On April 29, 2025, President Trump signed a Proclamation amending the previously announced tariffs on automobile parts used in passenger vehicles and light trucks. This amendment follows Proclamation 10908, which announced 25% section 232 tariffs on imports of certain final, assembled passenger vehicles and light trucks (“automobiles”), effective April 3, 2025, and imports of certain automobile parts, set to take effect on May 3, 2025. All in-scope passenger vehicles and light trucks (including SUVs and other types of passenger vehicles) and automobile parts are listed in Annex I of Proclamation 10908. Key automobile parts listed in Annex I of Proclamation 10908 include engines, engine parts, transmissions and powertrain parts, and certain electrical components.

Import Adjustment Offset for Automobile Parts Used in the Final Assembly of Passenger Vehicles and Light Trucks in the United States

The Proclamation provides that automobile producers (i.e., OEMs) that perform final assembly of passenger vehicles and light trucks in the United States will be eligible for an “import adjustment offset” amount applicable to section 232 duties for automobile parts. Specifically, these credits will be available to OEMs in an amount equal to 3.75 percent of the aggregate Manufacturer’s Suggested Retail Price (MSRP) value of all in-scope automobiles assembled in the United States by that automobile producer from April 3, 2025, through April 30, 2026. For automobiles assembled in the United States between May 1, 2026, through April 30, 2027, OEMs will be eligible to receive 2.5 percent of the aggregate MSRP value. These percentages reflect the total duty that would be owed when a 25 percent duty is applied to parts accounting 15% (2025-26) and 10% (2026-27) of the automobile’s MSRP value, respectively.

These percentages derive from the Trump Administration’s consultations with the automobile manufacturers that the highest level of U.S. content, including engineering and research and development, in automobiles assembled in the United States is 85% at present (with an aspirational target of 90% in 2026-27). The White House Fact Sheet that accompanied the Proclamation indicates that the Trump Administration has determined that of the 8 million automobiles assembled in the United States in 2024, the average domestic content was 50% and likely closer to 40%. According to the Administration, the import adjustment offset “will more quickly reduce reliance on foreign manufacturing and importation of automobiles and automobile parts; strengthen United States vehicle assembly operations by encouraging companies to expand domestic production capacity, which is critical to a strong domestic defense industrial base; shift manufacturing activity into the United States; increase domestic automotive research and development so that American-owned producers can produce cutting-edge technologies that are essential to the United States defense industrial base and our military superiority; create jobs in the automotive industry that increase the number of employees in the domestic automotive industry; and ensure that other benefits of production are concentrated in the United States.”

The import adjustment offset amounts will be available only to automobiles that undergo final assembly in the United States. The import adjustment offset amount may only be used by importers of record authorized by the automobile manufacturer, including the suppliers of the parts eligible for such offset amount. Specifically, a “manufacturer with an approved import adjustment offset amount may determine the importers of record eligible to decrement against that manufacturer’s import adjustment offset amount, and that list of importers of record may include suppliers in that manufacturer’s supply chain for automobiles assembled in the United States if the manufacturer so chooses.” As a result, the OEM ultimately decides which suppliers, if any, will be able to use that OEM’s import adjustment to offset the Section 232 25% automotive parts tariffs that will enter into force on May 3, 2025. The import adjustment offset amount, however, should not exceed the total amount attributable to the manufacturer’s total parts tariff liability.

On or before May 29, 2025, the Department of Commerce will establish a process by which manufacturers can submit the following information to obtain import adjustment offset:

  1. Projected U.S. vehicle production volumes and final assembly plant locations;
  2. Estimated tariff costs under Proclamation 10908, including direct and supplier-incurred amounts;
  3. The total import offset amount requested, per the schedule set by the Secretary of Commerce;
  4. A breakdown of importers of record authorized to use the offset, with corresponding importer of record numbers and allocations;
  5. A signed certification from a senior officer affirming the accuracy and completeness of the information, based on reasonable due diligence.

Once a manufacturer’s submission is verified and deemed eligible, the Secretary of Commerce will approve the application and notify U.S. Customs and Border Protection (CBP) with the necessary details—including importer of record numbers and approved offset amounts. CBP will apply the offset to the approved importers using its standard procedures, such as reducing tariff obligations at the time of entry or through other lawful means. Should an importer claim an offset amount that exceeds the amount approved by the Department of Commerce for a particular manufacturer, CBP may assess monetary penalties in the maximum amount permitted by law. Further, OEM-supplier dynamics will require consideration as the Proclamation does not require the OEM to automatically allow the supplier to use the import adjustment offset; as a result, the supplier may incur the tariff but is not guaranteed an offset by the OEM, unless otherwise required to do so in the supplier agreement (e.g., a contractual provision requiring the pass through of rebates or credits).

The Secretary of Commerce, in consultation with the Secretary of the Treasury and the Commissioner of CBP, will develop the necessary rules and guidance for implementing the Proclamation. An initial issue, which will likely be based on the May 29, 2025 submissions from the OEMs, will be a determination of what vehicles are subject to “final assembly in the United States.” Similar provisions, such as Treasury’s May 2024 Final Rule on the Inflation Reduction Act, defined final assembly as the process by which a manufacturer produces a vehicle “at, or through the use of, a plant, factory, or other place from which the vehicle is delivered to a dealer or importer with all component parts necessary for the mechanical operation of the vehicle included with the vehicle, whether or not the component parts are permanently installed in or on the vehicle.” A similar approach may be used in the Section 232 context.

USMCA Automobile Parts

The Proclamation is silent regarding USMCA-certified automobile parts that are potentially subject to tariffs after May 3, 2025. As indicated in the Update of April 3, 2025, the 25% tariff does not apply “to automobile parts that qualify for preferential treatment under the USMCA until such time that the Secretary, in consultation with CBP, establishes a process to apply the tariff exclusively to the value of the non-U.S. content of such automobile parts and publishes notice in the Federal Register.” While the Proclamation does not address whether USMCA-certified auto parts will remain exempt from the 25% tariffs, the White House Fact Sheet provides examples where “a manufacturer builds a car in the U.S. that has 85% U.S. or USMCA content, the manufacturer effectively will not owe tariffs on that vehicle’s production for the first year. If a manufacturer builds a car in the U.S. that is 50% U.S. or USMCA content and 50% imported from elsewhere, then instead of paying the tariff on the full 50% of the imported car parts, the manufacturer effectively only pays on 35% for the first year.” The implication from these examples is that USMCA automobile parts will remain exempt from the Section 232 25% duties, while non-USMCA automobile parts will use the import adjustments offset to reach duty-free treatment, but guidance/confirmation is needed. 

Non-U.S. Passenger Vehicles and Light Trucks and USMCA

For passenger vehicles and light trucks where the automobile producer does not perform final assembly in the United States (i.e., non-U.S. automobiles), Proclamation 10908 subjects such automobiles to 25% tariffs, with special provisions where the automobile is USMCA-certified (i.e., having 75% regional value content, 70% steel and aluminum content, and the requisite labor value content). If USMCA-certified, Proclamation 10908 provides a process where the automobile manufacturer will provide the Secretary of Commerce with documentation as to the amount of U.S. content, and the 25% percent tariffs will only apply to the non-U.S. content in the automobile. The OEMs and the Department of Commerce will be conducting this USMCA “domestic content” process parallel to the domestic, final assembly process due on or before May 29, 2025.

Stacking of International Emergency Economic Powers Act (IEEPA) and Section 232 Tariffs

Finally, the Trump Administration issued a separate Executive Order (the “stacking EO”) on the same day as the Proclamation indicating that the automobile and automobile parts tariffs will not “stack” with the Canada and Mexico synthetic opioid/fentanyl tariffs, and the steel and aluminum tariffs. The steel and aluminum tariffs will continue to stack with each other, but not with the automotive/auto parts tariffs and the Canada and Mexico synthetic opioid/fentanyl tariffs. See Update of April 30, 2025.

Conclusions

  1. Non-USMCA, fully assembled passenger vehicles and light trucks imported into the United States are subject to Section 232 25% tariffs (i.e., not assembled at the final stage in the U.S). 
    • These automobiles are not subject to the IEEPA Canada and Mexico synthetic opioid/fentanyl tariffs, the 25% Section 232 steel or aluminum tariffs nor the 10% baseline reciprocal tariffs.
  2. USMCA-certified passenger vehicles and light trucks that are not assembled at the final stage in the U.S. are subject to 25% tariffs on non-U.S. content once certified by the Secretary of Commerce.
    • These automobiles are not subject to the IEEPA Canada and Mexico synthetic opioid/fentanyl tariffs, the 25% Section 232 steel or aluminum tariffs nor the 10% baseline reciprocal tariffs.
  3. Passenger Vehicles and Light Trucks that are assembled at the final stage in the U.S. may use the import adjustment offset for in-scope automobile parts.
    • OEMs can claim import adjustment offset amounts equal to 3.75 % in year 1 and 2.5% in year 2 of aggregated MSRP for all of the OEM’s U.S. final assembly. Such amount will be held by CBP to offset any Section 232 automotive parts tariffs.  The Department of Commerce will establish a process by May 29, 2025 in which OEMs can submit the necessary information and obtain approval for the import adjustment offset amounts.
  4. USMCA certified automotive parts used in passenger vehicles and light trucks will likely not be subject to Section 232 automotive 25% tariffs in years 1 and 2, but this has yet to be clearly confirmed.
    • Caution should be warranted regarding USMCA certified automotive parts and the 25% Section 232 steel or aluminum tariffs or the 10% baseline reciprocal tariffs, as it has not yet been clarified how USMCA certification interacts with the “Stacking EO.” The issue is whether a good subject to duty, but having an exemption such as USMCA and accordingly paying 0% duty, is further exempted from the other “Stacking EO” tariffs. 
  5. Non-USMCA certified in-scope automotive parts used in passenger vehicles and light trucks that are not used in automobiles assembled at the final stage in the United States are subject to Section 232 25% tariffs on the full value of the automobile part with no import adjustment offset.
    • Due to the “Stacking EO,” these parts are not subject to additional IEEPA Canada and Mexico synthetic opioid/fentanyl tariffs, the 25% Section 232 steel or aluminum tariffs nor the 10% baseline reciprocal tariffs.

On April 29, 2025, President Donald Trump issued an Executive Order (EO) clarifying that each of the tariffs he has imposed pursuant to the International Emergency Economic Powers Act (IEEPA) and Section 232 of the Trade Expansion Act of 1962, serve separate and distinct policy purposes, but should “not all have a cumulative effect (or ‘stack’ on top of one another)” to the extent that they apply to the same imported article.  Stating that the rate of duty resulting from stacking “exceeds what is necessary to achieve the intended policy goals,” the EO sets out the procedure for determining which tariffs will apply to an article when that article is subject to more than one tariff action.

The EO addresses the following tariffs:

  • the 25% Section 232 tariffs on imports of automobiles and certain auto parts into the United States;
  • the 25% IEEPA tariffs on Canada and Mexico to address the flow of synthetic opioids/fentanyl into the United States;
  • the 25% Section 232 tariffs on imports of steel articles into the United States; and
  • the 25% Section 232 tariffs on imports of aluminum articles into the United States.

The EO states that:

  • Items subject to the Section 232 automobile and auto part tariffs, will not be subject to the other listed tariffs. 
  • Items subject to the IEEPA tariffs on Canada or Mexico will not be subject to the Section 232 tariffs on imports of aluminum or steel articles.
  • Items subject to the aluminum or steel tariffs may be subject to both aluminum and steel tariffs if the article satisfies all conditions necessary for application of those additional tariffs. 

The action provides relief to companies that faced the potential stacking of the automotive/auto parts tariffs, the Canada and Mexico synthetic opioid/fentanyl tariffs, and the steel and aluminum tariffs.  The steel and aluminum tariffs will continue to stack with each other, but not with the automotive/auto parts tariffs and the Canada and Mexico synthetic opioid/fentanyl tariffs.  As between these four classes of tariffs, there is an open question as to whether the “subject to tariffs” language in Section 3 of the EO means tariffs as applied prior to any exemption such as the United States Mexico Canada Agreement (USMCA) exemption provided in the Canada and Mexico synthetic opioid/fentanyl tariffs.  Specifically, articles of Canada and Mexico are subject to IEEPA tariffs, but are exempt from such tariffs if the articles may be USMCA certified (see Update of March 6, 2025).  As those articles would have a no duty pursuant to IEEPA, the question remain as to whether they would still be subject to duty under the 25% Section 232 automotive/auto parts tariffs or steel or aluminum tariffs, if applicable (see Update of March 12, 2025 (25% Section 232 tariffs on steel and aluminum) and Update of March 27, 2025 (25% Section 232 tariffs on automotive/auto parts)).  The spirit of the EO suggests that one of the tariffs would be paid by the importer of record—i.e., there is not a blanket exemption via USMCA.  Guidance is required from the relevant agencies.

However, the EO clearly indicates that the synthetic opioid/fentanyl tariffs imposed against articles of China under IEEPA are still subject to stacking.  Additionally, if an imported article is subject to both a tariff action listed above and one not listed, then the different tariffs will continue to be cumulative. However, articles subject to the above tariffs are expressly exempted from the 10% “baseline” reciprocal tariffs (see Update of April 10, 2025).  In addition, an imported article that is subject to tariffs listed above “may still be subject to other applicable duties, taxes, fees, exactions, and charges” such as the Section 301 tariffs imposed against China during the first Trump Administration and continued under President Biden and any antidumping and countervailing duties (see Update of September 16, 2024).  Of key importance, the effect of this EO is retroactive for all entries of articles made on or after March 4, 2025, and importers may request refunds.

It is expected that Customs and Border Patrol (CBP) will be issuing clarifying information and guidance shortly via its Cargo Systems Messaging Service (CSMS).

On April 22, 2025, the Department of Commerce (Commerce) announced that, pursuant to Section 232 of the Trade Expansion Act of 1962, it was initiating an investigation to determine the effects on the national security of imports of medium-duty trucks, heavy-duty trucks, medium- and heavy-duty truck parts, and their derivative products.

The Federal Register notice defines the term “medium-duty trucks” as trucks with a gross vehicle weight of more than 10,000 and under 26,001 pounds. The term “heavy-duty trucks” means trucks with a gross vehicle weight rating of 26,001 pounds or more. For this investigation, trucks are motor vehicles for the transport of goods. The term “medium- and heavy-duty truck parts” refers to the individual components and systems of medium- and heavy-duty trucks, including engines and engine parts, transmissions and powertrain parts, and electrical components.

Interested parties may submit written comments, data, analyses, or other information to the Office of Strategic Industries and Economic Security at Commerce’s Bureau of Industry and Security (BIS) no later than May 16, 2025. BIS is interested in comments and information covering: (i) the current and projected demand for trucks and truck parts in the United States; (ii) the extent to which domestic production of trucks and truck parts can meet domestic demand; (iii) the role of foreign supply chains, particularly of major exporters, in meeting U.S. demand; (iv) the concentration of U.S. imports of trucks and truck parts from a small number of suppliers and the associated risks; (v) the impact of foreign government subsidies and predatory trade practices on U.S. industry; (vi) the economic impact of artificially suppressed prices of trucks and truck parts due to foreign unfair trade practices and state-sponsored overproduction; (vii) the potential for export restrictions by foreign nations, including the ability of foreign nations to weaponize their control over supplies of trucks and truck parts; (viii) the feasibility of increasing domestic capacity to reduce import reliance; (ix) the impact of current trade policies on domestic production of trucks and truck parts, and whether additional measures, including tariffs or quotas, are necessary to protect national security; and (x) any other relevant factors.

Comments must be submitted via the federal rulemaking portal at: www.regulations.gov, under Docket No. BIS-2025-0024. Submitters are direct to refer to XRIN 0694-XC125 in all comments.

On April 17, 2025, the Office of the U.S. Trade Representative (USTR) announced targeted actions “to restore American shipbuilding” after its determination that China was implementing “unreasonable acts, policies, and practices to dominate the maritime, logistics, and shipbuilding sectors.” Although the specific details of the targeted actions differ from USTR’s proposed actions (see Update of February 26, 2025), the targeted actions remain largely consistent with the USTR’s proposals. Unlike the proposals, however, the targeted actions propose additional duties on Ship-to-Shore (STS) cranes and cargo handling equipment from China.

According to the Federal Register notice, certain Chinese vessels will soon incur a service fee that increases over five phases:


Phase		Service Fee on
Vessel Operators and Vessel Owners of China
(see Annex I)		Service Fee on
Vessel Operators of Chinese-Built Vessels
(see Annex II)
Phase I
(April 17–Oct. 13, 2025)
$0		Either $0 per net ton for the arriving vessel or $0 for each container discharged
Phase II
(Oct. 14, 2025–April 16, 2026)		$50 per net ton for the arriving vesselEither $18 per net ton for the arriving vessel or $120 for each container discharged
Phase III
(April 17, 2026–April 16, 2027)		$80 per net ton for the arriving vesselEither $23 per net ton for the arriving vessel or $153 for each container discharged
Phase IV
(April 17, 2027–April 16, 2028)		$110 per net ton for the arriving vesselEither $28 per net ton for the arriving vessel or $195 for each container discharged
Phase V
(April 17, 2028–onwards)		$140 per net ton for the arriving vesselEither $33 per net ton for the arriving vessel or $250 for each container discharged

To promote U.S.-built vessels, the Federal Register notice includes a new “Service Fee on Vessel Operators of Foreign-Built Vehicle Carriers” (see Annex III). Like the service fees on Chinese vessels, this service fee does not take effect until October 14, 2025, when a fee of $150 per Car Equivalent Unit (CEU) capacity will be assessed on each entering non-U.S.-built vessel.

To “promote the transport of U.S. goods on U.S. vessels,” the USTR will also require that a certain percentage of liquified natural gas (LNG) exports to the United States be transported exclusively on U.S. vessels, but this requirement does not begin until April 17, 2028 (see Annex IV). The requirement starts at 1% but gradually increases to 15% by April 17, 2047.

Request for Public Comments on Proposed Additional Duties

Consistent with Executive Order 14269 of April 9, 2025 (“Restoring America’s Maritime Dominance”), the Federal Register notice proposes additional duties on STS cranes and cargo handling equipment of China to 100% (see Annex V). For all these proposed tariff actions, the USTR is requesting public comments from interested parties. Any comments must be submitted no later than May 19, 2025, via the USTR’s electronic portal: https://comments.ustr.gov/s/. The docket number for written comments is USTR–2025–0008.

On May 19, 2025—the same day public comments are due—the USTR will hold a public hearing on the proposed tariff actions in the main hearing room of the U.S. International Trade Commission. Any request to appear at this hearing must be submitted no later than May 8, 2025, via the same USTR portal under docket number USTR–2025–0009. Requests to appear must include a summary of testimony and may be accompanied by a pre-hearing submission. Remarks at the hearing are limited to five minutes.

Background of the Section 301 Investigation

The USTR’s targeted actions follow a year-long Section 301 investigation that concluded China’s behavior was “actionable” (see Update of January 17, 2025). Section 301 allows the United States to respond to unreasonable or discriminatory foreign government practices that burden or restrict U.S. commerce. For additional background on the Section 301 investigation, see Bulletin of April 23, 2024 and Update of April 17, 2024 (detailing the initiation of the Section 301 investigation), and Update of March 13, 2024 (detailing the petition filed requesting the Section 301 investigation).

On April 15, 2025, President Donald Trump issued an Executive Order (EO) directing the Department of Commerce (Commerce) to initiate an investigation under Section 232 of the Trade Expansion Act of 1962 to determine the effects on national security of imports of processed critical minerals and their derivative products. Because “processed critical minerals and their derivative products face significant global supply chain vulnerabilities and market distortions due to reliance on a small number of foreign suppliers”, President Trump stated, “the dependence of the United States on imports and the vulnerability of our supply chains raises the potential for risks to national security, defense readiness, price stability, and economic prosperity and resilience.” 

The EO defines the term “critical minerals” as those minerals included in the “Critical Minerals List” published by the United States Geological Survey (USGS), which also includes uranium. The term “rare earth elements” means the 17 elements identified as rare earth elements by the Department of Energy (DOE) in the April 2020 publication, “Critical Materials Rare Earths Supply Chain.” The EO also defines the scope of the terms “processed critical minerals” and “derivative products.”

According to the EO, Commerce must assess: (i) U.S. imports of all processed critical minerals and derivative products incorporating such processed critical minerals; (ii) the foreign sources by percent and volume of all processed critical mineral imports and derivative product imports, the specific types of risks that may be associated with each source by country, and those source countries deemed to be of significant risk; (iii) the distortive effects of the predatory economic, pricing, and market manipulation strategies and practices used by countries that process critical minerals exported to the United States, including the distortive effects on domestic investment and the viability of U.S. production, as well as how such strategies and practices permit such countries to maintain their control over the critical minerals processing sector and distort U.S. market prices for derivative products; (iv) the demand for processed critical minerals by manufacturers of derivative products in the United States and globally, including the extent to which such manufacturers’ demand for processed critical minerals originates from certain countries; (v) global supply chains for processed critical minerals and their derivative products; (vi) the current and potential capabilities of the United States to process critical minerals and their derivative products; and (vii) the dollar value of the current level of imports of all processed critical minerals and derivative products by total value and country of export.

Within 90 days, Commerce must submit a draft interim report, with a final report and recommendations to be submitted to President Trump within 180 days. The Secretary of Commerce must consider the following recommendations: (i) the imposition of tariffs; (ii) safeguard measures to avoid circumvention; (iii) policies to incentivize domestic production; and (iv) any additional measures that may be warranted to mitigate U.S. national security risks. Should President Trump decide to impose tariffs, a White House Fact Sheet notes, “any resulting tariff rate imposed under Section 232 would take the place of the current reciprocal tariff rate,” implemented under President Trump’s April 2, 2025 EO.

On April 1, 2025, it was announced that the Department of Commerce had initiated an investigation under Section 232 of the Trade Expansion Act of 1962 to determine the effects on the national security of imports of semiconductors and semiconductor manufacturing equipment (SME), and their derivative products. This includes, among other things, semiconductor substrates and bare wafers, legacy chips, leading-edge chips, microelectronics, and SME components. Derivative products include downstream products that contain semiconductors, such as those that make up the electronics supply chain. Commerce’s Bureau of Industry and Security (BIS) recently issued a Federal Register notice announcing that interested parties may submit written comments, data or other information pertinent to these investigations. Comments are due no later than May 7, 2025.

BIS is particularly interested in comments addressing: (i) the current and projected demand for semiconductors (including as embedded in downstream products) and SME in the United States; (ii) the extent to which domestic production of semiconductors can or is expected to be able to meet domestic demand at each node size for each product type, and similarly the extent to which domestic production of SME can or is expected to be able to meet domestic demand; (iii) the role of foreign fabrication and assembly, test and packaging facilities in meeting U.S. semiconductor demand, and similarly the role of foreign supply of SME in meeting domestic demand; (iv) the concentration of U.S. semiconductor imports (including as embedded in downstream products) from a small number of fabrication facilities and the associated risks, and similarly the concentration of U.S. SME imports from a small number of foreign sources; (v) the impact of foreign government subsidies and predatory trade practices on U.S. semiconductor and SME industry competitiveness; (vi) the economic or financial impact of artificially suppressed semiconductor and SME prices due to foreign unfair trade practices and state-sponsored overcapacity; (vii) the potential for export restrictions by foreign nations, including the ability of foreign nations to weaponize their control over semiconductors and SME supply chains; (viii) the feasibility of increasing domestic semiconductor capacity (in different product types and node sizes) to reduce import reliance, and similarly the feasibility of increasing domestic SME capacity to reduce import reliance; (ix) the impact of current trade and other policies on domestic semiconductor and SME production and capacity, and whether additional measures, including tariffs or quotas, are necessary to protect national security; (x) what product types and node sizes could be built only using SME from U.S. companies; (xi) what SME is manufactured abroad and faces limited competition from U.S.-made products; (xii) what SME parts or components are only available outside the United States; (xiii) where the U.S. workforce faces a talent gap in production of semiconductors, SME or SME components; and (xiv) any other relevant factors.

Comments must be submitted at: www.regulations.gov. The Docket ID no. for this notice is BIS-2025-0021, and submitters must refer to XRIN 0694– XC121 in all comments.

On April 1, 2025, it was announced that the Department of Commerce had initiated an investigation under Section 232 of the Trade Expansion Act of 1962 to determine the effects on the national security of pharmaceuticals and pharmaceutical ingredients and their derivative products. This includes both finished generic and non-generic drug products, medical countermeasures, critical inputs such as active pharmaceutical ingredients and key starting materials, and derivative products of those items. Commerce’s Bureau of Industry and Security (BIS) has recently issued a Federal Register notice announcing that interested parties may submit written comments, data or other information pertinent to these investigations. Comments are due no later than May 7, 2025.

BIS is particularly interested in comments addressing: (i) the current and projected demand for pharmaceuticals and pharmaceutical ingredients in the United States; (ii) the extent to which domestic production of pharmaceuticals and pharmaceutical ingredients can meet domestic demand; (iii) the role of foreign supply chains, particularly of major exporters, in meeting U.S. demand for pharmaceuticals and pharmaceutical ingredients; (iv) the concentration of U.S. imports of pharmaceuticals and pharmaceutical ingredients from a small number of suppliers and the associated risks; (v) the impact of foreign government subsidies and predatory trade practices on the competitiveness of the U.S. pharmaceuticals industry; (vi) the economic impact of artificially suppressed prices of pharmaceuticals and pharmaceutical ingredients due to foreign unfair trade practices and state-sponsored overproduction; (vii) the potential for export restrictions by foreign nations, including the ability of foreign nations to weaponize their control over pharmaceuticals supplies; (viii) the feasibility of increasing domestic capacity for pharmaceuticals and pharmaceutical ingredients to reduce import reliance; (ix) the impact of current trade policies on domestic production of pharmaceuticals and pharmaceutical ingredients, and whether additional measures, including tariffs or quotas, are necessary to protect national security; and (x) any other relevant factors.

Comments must be submitted at: www.regulations.gov. The Docket ID no. for this notice is BIS-2025-0022, and submitters must refer to XRIN 0694– XC120 in all comments.

On April 11, 2025, President Donald Trump issued a Presidential Memorandum providing clarification of allowable exceptions under Executive Order 14257 of April 2, 2025 (i.e., implementation of reciprocal tariffs). The memorandum clarifies that one excepted product is the importation into the United States of “semiconductors.” The memo proceeds to define this term as including products classified in various headings and subheadings of Chapters 84 and 85 of the Harmonized Tariff Schedule of the United States (HTSUS). It should be noted that the HTSUS codes included allow for a broad definition of the term “semiconductors.” While various semiconductor devices and electronic integrated circuits are included in the exclusion under HTSUS subheadings 8541 and 8542, the term also covers HTSUS subheadings that include, among other items, smartphones, solid-state non-volatile storage devices, flat panel display modules, and other monitors.

U.S. Customs and Border Protection (CBP) subsequently issued a message via Cargo Systems Messaging Service (see CSMS # 64724565) confirming this exclusion and noted that for products classified under the 20 specific HTSUS headings, importers should report the secondary classification under heading 9903.01.32 to declare the exception from the reciprocal tariff provided in heading 9903.01.25, headings 9903.01.43 – 9903.01.62 or 9903.01.64 – 9903.01.76 on April 9, 2025, or heading 9903.01.63 since April 9, 2025. It also notes that for such products entered on or after April 5, 2025, importers should take action to correct any filing entries, and that refunds may be requested by filing necessary refund requests or protests.

For additional background on the reciprocal tariffs, see Thompson Hine Updates of April 3, 2025 and April 10, 2025.

On April 9, 2025, President Donald Trump issued an Executive Order (EO) announcing that he was pausing the country-specific reciprocal tariffs and, instead, leaving in place for 90 days the baseline 10% tariffs on all countries that was implemented on April 5, 2025. The President, however, noted that this pause would not apply to imports of goods from China and, effective on April 10, 2025, such goods would be subject to an additional ad valorem duty rate of 125%. The suspension of the higher country-specific duty rates will remain in effect until July 9, 2025.

U.S. Customs and Border Protection (CBP) later confirmed these actions in a Cargo Systems Messaging Service (CSMS) announcement. CSMS # 64701128 states that:

  • The country-specific rates that became effective on April 9, 2025 are suspended.
  • Imported products of any country, except for China, including products of Hong Kong and Macau, other than those that fall within the identified exceptions included in CSMS # 64680374, entered for consumption, or withdrawn from warehouse for consumption on or after 12:01 a.m. ET on April 10, 2025, are subject to the following Harmonized Tariff Schedule of the United States (HTSUS) classification and additional ad valorem duty rate:
    • 9903.01.25: Articles the product of any country, except for products described in headings 9903.01.26-9903.01.33, and except as provided for in heading 9903.01.34, and except for articles the product of China, including products of Hong Kong and Macau, will be assessed an additional ad valorem duty rate of 10%.
  • Imported products of China, including products of Hong Kong and Macau, other than those that fall within the identified exceptions included in CSMS # 64680374, entered for consumption, or withdrawn from warehouse for consumption on or after 12:01 a.m. ET on April 10, 2025, are subject to the following HTSUS classification and additional ad valorem duty rate:
    • 9903.01.63: Articles the product of China, including products of Hong Kong and Macau, will be assessed an additional ad valorem rate of duty of 125%.

The President also again revised upward the additional duty rates that will apply to de minimis shipments of products from China. Accordingly, the April 9, 2025 EO dictates that all postal items sent to the United States from China and Hong Kong through the international post that qualify for the de minimis exemption will be now be subject to submitting duties to CBP in one of two manners:

  • An ad valorem duty of 120% of the value of the postal item; or,
  • A specific duty “per postal item containing goods” of $100 between May 2 through May 31, 2025, and $200 beginning June 1, 2025.

For additional background and detail on these tariffs, see Thompson Hine Updates of April 3, 2025, April 8, 2025 and April 9, 2025.

On April 8, 2025, President Donald Trump issued a new Executive Order (EO) to address China’s retaliatory 34 percent tariff it is scheduled to impose on all goods imported into China originating from the United States beginning on April 10, 2025. The President has stated that effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on April 9, 2025, the reciprocal tariff on imports from China shall increase from 34% to 84%. U.S. Customs and Border Protection (CBP) confirmed this tariff rate increase in a Cargo Systems Messaging Service later in the evening. See CSMS # 64687696.

As a result of this reciprocal tariff rate increase, and the previous tariff rate of 20% on all goods coming from China due to President Trump’s February EO to address the synthetic opioid supply chain in China (see Thompson Hine Update of March 3, 2025), the effective overall duty rate on imports from China will now be 104%.

Further, and to ensure that these duties are not circumvented, the EO also modifies an earlier order addressing the application of tariffs on goods entering the United States from China under the “de minimis” rule pursuant to Section 321 of the Tariff Act of 1930; an exemption allowing imports valued at $800 or less to enter the United States with minimal filing requirements and duty-free. Accordingly, the new April 8 EO dictates that all postal items sent to the United States from China and Hong Kong through the international post that qualify for the de minimis exemption will be now be subject to submitting duties to CBP in one of two manners:

  • An ad valorem duty of 90% of the value of the postal item; or,
  • A specific duty “per postal item containing goods” of $75 between May 2 through May 31, 2025, and $150 beginning June 1, 2025.

For additional background on the previous EOs, see Thompson Hine Updates of April 3, 2025 (de minimis)and April 3, 2025 (reciprocal tariffs).