On June 16, 2025, the United States and the United Kingdom formally implemented the General Terms for the United States of America and the United Kingdom of Great Britain and Northern Ireland Economic Prosperity Deal (the “General Terms”). In a related Executive Order (EO), President Donald Trump set forth agreements reached with the UK regarding tariffs on imports of (i) automobiles and automobile parts; (ii) civil aircraft; and (iii) future relief on imports of aluminum and steel articles and their derivatives.

Automobiles and Automobile Parts. The EO establishes an annual tariff-rate quota of 100,000 automobiles as classified in heading 8703 of the Harmonized Tariff Schedule of the United States (HTSUS) for automobiles that are products of the United Kingdom. Imports of automobiles within the tariff-rate quota that would otherwise be subject to a 25 percent tariff will now be subject to a 7.5 percent tariff, in addition to the most-favored-nation rate for automobiles of 2.5 percent, for a combined tariff of 10 percent. Automotive parts specified in the relevant section of Chapter 99 of the HTSUS that would otherwise be subject to a 25 percent tariff will instead be subject to a total tariff of 10 percent (including any most-favored-nation tariffs), provided that they are products of the United Kingdom and are for use in automobiles that are products of the United Kingdom. 

Aerospace. For products of the United Kingdom that fall under the World Trade Organization (WTO) Agreement on Trade in Civil Aircraft, the U.S. tariffs previously imposed will no longer apply. An October 2019 ruling by a WTO arbitrator allowed the United States to take “countermeasures” and implement retaliatory tariffs due to European Union (EU) subsidies provided for large civil aircraft manufacturers. That ruling determined that the United States could take countermeasures at a level not to exceed $7.49 billion annually. For additional background on this dispute and the resulting retaliatory tariffs, see Thompson Hine Updates of October 4, 2019, December 9, 2019, February 17, 2020, August 13, 2020, October 15, 2020 and November 11, 2020. Overall, under the General Terms, both parties “committed to strengthen aerospace and aircraft manufacturing supply chains by establishing tariff-free bilateral trade in certain aerospace products.”

Aluminum and Steel Articles and Their Derivative Articles. In the General Terms, the United Kingdom has committed to working to meet U.S. requirements on the security of the supply chains of steel and aluminum products intended for export to the United States and on the nature of ownership of relevant production facilities. The EO states that at a future time deemed appropriate, the United States will establish a tariff-rate quota for aluminum articles and derivative aluminum articles that are products of the United Kingdom. Imports of aluminum articles or derivative aluminum articles that are products of the United Kingdom in excess of the established tariff-rate quota would remain subject to the Section 232 national security duties of 25 percent.

For additional background on the overall U.S.-UK General Terms, see Thompson Hine Update of May 9, 2025.

On June 12, the Office of the U.S. Trade Representative (USTR) proposed two modifications to its April 17 announcement of actions under Section 301, which are scheduled to take effect starting on October 14, 2025. The actions aim to counter China’s dominance in the maritime sector.

The first proposed modification would revise the method for calculating service fees on Chinese-owned, operated, or built vessels. The second would eliminate the USTR’s authority to suspend export licenses and expand data reporting requirements to include vessel owners and operators.

The USTR is seeking public comment on both proposed modifications.

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On June 10, 2025, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a stay keeping both tranches of President Donald Trump’s tariffs implemented under the International Emergency Economic Powers Act of 1977 (IEEPA) (50 U.S.C. § 1701 et seq.) in effect until final adjudication by the appellate court. The per curiam (i.e., unanimous) order extends the temporary stay previously issued by the CAFC on May 29, 2025, after a decision from the U.S. Court of International Trade (CIT) published the day before held that President Trump’s invocation of the IEEPA was unconstitutional and vacated the two tranches. See Update of May 29, 2025. President Trump had invoked the IEEPA to impose so-called “reciprocal” tariffs against nearly every country in the world (see Update of April 10, 2025), and specific tariffs against Canada and Mexico (see Update of March 6, 2025) and China (see Update of May 12, 2025).

In granting the U.S. government’s motion for the stay, the CAFC acknowledged that “[b]oth sides have made substantial arguments on the merits,” but “[h]aving considered the traditional stay factors…the court concludes a stay is warranted under the circumstances.” The U.S. government’s motion follows its appeal of the CIT decision, which sided with a consolidated group of plaintiffs consisting of 5 small businesses and 12 U.S. states.

Next Steps

The CAFC noted in the order that these issues were “of exceptional importance warranting expedited en banc consideration of the merits in the first instance.” As a result, all 12 CAFC judges will hear the case instead of the standard three-judge panel that presides over such appeals.

Oral argument is scheduled for July 31, 2025. A final decision from the CAFC is not expected until August at the earliest, just three weeks after the 90-day pause of President Trump’s reciprocal tariffs is currently set to expire on July 9, 2025.

President Donald Trump issued a Proclamation on June 3, 2025 increasing the previously imposed Section 232 tariffs on aluminum and steel products and their derivatives from 25% to 50%. These increased tariffs were effective June 4, 2025. The proclamation excluded products of the United Kingdom which stay at 25% until July 9, 2025.

U.S. Customs and Border Protection (CBP) issued guidance via its Cargo Systems Messaging Service (CSMS) in CSMS # 65236374 , CSMS # 65236645 and CSMS # 65236574. The Proclamation and CBP guidance make several important changes to the calculation of the tariffs and stacking of the various Section 232 and International Economic Emergency Powers Act (IEEPA) tariffs, including the use of the United States-Mexico-Canada Agreement preferences.

Tariffs on Aluminum, Steel & Derivatives

Tariffs imposed under Section 232 on aluminum, steel and their derivatives are modified to increase the respective tariff rates from an additional 25% ad valorem to an additional 50% ad valorem for products of countries other than those from the United Kingdom. An exception for Russia continues – aluminum from Russia, or products containing Russian aluminum, remain subject to a 200% tariff on the entire value.

Aluminum and Steel Content in Articles

A key change is that the 50% tariff now applies only to the value of the aluminum/steel content in all imported articles in Chapter 73 and 76 and not the entire value of the product. Previously, the value of aluminum/steel items was only separated for derivative articles outside of Chapter 73 and 76. The non-aluminum/steel portion of these articles will be subject to other applicable tariffs, such as the IEEPA reciprocal tariffs (e.g., 10%).

If the value of the steel/aluminum content is (1) the same as the entered value or (2) is unknown, the duty must be reported under the Chapter 99 classification based on the entire entered value and reported on only one entry summary line.

Where the value of the steel/aluminum content is less than the entered value of the imported article, the good must be reported on two lines. The first line will represent the non-steel content while the second line will represent the steel content. Each line should be reported in accordance with the instructions in CSMS # 65236645 and CSMS # 65236574.

Importers must report the country of melt and pour for steel, and the country of smelt and cast for aluminum, using ISO codes. Supporting documentation must be maintained. Importers must use the correct Chapter 99 HTS codes for each tariff action. CBP will strictly enforce compliance with fines and loss of import rights for violators.

Foreign-Trade Zones and Drawback

Any aluminum or steel article, or their derivatives, admitted into a U.S. foreign-trade zone (FTZ) on or after June 4, 2025, must be admitted under “privileged foreign status” and will be subject to the new tariff rates upon entry for consumption.

Any derivative steel articles previously admitted to a U.S. FTZ under “privileged foreign status,” will nevertheless be subject to the tariff rate in effect on the date of entry for consumption. For example, items of steel entered into an FTZ under privileged foreign status on June 1 when a 25% rate was in effect but later entered into the U.S. for consumption while the 50% rate is in effect, would pay the 50% rate.

No drawback is available for the duties imposed.

New Order for Stacking Tariffs

The updated guidance changes the order for calculating the stacking of tariffs. (See Thompson Hine Update of April 30, 2025 for prior guidance on stacking). The new priority order moves the Section 232 aluminum and steel tariffs above the IEEPA tariffs on Canada and Mexico relating to the border and fentanyl. The new order for stacking tariffs is:

  1. Section 232 Auto/Auto Parts – Proclamation 10908 of March 26, 2025 (Adjusting Imports of Automobiles and Automobile Parts into the United States), as amended;
  2. Section 232 Aluminum – Proclamation 9704 of March 8, 2018 (Adjusting Imports of Aluminum into the United States), as amended;
  3. Section 232 Steel – Proclamation 9705 of March 8, 2018 (Adjusting Imports of Steel into the United States), as amended;
  4. IEEPA Canada – Executive Order 14193 of February 1, 2025 (Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border), as amended;
  5. IEEPA Mexico – Executive Order 14194 of February 1, 2025 (Imposing Duties to Address the Situation at Our Southern Border), as amended.

How to Stack Tariffs in Practice

  • Determine if the product is subject to the Section 232 auto/auto parts tariff. If so, stop—no further Section 232 or IEEPA tariffs apply.
  • Check for Section 232 aluminum and/or steel tariffs. If applicable, apply the 50% (or 25% for UK) rate to the value of the aluminum and/or steel content. The non-aluminum/steel portion is subject to IEEPA reciprocal tariffs and other tariffs.
  • If the product is not subject to any of the previously-mentioned tariffs, apply the IEEPA fentanyl (Canada/Mexico) tariffs as appropriate.
  • Apply other applicable duties (e.g., IEEPA fentanyl tariffs on China, antidumping, countervailing, Section 301, Most-Favored Nation (MFN) tariffs) in addition to the previously mentioned tariffs, as these are not affected by the stacking order.

The modified tariff stacking order applies to goods entered for consumption, or withdrawn from warehouse for consumption, on or after June 4, 2025.

USMCA Exemption

The updated guidance advises that “subject to” means that duty more than 0% is owed under the tariff action. The updated guidance expressly provides:

  • “Parts of passenger vehicles and light trucks that qualify for preferential treatment under the United States-Mexico-Canada Agreement (USMCA), ARE NOT subject to the 232 Auto/Auto Parts, the IEEPA Canada, or the IEEPA Mexico tariffs.” and
  • “Articles that qualify for preferential tariff treatment under USMCA, ARE NOT subject to the IEEPA Canada or IEEPA Mexico tariffs.”

Previously, aluminum, steel and their derivative products that were subject to the IEEPA tariffs on Canada and Mexico but met USMCA certification requirements typically paid 0% duties (as the IEEPA tariffs on Canada and Mexico were before aluminum/steel in the priority order). The updated guidance now requires the importer of record (IOR) to enter the Section 232 aluminum, steel and derivative products first (after analyzing whether Section 232 auto and auto parts tariffs apply). Of potential greater impact, since the “USMCA exemption” for auto parts and IEEPA Canada/Mexico tariffs means qualifying articles do not pay any duty under those tariffs, USMCA-qualifying items will no longer be considered “subject to” those tariffs. An item that is USMCA-qualified and exempt from the Section 232 auto tariffs may pay Section 232 aluminum/steel tariffs.

All companies should review current practices regarding stacking and use of the USMCA exemption to determine the applicable tariffs. The updated guidance imposes these requirements as of June 4, 2025, and indicates that the revised stacking procedures are not retroactive.

Key Notes:

  • On May 28, the U.S. Court of International Trade (CIT) permanently enjoined tariffs imposed by President Donald Trump under the International Emergency Economic Powers Act (IEEPA), finding that he exceeded statutory and constitutional authority by imposing broad tariffs on imports from China, Canada, Mexico, and other countries.
  • The CIT held that IEEPA does not grant the president unlimited tariff authority, emphasizing that “the Constitution assigns Congress the exclusive powers to ‘lay and collect Taxes, Duties, Imposts and Excises,’ and to ‘regulate Commerce with foreign Nations’” and that “any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional.”
  • The CIT found the so-called “Trafficking Tariffs” unlawful because they did not “deal with” the specific threats identified in the Executive Orders (EOs) but instead sought to create leverage over foreign governments – a purpose not authorized by IEEPA.
  • The CIT found that the so-called “Worldwide and Retaliatory Tariffs” fail because they exceed any authority granted to the president by IEEPA to regulate importation through tariffs. 
  • The U.S. government appealed the decision, and the U.S. Court of Appeals for the Federal Circuit (CAFC) temporarily stayed the CIT’s ruling on May 29, allowing the tariffs to remain in effect while the appeal is considered.
  • The CIT’s decision does not impact existing Section 301 tariffs on China or Section 232 tariffs on steel, aluminum, autos, and related products; these remain in full effect.
  • Until further notice, importers should continue to pay all applicable tariffs, maintain detailed records, and monitor for further developments, as the legal status of the IEEPA-based tariffs remains subject to ongoing appellate review.

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On May 29, 2025, the U.S. District Court for the District of Columbia (USDC-DC) issued a preliminary injunction ruling staying the imposition of President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA). This preliminary injunction applies to tariffs that would be paid by the two named plaintiffs – Learning Resources, Inc. and hand2mind, Inc. The tariffs enjoined are those that have been implemented against Canada, China, and Mexico (IEEPA tariffs for the flow of illicit drugs distributed in the United States; see Update of February 3, 2025) and the reciprocal tariffs (IEEPA tariffs of 10% on all countries and additional duty rates on specific countries; see Update of April 3, 2025). In the opinion, Judge Rudolph Contreras stated that, “This case is not about tariffs qua tariffs. It is about whether IEEPA enables the President to unilaterally impose, revoke, pause, reinstate, and adjust tariffs to reorder the global economy. The Court agrees with Plaintiffs that it does not.”

This is the second ruling in less than a day to find that President Trump likely exceeded his authority in issuing the Executive Orders implementing these tariffs. See also Update of May 29, 2025 providing details on ruling by the U.S. Court of International Trade (CIT). In this USDC-DC opinion, several specific issues were addressed:

  1. The Court denied the government’s request to transfer the case to the CIT stating that it must look to IEEPA’s text to determine whether it is a law providing for tariffs. Noting that IEEPA does not use the words “tariffs” or “duties,” and that there is no residual clause granting the President powers beyond those expressly listed, the opinion notes that, “Every time Congress delegated the President the authority to levy duties or tariffs in Title 19 of the U.S. Code, it established express procedural, substantive, and temporal limits on that authority.” Concluding that such “comprehensive statutory limitations would be eviscerated if the President could invoke a virtually unrestricted tariffing power under IEEPA,” the Court states that because “IEEPA is not a ‘law . . . providing for tariffs,’ this Court, not the CIT, has jurisdiction over this lawsuit.”
  2. Based on this analysis, the Court found that “because IEEPA does not authorize the President to impose tariffs, the [IEEPA] tariffs … are ultra vires {i.e., ‘beyond the powers’ requiring legal authority]” and the plaintiffs are likely to succeed with their claim that President Trump in implementing them violated the Administrative Procedures Act.
  3. Because the plaintiffs established that they will likely suffer irreparable harm absent a preliminary injunction because the tariffs “pose an existential threat to their businesses,” the judge issued a temporary injunction for the two plaintiffs (small family-owned educational toy companies) indicating that such an action “will have virtually no effect on the government” and that without a preliminary injunction, “Plaintiffs will sustain significant and unrecoverable losses.” The Court has stayed operation of the preliminary injunction for 14 days to allow for an appeal.

This ruling is limited in scope to the named plaintiffs. It should also be noted that this ruling does not invalidate tariffs implemented by President Trump under Section 301 of the Trade Act of 1974 and under Section 232 of the Trade Adjustment Act of 1962. 

On May 29, 2025, the Court of Appeals for the Federal Circuit (CAFC) stayed the decision of the Court of International Trade (CIT) from the previous day, which had vacated both tranches of President Donald Trump’s tariffs implemented under the International Emergency Economic Powers Act of 1977 (IEEPA) (50 U.S.C. § 1701 et seq.). President Trump had invoked IEEPA to impose so-called “reciprocal” tariffs against nearly every country in the world (see Update of April 10, 2025) and specific tariffs against Canada, Mexico (see Update of March 6, 2025) and China (see Update of May 12, 2025). As a result of the stay, the two tranches of tariffs remain in effect pending the CAFC’s review of the motion to stay of the CIT’s judgment and injunction. The CIT’s per curiam decision, however, places the burden on the Trump administration to continue defending the position that IEEPA is a valid legal basis for the tariffs.

The CIT Decision

Heard by a three-judge panel (one Reagan appointee, one Obama appointee, and one Trump appointee), the CIT case consolidated two of seven lawsuits currently challenging IEEPA as a lawful means to impose tariffs—one filed by five small businesses and the other filed by Oregon (and joined by eleven other states). The CIT panel ultimately ruled that the challenged tariffs “exceed any authority granted to the President by IEEPA to regulate importation,” and laid out three key reasons for this conclusion.

The CIT panel grounded their decision in a structuralist interpretation of U.S. law, emphasizing that while IEEPA grants the President some authority to “regulate…importation,” the Constitution explicitly assigns the power to impose tariffs to Congress. Given “the Constitution’s express allocation of the tariff power to Congress,” the judges explained, IEEPA cannot be read “to delegate an unbounded tariff authority to the President.” Such a reading is necessary to “avoid constitutional infirmities” and reinforce the principle that Congress, not the President, holds the primary authority over tariffs.

The CIT panel considered the legislative intent behind IEEPA, which was enacted after the Watergate scandal to limit, not expand, presidential power. According to the panel, interpreting the statute now to allow broad tariff authority would undermine the rationale for why Congress passed IEEPA. The CIT panel acknowledged that President Trump’s reciprocal tariffs — which were intended to address trade imbalances, a type of balance-of-payments deficit — could potentially proceed under Section 122 of the Trade Act of 1974; this provision, however, only allows for emergency tariffs up to 15% and only for 150 days (i.e., about five months). After that time period expires, Congress must approve any extension.

The CIT panel embraced a textualist argument to address the specific tariffs imposed against Canada, Mexico, and China, which President Trump justified on the grounds that these countries were failing to “arrest, seize, detain, or otherwise intercept” drug trafficking organizations, human traffickers, and criminals at large. The CIT pointed out that any measures undertaken pursuant to IEEPA must “deal with an unusual and extraordinary threat,” but the phrase “deal with” necessitates “a direct link between an act and the problem it purports to address.” The panel found that “Customs’s collection of tariffs on lawful imports does not … relate to foreign governments’ efforts to arrest seize, detain, or otherwise intercept” bad actors.

The CIT panel concluded that “the challenged Tariff Orders are unlawful as to Plaintiffs [as] they are unlawful … to all,” and issued a nationwide injunction to halt the tariffs—marking a significant limitation on the President’s ability to use IEEPA as a tool for imposing tariffs.

Tariffs Under Other Statutes Not Affected

This CIT ruling does not invalidate or otherwise impact tariffs implemented by President Trump under Section 301 of the Trade Act of 1974 and under Section 232 of the Trade Adjustment Act of 1962.

On May 23, 2025, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Syria General License (GL) No. 25 relaxing sanctions against the Government of Syria and twenty-eight (28) previously blocked Syrian entities and persons. GL 25 authorizes transactions that would otherwise be prohibited under the U.S. economic sanctions on Syria, including new investment in Syria; the provision of financial and other services to Syria; and transactions related to Syrian-origin petroleum or petroleum products. This general license does not authorize any transactions with individuals or entities that remain on OFAC’s Specially Designated Nationals (SDN) List or the unblocking of any blocked property.

In a press release, Treasury stated that this was a “first step” in providing relief for Syria in line with President Donald Trump’s announcement for the cessation of all sanctions on Syria. OFAC has also issued a set of FAQs to provide further guidance related to GL 25.

It should be noted that this General License impacts only the Syrian Sanctions Regulations under 31 C.F.R. Part 542 and under the control of OFAC. Certain statutory export controls and restrictions currently remain in place under the control of the Department of Commerce’s Bureau of Industry and Security (BIS).

On May 16, 2025, Customs and Border Protection (CBP) issued a Notice to implement President Donald Trump’s earlier Executive Order (EO) 14289 that eliminated the “stacking” (or accumulation) of certain overlapping tariffs. These overlapping tariffs included the IEEPA tariffs on Canada and Mexico, the Section 232 automobile and automotive part tariffs, and the Section 232 steel and aluminum tariffs. For details, See Thompson Hine Update of April 30, 2025.

Importantly, the CBP Notice states that beginning on May 16, 2205, importers may request a refund of tariffs that were previously stacked in contradiction to this order. Importers may file a post summary correction (PSC) for unliquidated entries or file a protest under 19 U.S.C. 1514 for entries that have been liquidated but for which the protest period has not yet expired. 

On May 12, the U.S. Department of Justice (DOJ) issued updated policy memoranda relating to the investigation and prosecution of white collar crimes, including its White-Collar Enforcement Plan, Revised Corporate Enforcement and Voluntary Self-Disclosure Policy, Memorandum on Selection of Monitors in Criminal Division Matters, and the Criminal Division’s Corporate Whistleblower Awards Pilot Program Revisited. These memoranda should guide companies, executives, and compliance professionals in handling matters relating to their operations, compliance, reporting obligations, and potential investigations and prosecution.

This client update outlines our top five takeaways from the memoranda:

  • Trade Crimes Enforcement Is a New Major Focus
  • Waste, Fraud, and Abuse of Government Programs and Procurement Fraud Remain Top Priorities
  • Companies in International Supply Chains Face Unique Challenges
  • Corporate Self-Disclosure Requires Strict Compliance and Forthright Disclosures
  • It’s Never Too Early to Engage White Collar Counsel

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