On April 2, 2025, the U.S. Customs and Border Protection (CBP) issued a press release announcing that it had issued a Withhold Release Order (WRO) for imports of sea salt products from Taepyung Salt Farm, a South Korean company, “based on information that reasonably indicates the use of forced labor.” The WRO is effective immediately and CBP personnel at all U.S. ports of entry will detain sea salt products sourced from Taepyung Salt Farm.

The CBP’s press release notes that, during the course of the investigation, the agency identified the following International Labour Organization forced labor indicators: abuse of vulnerability, deception, restriction of movement, retention of identity documents, abusive living and working conditions, intimidation and threats, physical violence, debt bondage, withholding of wages, and excessive overtime. 

With the issuance of this WRO, CBP currently oversees and enforces 52 WROs and nine Findings.

On April 3, 2025, the Department of Commerce’s Bureau of Industry and Security (BIS) released its quarterly update to the Boycott Requester List. This list notifies companies, financial institutions, freight forwarders, individuals, and other U.S. persons of potential sources of certain boycott-related requests they may receive during the regular course of business. This resource is a public list of entities identified as making boycott-related requests in reports received by the BIS and follows the BIS July 2023 policy memo implementing efforts to enhance enforcement and compliance with U.S. antiboycott regulations. See Thompson Hine Update of July 28, 2023. The updated list can also be downloaded in Excel format from the BIS Office of Antiboycott Compliance website. 

The updated list adds 30 foreign companies that have made boycott-related requests, and BIS has removed 18 companies from the previous version of the list. A list of those removed is available here. A party’s inclusion on the Boycott Requester List does not mean that U.S. persons are restricted from dealing with the listed party. However, a party’s inclusion puts U.S. persons on notice that the listed party is more likely to make reportable boycott-related requests. BIS encourages U.S. persons to review transaction documents from all sources, especially those involving these listed parties, to identify possible boycott-related language and to determine whether there is any reporting requirement.

On April 2, 2025, President Donald Trump signed an Executive Order (EO) that excludes goods from China (including products of Hong Kong) from entering the United States duty-free under the de minimis exception beginning May 2, 2025. Section 321 of the Tariff Act of 1930, commonly referred to as the “de minimis” rule refers to the exemption allowing imports valued at $800 or less to enter the United States with minimal filing requirements and duty-free “to avoid [the] expense and inconvenience to the Government disproportionate to the amount of revenue that would otherwise be collected.” This action was previously announced but delayed until such time as U.S. Customs and Border Protection (CBP) certified to the Secretary of Commerce that it was ready to handle the increase processing of goods otherwise subject to the Section 321. (See Thompson Hine Updates of February 3, 2025 and February 5, 2025). The EO provides that adequate systems are now in place to process and collect tariff revenue for covered goods from China otherwise eligible for duty-free de minimis treatment. Accordingly, such goods from China sent through means other than the international postal network will now have to be entered “under another appropriate entry type” provided by CBP. Such imports will be subject to all applicable duties, which shall be paid in accordance with applicable entry and payment procedures.

All postal items sent to the United States through the international post that qualify for the de minimis exemption will be subject to submitting duties to CBP in one of two manners:

  • An ad valorem duty of 30% of the value of the postal item; or,
  • A specific duty “per postal item containing goods” of $25 between May 2 through May 31, 2025, and $50 beginning June 1, 2025.

All carriers that transport international postal items in this manner that contain goods from China or Hong Kong, must have an international carrier bond to ensure payment of the duty.

CBP may also require formal entry for any international postal package. If so required, then the above duty rates would not apply and the imports would be subject to “all applicable duties, taxes, and fees.” Thus, as applicable, previously implemented tariffs under the China IEEPA synthetic opioid tariff EO, various AD/CVD tariffs on China, Section 301 tariffs, or the recent “reciprocal” tariff on China could apply. (See for example, Thompson Hine Updates of April 3, 2025 and March 4, 2025).

The EO stipulates that the Secretary of Commerce is to submit a report to the president within 90 days to relay “the impact of this order” and make any necessary recommendations “for further action.” One recommendation the report must include, is whether the EO should be extended to Macau, since it is also a special administrative region of China, in order to prevent circumvention.

UPDATED: This blog post has been updated with additional information and links upon the release of the Annexes to the Executive Order. Readers should note that the breadth and depth of this Executive Order and the implementation of these tariffs is unprecedented, thus the situation regarding interpretation and their implementation remains fluid. It is expected that the White House and other relevant agencies (including CBP) will be issuing further guidance. Thompson Hine’s International Trade practice group continues to closely monitor ongoing developments.

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On April 2, 2025, President Donald Trump announced baseline tariffs starting with 10% for all countries beginning on April 5, 2025, and as applicable, this additional duty rate shall increase up to 50% beginning on April 9, 2025 on specific countries with which the United States has the largest trade deficits or that impose non-tariff barriers on U.S. goods. Collectively, these reciprocal tariffs will remain in effect until President Trump determines the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved, or mitigated. Excluded from the scope of the reciprocal tariffs are certain goods that have been recently subject to special duties under the President’s America First Trade Policy Memorandum including those relating to fentanyl and migration, steel and aluminum, and the recently implemented automobile tariffs.

In the formal Executive Order (EO), titled “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits,” the President declared a national emergency under the International Emergency Economic Powers Act (“IEEPA”) caused “by the large and persistent trade deficit that is driven by the absence of reciprocity in our trade relationships and other harmful policies like currency manipulation and exorbitant value-added taxes (VAT) perpetuated by other countries.” The EO states that this large trade deficit is evidenced by: (i) disparate tariff rates and non-tariff barriers that make it harder for U.S. manufacturers to sell their products in foreign markets; and (ii) the economic policies of key U.S. trading partners insofar as they suppress domestic wages and consumption, and thereby demand for U.S. exports, while artificially increasing the competitiveness of their goods in global markets.

Stating that negotiations to address tariff and non-tariff trade barriers have stalled, the EO states that “[t]rading partners have repeatedly blocked multilateral and plurilateral solutions,” and “the persistent decline in U.S. manufacturing output has reduced U.S. manufacturing capacity” thereby compromising U.S. economic and national security. Due to these continuing issues with trading partners, the President determined it was necessary to impose an additional ad valorem duty on all imports from all trading partners.

The 10% Baseline Reciprocal Tariff

A 10% baseline reciprocal tariff will be implemented under this IEEPA emergency authority on imports from all trading partners on goods (except those excluded from the scope of the EO, as provided below) entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. EDT on April 5, 2025. Goods loaded onto a vessel at the port of loading and in transit on the final mode of transit before that date and time will not be subject to the additional duty.

Country-Specific Reciprocal Tariffs

Beginning at 12:01 a.m. EDT on April 9, 2025, all articles from trading partners identified in Annex I to the EO imported into the customs territory of the United States will be subject to the country-specific ad valorem rates of duty specified in the chart. Guidance from the White House has indicated that these higher country-specific tariffs will be inclusive of the “new” 10% reciprocal tariffs (i.e., the importer of record will pay the higher duty rate only as opposed to a cumulative 10% + the country specific rate). Goods loaded onto a vessel at the port of loading and in transit on the final mode of transit before that date and time, will not be subject to such additional duty.

The EO provides that the 10% base reciprocal and country-specific tariff rates “shall apply only to the non-U.S. content of a subject article, provided at least 20 percent of the value of the subject article is U.S. originating.” As a result, importers should determine what goods have at least 20% of the value as U.S. originating, defined as “produced entirely” or “substantially transformed” in the United States. The EO also uses “substantially finished” terminology and it is anticipated that further guidance may resolve whether substantially “finished” remains a lesser standard than “transformed.” Importers that meet the 20% U.S. valuation threshold may mitigate the impact of these tariffs by paying the reciprocal tariffs on only the non-originating content (i.e., less than 80% of the value).

Key Factors of the EO

The EO contains detailed provisions as to what goods will and will not be subject to these additional tariffs. Thompson Hine intends to issue further posts on certain key aspects of the EO, however, in the interim, the following brief summaries are provided.

  • The EO includes a modification provision (i) allowing President Trump to increase the tariffs if trading partners retaliate or, (ii) decrease the tariffs if trading partners act to remedy non-reciprocal trade arrangements and align with the United States on economic and national security matters. As a result, the EO invites countries to negotiate with the United States to resolve these tariffs, a point emphasized by the President during his Rose Garden statement regarding the EO.
  • A number of goods are expressly excluded from the scope of the reciprocal tariffs including goods subject to the recently imposed IEEPA tariffs on Canada and Mexico and a series of current and future tariffs imposed pursuant to Section 232 of the Trade Expansion Act of 1962. With the exception of the fentanyl/migration IEEPA tariffs imposed on China, the result is that the “status quo” tariffs environment remains for these goods recently subjected to tariffs under the Trump Administration (including the automotive and automobile tariffs entering into effect on April 3, 2025) and the “new” reciprocal tariffs will not “stack” on those tariffs. However, the reciprocal tariffs are cumulative with any general or other special duty such as Section 301 (i.e., the “original” China tariffs) and antidumping/countervailing duties. Specifically, excluded from the scope of the reciprocal tariffs are the following: 
    • The existing fentanyl/migration IEEPA tariffs imposed on Canada and Mexico, (see Thompson Hine Updates of March 4, 2025 and March 6, 2025) and the reciprocal tariffs will not “stack” on those recent tariffs. Thus, USMCA originating goods will continue to enter the U.S. under “preferential terms.” Non-USMCA goods will continue to be subject to a 25% tariff under the fentanyl/migration IEEPA EOs, and non-USMCA originating “energy and energy resources” and potash will continue to face a 10% tariff. See further details below on Canada and Mexico.
    • All goods as set forth in Annex II of the EO, classified by the 8-digit Harmonized Tariff Schedule of the United States (HTSUS), are not subject to these additional duties. This includes:
      • Articles and derivatives of steel and aluminum subject to the duties imposed pursuant to Section 232 of the Trade Expansion Act of 1962 (see Thompson Hine Update of March 12, 2025).
      • Automobiles and automobile parts subject to the additional duties imposed pursuant to Section 232 of the Trade Expansion Act of 1962 (see Thompson Hine Update of March 27, 2025). The Trump Administration separately released the Annex of specific automobile and automobile parts under this Section 232 Automobile EO immediately prior to the reciprocal tariff announcement. 
      • Other products that will be likely subject to Section 232 of the Trade Expansion Act of 1962 or other trade actions including copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products.
    • All articles that may become subject to duties pursuant to future actions under Section 232 of the Trade Expansion Act of 1962 are not subject to these additional reciprocal tariffs.
    • All articles from a trading partner subject to the rates set forth in Column 2 (i.e., Belarus, Cuba, North Korea, and Russia) of the HTSUS are not subject to these additional reciprocal tariffs. Interestingly, Annex I also does not include Iran for any reciprocal tariffs, even though trade with this country is minimal.
  • All articles subject to 50 U.S.C. § 1702(b) (i.e., postal and personal communications, donations such as food, clothing and medicine to relieve human suffering, informational materials, and items ordinarily incident to personal travel to or from any country) are excluded from the scope of the reciprocal tariffs.
  • With limited exceptions, set forth in the EO, the rates of duty established by the EO are in addition to any other duties, fees, taxes, exactions, or charges applicable to such imported articles (e.g., general duties and AD/CVD).
  • Any goods entering foreign-trade zones (FTZs) on or after April 9, 2025, must enter under “privileged foreign status” unless otherwise eligible to enter under “domestic status.”
  • Duty-free de minimis treatment under 19 U.S.C. §1321, which largely exempts certain customs requirements for shipments under $800, will remain available for imports of impacted goods until notification by the Secretary of Commerce to the President that adequate systems are in place to fully and expeditiously process and collect duty revenue on such low value shipments. However, the U.S. issued an Executive Order simultaneous with this reciprocal tariffs EO largely removing de minimis treatment for shipments from China and replacing with full filing requirements and payments of duties for all shipments except those through the international postal system. See Thompson Hine Update of April 3, 2025.

In order to establish the duty rates described in this EO, the HTSUS is modified as set forth in the Annex III. This annex sets forth the new HTSUS Chapter 99 (Special Classification Provisions) subheadings to be applied on April 5 and April 9, 2025, applicable to the goods covered by the scope of the EO.

The EO makes no reference to whether duty drawbacks will be available for the duties imposed under these tariffs, nor whether any product exclusion processes are being considered.

Canada and Mexico

As indicated above, the EO continues preferential treatment for USMCA goods. Specifically, USMCA originating goods receive an effective 0% special duty under the fentanyl/migration IEEPA tariffs. Similarly, USMCA certified automobile parts, as listed in the Federal Register notice dated April 2, 2025, receive an effective 0% special duty under the Section 232 automobile parts tariffs and importers of USMCA certified automobiles may elect to seek approval from the Secretary of Commerce to certify the U.S. content and only pay the applicable Section 232 25% duties on the non-originating content. (A USMCA-specific provision does not exist for the Section 232 Steel and Aluminum and Derivatives tariffs.) The reciprocal tariff EO continues the USMCA preference by effectively eliminating the reciprocal tariffs for goods produced in Canada and Mexico. As a result, importers of USMCA certified goods likely only face Section 232 Steel and Aluminum tariffs (if applicable), automobile tariffs on the non-originating content (if applicable and once approved by the Secretary of Commerce) and any other general or special “non-IEEPA” duties (e.g., AD/CVD, Section 301, if ever applicable).

The EO includes a prospective provision regarding the potential termination of the IEEPA fentanyl/migration tariffs, which currently imposes a 25% tariff on most non-USMCA originating goods (10% on certain energy-related non-USMCA originating goods from Canada). In the event termination of the IEEPA fentanyl/migration tariffs occurs, all non-USMCA goods from Canada or Mexico will be subject to a 12% reciprocal tariff rate. However, USMCA-originating goods will continue to receive an effective 0% duty rate, and not be subject to this 12% country-specific reciprocal tariff rate. Similarly, regardless of USMCA status, the reciprocal tariffs will not apply to energy, energy resources, potash nor (using a somewhat unique formula) where parts or components that qualify for USMCA status where the broader good is substantially finished in the U.S. 

Readers should note that the breadth and depth of this EO and the implementation of these tariffs is unprecedented, thus the situation regarding interpretation and their implementation remains fluid. It is expected that the White House and other relevant agencies (including CBP) will be issuing further guidance.

On April 2, 2025, the Annex to the Presidential Proclamation imposing 25% tariffs under Section 232 of the Trade Expansion Act of 1962 on imports of automobiles and certain automobile parts was released along with U.S. Customs and Border Protection (US-CBP) guidance regarding the fully assembled automobile provisions. As previously reported, see Thompson Hine Update of March 27, 2025, the tariffs will apply to final assembled automobiles, entered for consumption or withdrawn from warehouse for consumption, on or after April 3, 2025, and for automobile parts entering the United States on or after May 3, 2025. Beyond the operational guidance, the Annex provides three new elements to the Presidential Proclamation: (1) it expands the list of automobiles and automobile parts that fall within the scope of the tariffs; (2) it provides a “blanket” exemption until a process is in place to apply the tariff to the non-US content only of USMCA-originating automobile parts ; and, (3) accompanied by the launch of the reciprocal tariff plan, confirms that the Section 232 automobile and automobile parts tariffs are “decoupled” from the reciprocal tariffs (i.e., the reciprocal and automobile and automobile parts tariffs are not “stacked”). 

The 25% tariff on automobiles will cover the following Harmonized Tariff Schedule of the United States (HTSUS) subheadings: 8703.22.01, 8703.23.01, 8703.24.01, 8703.31.01, 8703.32.01, 8703.33.01, 8703.40.00, 8703.50.00, 8703.60.00, 8703.70.00, 8703.80.00, 8703.90.01, 8704.21.01, 8704.31.01, 8704.41.00, 8704.51.00, and 8704.60.00. Entries subject to these Section 232 tariffs will be filed under new Chapter 99 subheading 9903.94.01 for all entries of passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans, and cargo vans) and light trucks from all countries.

Another new HTSUS subheading – 9903.94.02 – has been established for all entries of automobiles covered in the above HTSUS codes but are not passenger vehicles and light trucks, or the “U.S. content” of passenger cars and light trucks exempt from tariffs eligible for preferential treatment under the USMCA, upon approval by the Secretary of Commerce and will be subject to 0% tariffs. New HTSUS subheading 9903.94.03 will apply 25% tariffs to the non-U.S. content for those USMCA-certified passenger vehicles and light trucks. A new duty-free HTSUS subheading – 9903.94.04 – is to be used for exempt passenger vehicles and light trucks manufactured “at least 25 years prior to the year of the date of entry from the tariffs.”

Regarding automobile parts, the Annex covers multiple HTSUS subheadings under Chapters 40, 70, 73, 83, 84, 85, 87, 90 and 94. Entries subject to these Section 232 tariffs will be filed under new Chapter 99 subheading 9903.94.05. HTSUS subheading 9903.94.06 applies to all entries of articles classifiable under these HTSUS subheadings that: (i) are eligible for special tariff treatment under the USMCA, other than automobile knock-down kits or parts compilations; or (ii) are not parts of passenger vehicles and light trucks. In contrast to USMCA-certified passenger vehicles and light trucks that remain in the scope of the tariffs for non-U.S. content, USMCA-certified automobile parts receive a full exemption from the scope of the tariffs. USMCA-certified automobile parts listed in the relevant annex receive an effective 0% special duty under Section 232; however, any other applicable duties may apply.

Automobile parts HTSUS subheadings not included in the original Section 232 report but listed on the Annex include, but are not limited to: 4009.12.0020, 4009.22.0020, 4009.32.0020, 4009.42.0020, 4011.10.10, 4011.10.50, 4011.20.10, 4012.19.40, 4012.19.80, 4012.20.60, 4013.10.0010, 4013.10.0020, 4016.99.6010, 7007.21.51, 7009.10.00, 7320.10, 7320.20.10, 8301.20.00, 8302.10.30, 8471, 8482.10.10, 8482.10.5044, 8482.10.5048, 8482.20.0020, 8482.20.0030, 8482.20.0040, 8482.20.0061, 8482.20.0070, 8482.20.0081, 8482.40.00, 8482.50.00, 8483.10.1030, 8483.10.30, 8501.32, 8501.33, 8501.34, 8501.40, 8501.5112, 8501.52, 8507.10, 8507.90.80, 8511.10.0000, 8511.80.60, 8511.90.6020, 8511.90.6040, 8512.90.60, 8512.90.70, 8519.81.20, 8537.10, 8537.20, 8539.10.0010, 8539.10.0050, 8706.00.03, 8706.00.05, 8706.00.15, 8706.00.25, 8707.10.0020, 8707.10.0040, 8707.90.5020, 8707.90.5040, 8707.90.5060, 8707.90.5080, 8708.10.30, 8708.10.60, 8708.21.00, 8708.22, 8708.29, 8708.30, 8708.40.11, 8708.40.70, 8708.40.75, 8708.50, 8708.70, 8708.80, 8708.91, 8708.93.60, 8708.93.75, 8708.94, 8708.95, 8708.99.53, 8708.99.55, 8708.99.58, 8708.99.68, 8716.90.50, 9015.10, and 9401.20.00.

These tariffs will continue in effect, “unless such actions are expressly reduced, modified, or terminated.” These ad valorem tariffs are in addition to any other duties, fees, exactions, and charges applicable to such imported automobiles and certain automobile parts articles.

On March 26, 2025, President Donald Trump issued a Proclamation imposing 25% tariffs under Section 232 of the Trade Expansion Act of 1962 on imports of automobiles and certain automobile parts, citing “a critical threat to U.S. national security.” The tariffs will apply to final assembled automobiles, entered for consumption or withdrawn from warehouse for consumption, on April 3, 2025. Tariffs on automobile parts will go into effect at a time to be specified in a forthcoming Federal Register notice, but no later than May 3, 2025 (except for USMCA-certified parts, which will not be covered until a process is established). The Proclamation notes that these tariffs will continue in effect, “unless such actions are expressly reduced, modified, or terminated.” These ad valorem tariffs are in addition to any other duties, fees, exactions, and charges applicable to such imported automobiles and certain automobile parts articles.

In announcing and implementing these additional tariffs, President Trump is relying on a Section 232 investigation, report and Secretary of Commerce findings from his first administration. On May 23, 2018, former Secretary of Commerce Wilbur Ross self-initiated a Section 232 investigation to determine the effects on the national security of imports of automobiles – including cars, SUVs, vans and light trucks – and automotive parts. Commerce issued its final report on this investigation on February 17, 2019, with a determination that imports of automobiles and certain automobile parts are “weakening our internal economy” and threaten to impair the national security. In May 2019, President Trump delayed taking any action and instead issued a proclamation directing the U.S. Trade Representative (USTR) to negotiate agreements with other countries to address this national security threat. For additional background, see Thompson Hine Updates of June 2018 and May 17, 2019. See also the redacted Section 232 report released in July 2021.

In the March 26, 2025 Proclamation, President Trump specifically references the prior investigation and its findings, noting that the USTR’s negotiations did not lead to any agreements of the type contemplated by Section 232 – and that revisions to the United States-Korea Free Trade Agreement and the United States-Mexico-Canada Agreement (USMCA), “have not yielded sufficient positive outcomes.” As a result, he has determined “that imports of automobiles and certain automobile parts continue to threaten to impair the national security of the United States and deem[s] it necessary and appropriate to impose tariffs.”

According to the new Proclamation:

  • 25% Section 232 tariffs will apply to all automobiles and automobile parts listed in the forthcoming Annex A. 
  • For automobiles that qualify for preferential tariff treatment under the USMCA, importers of such automobiles may submit documentation to the Secretary of Commerce identifying the amount of U.S. content in each model imported into the United States. “U.S. content” refers to the value of the automobile attributable to parts wholly obtained, produced entirely, or substantially transformed in the United States. The Department of Commerce may then approve such imports for an ad valorem tariff of 25% that applies only to the value of the non-U.S. content of the automobile. The non-U.S. content of the automobile will be calculated by subtracting the value of the U.S. content in an automobile from the total value of the automobile.
  • The 25% tariff will not apply to automobile parts that qualify for preferential treatment under the USMCA until such time that the Department of Commerce, in consultation with Customs and Border Protection (CBP), establishes a process to apply the tariff exclusively to the value of the non-U.S. content of such automobile parts.
  • The additional tariff does not apply to automobile knock-down kits or parts compilations.
  • Within 90 days of the issuance of this March 26, 2025 Proclamation, the Department of Commerce must establish a process for including additional automobile parts within the scope of the tariffs based upon a request of a domestic producer of an automobile or automobile parts, or an industry association representing one or more such producers, where the request establishes that imports of additional automobile parts have increased in a manner that threatens to impair the national security.
  • Any automobiles or parts entering foreign-trade zones (FTZs) on or after April 3, 2025, must enter under “privileged foreign status” unless otherwise eligible to enter under “domestic status.”
  • No duty drawback will be available for the duties imposed under these tariffs.
  • CBP will be monitoring entries for inaccurate U.S. content claims (i.e., overstating U.S. content), which, if confirmed to be inaccurate, will result in the application of the 25% tariff to the full value of the entire automobile or automobile part by model and importer, retroactive to April 3, 2025, and prospectively until corrected and verified by CBP. 

The Proclamation references an Annex, which has not yet been released, that identifies all automobile and automobile parts subject to the Section 232 25% tariffs. A separate White House Fact Sheet, indicates that the 25% tariffs will be applied to imported passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans) and light trucks, as well as key automobile parts (engines, transmissions, powertrain parts, and electrical components). Modifications to the Harmonized Tariff Schedule of the United States (HTSUS) subheadings in this Annex will be made, as necessary, by the Secretary of Commerce. Similar products were identified by their HTSUS code in the Section 232 report (p. 112). The engines, transmissions, powertrain parts and electrical components (along with body and chassis, axle, suspension system, steering system and the advanced battery) identified in the report also include most of the “core parts” designated in the USMCA Automotive Rules of Origin. The USMCA establishes a 75% regional value content for these “core parts.” The Section 232 report list, however, extends beyond USMCA core parts, including a number of electrical components such as batteries, ignitions, switches for turn signals and windshield wipers, cameras, radios, odometers, LED lamps and clocks, among others.

The Annex will provide guidance for the covered automobiles and automobile parts. Additionally, the Proclamation presents several compliance challenges that will need to be addressed in forthcoming guidance from Commerce or CBP. The Proclamation indicates that automobile parts listed in the Annex and originating under USMCA will not be subject to the Section 232 tariffs until such time as CBP determines the methodology for doing so (a similar approach was followed for the recent Section 232 steel and aluminum derivative tariffs) and no later than May 3, 2025. A plain reading of this text indicates that automobile parts listed in the Annex, but not USMCA- originating, will be subject to the 25% tariffs on the effective date, i.e., April 3, 2025, and will not have a potential delay in implementation. 

The Proclamation defines “U.S. content” as wholly obtained, produced entirely, or substantially transformed in the United States. The overwhelming majority of automobiles and automobile parts will fall within the “substantially transformed” category as these articles rarely are wholly obtained or produced entirely in the United States. However, USMCA-certified automobiles and automobile parts follow the USMCA Automotive Rules of Origin, not the general substantial transformation test. A question immediately arises if automobile producers and automobile parts manufacturers must now certify USMCA Automotive Rules of Origin and perform the substantial transformation analysis. The result may be the same based on the strict USMCA Automotive Rules of Origin; however, a similar dual-step approach has been used at the intersection of USMCA and Section 301 China tariffs and has led to mixed results. Regardless of the outcome, compliance obligations may require manufacturers to implement this dual-step approach, which typically is not already in place. 

Looking ahead, the Proclamation results in the United States achieving a U.S.-content preference outcome for automobile and automobile parts imports explicitly rejected by a USMCA dispute resolution panel (see Thompson Hine Updates of January 17, 2023). There, the United States argued that the USMCA requires vehicle producers to track the originating (North American-made) components and non-originating components in core parts all the way through the assembly process. This new U.S.-content preference would abandon the longstanding “roll-up” method used in the North American Free Trade Agreement (NAFTA), where once a component met the rules of origin – for example, at 61% North American-made regional value content – that component then would be calculated as 100% North American-made throughout the subsequent production process. Canada and Mexico objected to that approach, and a USMCA dispute resolution panel rejected the U.S. interpretation. The United States has not implemented that decision, and it remains a likely significant area of negotiation in the upcoming USMCA review process. The Proclamation accelerates and extends that interpretation by requiring manufacturers to now trace U.S. content (not just North American content) for a list of automobile parts that extend beyond core parts. While President Trump has described these Section 232 tariffs as “permanent,” it is anticipated that they will be a key part of the USMCA review.

On March 25, 2025, the Department of Commerce’s Bureau of Industry and Security (BIS) added over 80 companies to its Entity List through two Final Rules.  These are the first listings by BIS under President Donald Trump’s second term and the listings heavily focus on China.  According to BIS, these entities “have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States.”  In a press release, BIS noted that the objectives for these listings are to:

  • Restrict the Chinese Communist Party’s (CCP) ability to acquire and develop high-performance and exascale computing capabilities, as well as quantum technologies, for military applications;
  • Impede China’s development of its hypersonic weapons program;
  • Prevent entities associated with the Test Flying Academy of South Africa (TFASA) from using U.S. items to train Chinese military forces;
  • Disrupt Iran’s procurement of unmanned aerial vehicles (UAVs) and related defense items; and
  • Impair the development of unsafeguarded nuclear activities and the ballistic missile program in Pakistan.

In the first Final Rule, BIS added 12 companies under the destinations of China (11) and Taiwan (1).  These entities are being added to the Entity List due to: (i)  acquiring or attempting to acquire U.S.-origin items in support of China’s military modernization; (ii) acquiring or attempting to acquire U.S.-origin items in support of supercomputer projects for the Chinese government and/or military; or, (iii) involvement in the development of Chinese exascale supercomputers.  Each of these entities will also be subject to restrictions on foreign-produced items made with U.S. technology.  For all of these entities, a license is now required from BIS for all items subject to the Export Administration Regulations (EAR).  License applications will be reviewed under either a presumption of denial or outright policy of denial.  This rule was effective on March 25, 2025.

For the changes being made in this Final Rule, shipments of items removed from eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export, reexport, or transfer (in-country), on March 25, 2025, may proceed to that destination until April 24, 2025.   However, any such items not actually exported, reexported or transferred (in-country) before midnight, on April 24, 2025, require a license in accordance with this Final Rule.

In the second Final Rule, BIS added 70 companies under the destinations of China (42); Iran (2); Pakistan (19); South Africa (3); and the United Arab Emirates (UAE) (4). These entities are being added to the Entity List due to: (i) their contributions to Pakistan’s unsafeguarded nuclear activities; (ii) their contributions to Pakistan’s unsafeguarded nuclear activities; (iii) acquiring or attempting to acquire U.S.-origin items in support of advancing China’s quantum technology capabilities; (iv) links to or attempts to sell products to companies either on or that supply Entity List parties; (v) acquiring or attempting to acquire U.S.-origin items in support of China’s military modernization; or (vi) attempts to circumvent export controls and sanctions to divert U.S.-origin technology and equipment to Iran.  For all of these entities, a license is now required from BIS for all items subject to the Export Administration Regulations (EAR).  License applications will be reviewed under a presumption of denial.  This Final Rule is effective on March 28, 2025.

For the changes being made in this second Final Rule, shipments of items removed from eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export, reexport, or transfer (in-country), on March 28, 2025, may proceed to that destination until April 27, 2025.  However, any such items not actually exported, reexported or transferred (in-country) before midnight, on April 27, 2025, require a license in accordance with this Final Rule.

On March 24, 2025, President Donald Trump signed an Executive Order (EO) declaring that any country purchasing oil from Venezuela, “whether directly from Venezuela or indirectly through third parties,” will pay a 25% tariff on their exports to the United States.  The EO tasks the Secretary of Commerce with determining whether a country buys Venezuelan oil.

Referencing the International Emergency Economic Powers Act (IEEPA), President Trump explains in the EO that the 25% tariff is necessary to thwart “Venezuela’s ongoing destabilizing actions, including its support for illicit activities, [which] necessitate further economic measures to protect United States interests.”  According to the EO, the tariff “will be supplemental to duties on imports already imposed pursuant to IEEPA, section 232 of the Trade Expansion Act of 1962, section 301 of the Trade Act of 1964, or any other authority.”

The 25% will take effect on April 2, 2025—the same day Trump is expected to implement a variety of tariff strategies based on reports he is set to receive April 1, 2025, from various trade-adjacent departments and agencies pursuant to his “America First Trade Policy.”  (For background on the “American First Trade Policy,” see Update of January 22, 2025.)  However, “the tariff…shall expire 1 year after the last date on which the country imported Venezuelan oil, or at an earlier date if the Secretary of Commerce…so determinates[.]”

According to a 2024 report and 2023 report by Reuters, China is the largest purchaser of Venezuelan oil; other major buyers include Brazil, Colombia, Cuba, European countries, India, and Panama.  By comparison, the data show the United States is the second-largest purchaser, though the amount bought is expected to decline after the Trump administration announced the winding down of a general license permitting a major U.S. company to transact with Petróleos de Venezuela, S.A. (PdVSA), Venezuela’s state-owned oil and natural gas company (see Update of March 25, 2025).

On March 24, 2025, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela General License (GL) 41B extending the expiration date of Venezuela GL 41, which authorized certain transactions related to Chevron Corporation’s joint ventures in Venezuela.  Previously, under GL 41A issued earlier this month, all transactions “ordinarily incident and necessary to the wind down of transactions” were permissible until 12:01 a.m. EDT, April 3, 2025 (see Update of March 5, 2025).  GL 41B is identical to GL 41A but only extends all such wind down transactions until 12:01 a.m. EDT, March 27, 2025.  After that date, transactions previously authorized under GL 41 will be prohibited.

UPDATE: On March 24, 2025, Customs and Border Protection (CBP) issued a message noting the release of an updated list of impacted HTSUS codes covering “energy” and “energy resources” from Canada that are now subject to 10% tariffs since March 4, 2025. The list now specifically includes all crude and crude mixtures along with others. This post has been updated accordingly and provides a link to the current spreadsheet listing the applicable commodities and the relevant HTSUS codes.

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On March 19, 2025, U.S. Customs and Border Protection (CBP) issued guidance regarding the Harmonized Tariff Schedule of the United States (HTSUS) codes covering “energy” and “energy resources” from Canada that are now subject to 10% tariffs since March 4, 2025, pursuant to the International Emergency Economic Powers Act (IEEPA).   See Thompson Hine Updates of March 4, 2025 and March 6, 2025.  CBP’s guidance confirms that the terms “energy” and “energy resources”, as defined in Executive Order (EO) 14156 of January 20, 2025 (Declaring a National Energy Emergency), apply and expressly include “crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals, as defined by 30 U.S.C. 1606 (a)(3).”

CBP’s guidance continues to note that energy and energy resources qualifying for USMCA are not subject to the additional tariffs.  However, since the original notices regarding the scope of these definitions, numerous interpretative questions have been raised, particularly concerning the downstream scope of “natural gas liquids”, “refined petroleum products”, “biofuels” and “critical minerals.”  In response, CBP has provided a spreadsheet listing the applicable commodities and the relevant HTSUS codes. Styled Energy and Energy Resources from Canada Subject to Additional Duties Pursuant to Executive Order, the spreadsheetidentifies more than 150 critical minerals and related compounds classified under HTSUS Chapters 25-29, 32, 36 and 38.  The list also identifies more than 500 types of platinum, steel, aluminum, tin, platinum, nickel, titanium and other metal articles classified under HTSUS Chapters 71-76, 78-81 and 85.  Many of these products are used in the energy sector (e.g., pipelines) and mining sector (e.g., rails) and have been included in the recently imposed 25% Section 232 steel and aluminum tariffs. See Thompson Hine Update of March 12, 2025.

The spreadsheet includes numerous “energy” or “energy resources” line items such as “coal”, “natural gas”, “biodiesel”, “uranium” and co- or by-products such as benzene under HTSUS Chapters 27 and Chapter 28.  The CBP guidance plainly indicates that “[e]nergy or energy resources of Canada, as defined by HTSUS 9903.01.13, include, but are not limited to, goods classified under the HTSUS subheadings in the attached spreadsheet.” (Emphasis added.)  As a result, based on a plain reading of the guidance, it remains possible that additional HTSUS codes could be included in the definition of the “energy” and “energy resources”, as defined in all related Executive Orders and notices, and covered by the 10% IEEPA tariffs. 

Critical Mineral Production

As noted, CBP’s guidance also includes certain “critical minerals” under the 10% IEEPA tariffs, following the use of that term as defined in Executive Order 14156.  This would appear to be supported by the issuance of an Executive Order on March 20, 2025 by President Donald Trump addressing critical minerals, as defined by 30 U.S.C. 1606(a)(3), “as well as uranium, copper, potash, gold, and any other element, compound or material as determined by the Chair of the National Energy Dominance Council (NEDC).”  Some, but not all, of these critical minerals are included in the CBP spreadsheet. 

Pursuant to the March 20, 2025 Executive Order, President Trump stated that “[o]ur national and economic security are now acutely threatened by our reliance upon hostile foreign powers’ mineral production.  It is imperative for our national security that the United States take immediate action to facilitate domestic mineral production to the maximum possible extent.”  Under this Executive Order, the Chair of the NEDC is to identify and establish mineral production projects for expedited review and to solicit industry feedback on regulatory bottlenecks and other recommended strategies for expediting domestic mineral production.  The Secretary of the Interior has been tasked with identifying all federal lands known to hold mineral deposits and reserves and to prioritize mineral production and mining-related purposes as the primary land uses in these areas, consistent with applicable law.  The Secretaries of Agriculture, Defense, Energy and the Interior are to identify “as many sites as possible on Federal land managed by their respective agencies that may be suitable for leasing or development pursuant to 10 U.S.C. 2667, 42 U.S.C. 7256, or other applicable authorities, for the construction and operation of private commercial mineral production enterprises.”  In doing so, they are to provide a list prioritizing sites “on which mineral production projects could be fully permitted and operational as soon as possible and have the greatest potential effect on robustness of the domestic mineral supply chain.”