Mexico

Effective date: 7 August 2025

Tariff rate

• Rates ranging from 10% to 41% imposed on nearly 70 countries.
• 10% "baseline" tariff applied to countries not listed by name in Annex I to EO 14236, eg, Australia.
• 40% transshipment tariff, plus fines and penalties, imposed on any articles "determined by [CBP] to have been transshipped to evade applicable duties".
• The 40% transshipment duty rate applies in addition to the rate of duty for the actual country of origin of the goods.
• US authorities to publish a list of "countries and specific facilities used in circumvention schemes" and update every six months.
• For special arrangements with China, see Fentanyl Tariffs – China.
• The EU has negotiated a slightly different agreement than all other countries: (i) for goods that had a duty rate of less than 15%, the effective rate will be 15%; (ii) for goods that had a duty rate of 15% or more, the effective rate will remain unchanged (the Reciprocal Tariff will be zero), eg, an existing tariff of 5% will be raised to 15%, but an existing tariff of 30% will remain unchanged.

Carve-outs

• Exceptions listed in EO 14257 continue to apply to the "finalized" Reciprocal Tariffs announced on July 31, 2025 in EO 14326.
• Exceptions include: (i) articles subject to 50 U.S.C. § 1702(b);8 (ii) all articles and derivatives of steel/aluminum already subject to Section 232 tariffs; (iii) all automobiles and automotive parts already subject to Section 232 tariffs; (iv) all articles listed in Annex II to EO 14257, including copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products; (v) all articles from a trading partner subject to the rates set forth in Column 2 of the Harmonized Tariff Schedule of the United States (HTSUS); and (vii) all articles that may become subject to Section 232 tariffs.

To view the full article click here