On July 31, 2025, President Donald Trump issued an Executive Order announcing that he was modifying and implementing the reciprocal tariff first announced on April 2, 2025, to rectify trade practices that his administration has determined contribute to “large and persistent annual United States goods trade deficits.” Effective August 7, 2025, reciprocal tariffs ranging from 10% to 41% will be applied to imports from countries identified in Annex I to the Executive Order.
President Trump stated that “some trading partners have agreed to, or are on the verge of agreeing to, meaningful trade and security commitments with the United States,” while other countries “have offered terms that, in [his] judgment, do not sufficiently address imbalances in our trading relationship or have failed to align sufficiently with the United States on economic and national-security matters.”
Reciprocal Tariffs Under Annex 1. Annex I to the Executive Order provides the list of countries that are covered by the Executive Order and their adjusted reciprocal tariff rates. The duty rates range from 10% to 41%. The European Union (EU) will have two possible ad valorem tariff rates: (i) For a good of the EU with a Column 1 Duty Rate under the Harmonized Tariff Schedule of the United States (HTSUS) that is less than 15%, the sum of its Column 1 Duty Rate and the additional ad valorem duty rate established in this July 31 Executive Order will be 15%; and (ii) For a good of the EU with a Column 1 Duty Rate that is at least 15%,, the additional ad valorem duty rate will be zero.
President Trump in the Executive Order acknowledges that certain countries have agreed to, or are in the process of concluding, trade negotiations with the United States but will remain subject to the reciprocal tariff rates until such time as negotiations and agreements are concluded.
According to the July 31, 2025 Executive Order, it is not applicable to current reciprocal tariffs rates for China while negotiations with that country remain ongoing. See Thompson Hine Update of May 12, 2025 for background on China’s current reciprocal tariff rate. Canada and Mexico are also excluded from this Executive Order and will be addressed separately due to ongoing negotiations; goods, however, qualifying under the U.S.-Mexico-Canada Agreement (USMCA) are not affected by these tariffs.
Goods of any foreign trading partner that is not listed in Annex I to this Executive Order will be subject to an additional ad valorem dutyrate of 10%, unless otherwise expressly provided.
Transshipment. The Executive Order attempts to address concerns regarding possible transshipment efforts to evade these reciprocal tariff rates. Accordingly, if an article for import is determined by Customs and Border Protection (CBP) to have been transshipped, it will be subject to (i) an additional ad valorem duty rate of 40 percent, in lieu of the additional reciprocal tariff rate set forth in Annex I of the Executive Order applicable to goods of the true country of origin, (ii) any other applicable or appropriate fine or penalty, and (iii) any other U.S. duties, fees, taxes, exactions, or charges applicable to goods of the country of origin. The Executive Order states that CBP will not allow for mitigation or remission of the penalties assessed on imports found to be transshipped to evade applicable duties.
Annex II to the Executive Order provides the modified headings/subheadings under subchapter III of chapter 99 of the HTSUS that will apply to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. EDT on August 7, 2025.
Savings Clause. Goods loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. EDT August 7, 2025, and entered for consumption, or withdrawn from warehouse for consumption, before 12:01 a.m. EDT on October 5, 2025, will not be subject to these additional duty rates under the July 31, 2025 Executive Order but will remain subject to the additional reciprocal tariff rates in place before July 31.
Monitoring and Reporting. The U.S. Secretary of Commerce and the U.S. Trade Representative have been tasked with monitoring and consulting on any circumstances that “might indicate the need for further action” or that “might indicate that a foreign trading partner has taken adequate steps to address the emergency declared” in the original April 2, 2025 Executive Order announcing the reciprocal tariffs pursuant to the International Emergency Economic Powers Act (IEEPA).
For additional background on these reciprocal tariffs, see Thompson Hine updates of April 3, 2025, April 10, 2025, April, 30, 2025, and July 8, 2025. As a reminder, these tariffs have been implemented pursuant to the IEEPA and have been challenged in multiple lawsuits that remain pending.