U.S Updates Reciprocal Tariff Rates to Address Trade Deficits and Security (Updated)

Trade Update • Updated August 5, 2025

Key Points:

• The U.S. has updated tariffs on imports from several countries to address trade imbalances and protect national security.
• Tariff rates vary by country, mostly between 10% and 41%, as listed in the official order.
• For European Union goods, tariffs are raised to at least 15% if their current rates are lower; no change if already 15% or higher.
• These tariffs take effect seven days after the order date, except for shipments already in transit.
• Trying to avoid tariffs by routing goods through other countries will trigger a 40% tariff plus penalties.
• CBP Guidance now available.

resident Donald J. Trump issued an update to Executive Order 14257 (originally signed April 2, 2025), which regulates imports with reciprocal tariffs to address large and persistent U.S. goods trade deficits. This update imposes additional or modified tariff rates on goods from certain trading partners as a response to ongoing trade imbalances that threaten the U.S. national security and economy.

CBP Guidance: Reciprocal Tariff Updates Effective August 7, 2025

What Are the New Tariff Rules?

• The tariff rates apply to goods from listed countries starting 7 days after the order’s date (i.e., from August 7, 2025, at 12:01 a.m. Eastern Time).

• Goods already loaded on vessels and in transit before the cutoff time and date will continue to be subject to the prior lower tariffs if they enter the U.S. before October 5, 2025.

• For countries with trade deficits with the U.S., tariffs will increase from 10% to rates between 15% and 41%, based on the size of the deficit.

• Countries not listed specifically in the updated Annex I will continue to face a default additional 10% ad valorem tariff.

• If the current tariff on EU goods is less than 15%, the new tariff will be added to bring the total to 15%. If the current tariff is already 15% or more, no extra tariff will be added.

• Imports from China, including Hong Kong and Macau, are not affected by this update and remain subject to a 10% tariff under a separate order.

Excemptions

• Goods from Canada and Mexico that qualify under the United States-Mexico-Canada Agreement (USMCA) are exempt when properly declared.

• Products from certain countries like Belarus, Cuba, North Korea, and Russia

• Donations intended for humanitarian aid, informational materials, and certain metals and vehicles covered by previous trade security measures

• Items that contain at least 20% U.S.-made content will only have tariffs applied to the portion of the product made outside the U.S.

How Will Tariff Evasion Be Handled?

U.S. Customs and Border Protection (CBP) will vigilantly monitor shipments to detect attempts at evading tariffs, including goods routed through third countries to avoid duties.

• Goods found to be transshipped for evasion purposes will face:

  • A 40% additional ad valorem tariff instead of the usual country-specific rate

  • Additional fines and penalties as allowed by law, including under 19 U.S.C. 1592 (related to fraudulent import entries)

• CBP will not allow mitigation or remission of these penalties.

• The Government will publish a biannual list of countries and specific facilities involved in tariff evasion schemes.

Examples of Adjusted Tariff Rates (from Annex I)

New tariff rates are specified in Annex I and are applied through modifications to the U.S. Harmonized Tariff Schedule (HTSUS), as detailed in Annex II of the Executive Order.

• Algeria: 30%
• Bangladesh: 20%
• European Union: minimum 15% total tariff if previously lower
• India: 25%
• Iraq: 35%
• Japan: 15%
• Laos: 40%
• Serbia: 35%
• Switzerland: 39%
• Syria: 41%
• United Kingdom: 10%
• Vietnam: 20%

Note: This is a selection; the full list includes many countries with various rates. For the complete list, please check GHY Tariff Tracker under the Reciprocal Tariffs tab.

Important Steps for Importers

• Review new tariff rates for your country of origin and product codes to assess cost impacts.
• Check the tariff rates for your goods’ country and product category.
• Note the timing of shipments to know which tariffs apply.
• Avoid routing goods through other countries to skip tariffs.
• Stay updated on trade deals that may affect your tariffs.
• Work closely with your customs broker for full compliance.

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.