United States to apply unprecedented tariffs to all imported products

On 2 April 2025, US President Trump unveiled further elements of the "America First Trade Policy". More specifically he announced the implementation of his so called “reciprocal tariffs” aiming at hitting imports from all US trading partners as US exports are hit in those respective countries.

Effective midnight on 5 April, the US will apply an additional ad valorem import tariff of 10% for all US imports.

Furthermore, beginning midnight 9 April, this ad valorem rate will be increased for products originating in countries with which the United States has the largest trade deficits and which impose other trade barriers. Key US trading partners are amongst the most affected, with EU imports to face a 20% rate and a 34% tariff applied to all imports from China.  

The detail of the executive order did specify that certain goods will not be subject to these new reciprocal tariffs, including the previously announced 25% ad valorem tariff on steel and aluminum products (+derivatives), all automobile and automobile parts imports that went into effect as of 3 April, goods subject to ongoing investigations (such as copper, pharmaceuticals, semiconductors, etc.) and imports from Canada and Mexico that qualify for the USMCA agreement. Moreover, the reciprocal tariff of 12% for Canada and Mexico will not apply as long as the additional tariffs related to illicit drugs and illegal migration apply against both countries.

The new tariff rates supersede any existing most favored nation (MFN) rate, an agreement at the World Trade Organisation (WTO) level that disallows member nations from discriminating between their trading partners. Originally brought about to address non-reciprocal trading arrangements to reduce the trade deficit and free the US from its reliance on imported goods, the unprecedented measures casts further uncertainty for supply chains and global trading with the US, and continues to signal a broader international trade war.  

Retaliatory measures are expected by a large number of the affected countries and economic blocs. The EU is to announce its tariff countermeasures by mid-April, with other nations anticipated to issue immediate tariffs on US exports.  

With the new tariffs entering into force, businesses should immediately assess the impact these new tariffs have on their supply chain as well as on their overall tax and financial risk. Actions to consider include: 

• Review possibilities for duty mitigation via customs valuation: alignment of customs valuation with transfer pricing can result in lower landed tax rates at import to the US, including via "First Sale" for export planning or bifurcating product and non-product costs. 
• Consider strategies to delay, eliminate or recover potential excess import duties: review the potential use of special trade programs in the US such as bonded warehousing, Foreign Trade Zones (FTZ) and special classification provisions in Chapter 98.