Key Changes to Ad Valorem Duty Rate, Tariff Modifications and De Minimis for China
Trade Update • May 13, 2025
ollowing a joint announcement on Monday, May 12, 2025, the United States and China agreed to take initial steps toward easing their ongoing trade dispute. In response, the White House issued a new Executive Order – Modifying Reciprocal Tariff Rates To Reflect Discussions With The People’s Republic Of China – detailing how key tariff changes will be implemented—specifically for ad valorem duties, tariff classifications, and de minimis thresholds affecting goods from China, Hong Kong, and Macau.
10% Ad Valorem Duty on China
Effective May 14, 2025, all goods imported from China, Hong Kong, and Macau will be subject to a 10% ad valorem tariff—down from the prior 34% to 125% range set in earlier Executive Orders.
This revised tariff:
Suspends 24 percentage points of the duty previously imposed under EO 14257;
Removes higher rates introduced by EO 14259 and EO 14266;
Applies to all applicable imports unless exempt under prior exceptions.
This 10% rate is not retroactive and will remain in effect until mid-August, unless extended or modified by future executive action.
Tariff Modifications to HTSUS Effective May 14
To implement this adjustment, the Harmonized Tariff Schedule of the U.S. (HTSUS) will be amended as follows:
Heading 9903.01.25: Updated to apply broadly to goods from all countries unless otherwise noted.
Heading 9903.01.63 (IEEPA Reciprocal) and related notes: Duty rate reduced from 125% to 34%, but suspended for 90 days.
The suspension ensures that the 10% duty rate under 9903.01.25 takes precedence during the 90-day period.
De Minimis Tariff on Low-Value Imports Also Reduced
The Executive Order also addresses low-value imports (under de minimis thresholds), particularly those affected by the synthetic opioid supply chain provisions in EO 14256:
The ad valorem duty on certain Chinese-origin low-value goods is reduced from 120% to 54%.
The $100 per package postal duty cap remains in place and the planned increase to $200 on June 1 is cancelled.
HTSUS references updated to reflect these reductions, effective May 14.
Summary of Key Changes
Measure | Change |
---|---|
Ad Valorem Tariff (China) | Suspended 24 pts; new flat 10% rate |
HTSUS Heading 9903.01.63 | Reduced from 125% to 34%, suspended for 90 days |
Low-Value (De Minimis) Imports | Duty reduced from 120% to 54% |
$100 Postal Item Duty Cap | Maintained; no $200 hike on June 1 |
Suspension Duration | 90 days, through August 12, 2025 |
9903.01.63 (IEEPA Reciprocal) is suspended for 90 days – use catch all of 9903.01.25 (10%). The IEEPA Fentanyl will still apply 9903.01.24 (20%). After the 90 days the 9903.01.63 (IEEPA Reciprocal) will come back into play at 34%.
How GHY Can Help
GHY specializes in helping businesses navigate and reduce the impacts of tariffs through strategic solutions tailored to their needs. Our experts can audit your supply chain to identify inefficiencies, uncover cost-saving opportunities, and ensure compliance with evolving trade regulations. We also employ tariff engineering techniques to optimize product classification and sourcing strategies, minimizing duty exposure and maximizing profitability.
By partnering with GHY, your business gains access to the tools and expertise needed to streamline operations and stay competitive in a challenging trade environment.
Contact Us Today! Booking a Meeting, email consult@ghy.com, or call +1 (800) 667-0771.
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