U.S. Tariffs Update – April 14, 2025

On April 8, 2025, in response to China’s 34% retaliatory tariff announced on April 4, President Trump increased the reciprocal tariff on Chinese imports from 34% to 84%, effective 12:01 a.m. on April 9, 2025, and, at the same time, increased the ad valorem rate of duty for de minimis value shipments from 30% to 90% (along with related per postal item fees).

On April 9, 2025, in response to the United States’ updated 84% reciprocal tariff, the State Council Tariff Commission of China adjusted its retaliatory tariff on U.S. imports to 84%, effective April 10, 2025. The Ministry of Commerce of China further added 12 U.S. companies to its export control list and banned the export of dual-use items to them and added six U.S. companies to its unreliable entity list along with banning their imports and exports relating to China and any new investments in China, all of which become effective on April 10, 2025.

Earlier that same day, the State Council Information Office of China released a detailed white paper titled “China’s Position on Several Issues Regarding Sino-U.S. Economic and Trade Relations.” The Ministry of Commerce of China in that afternoon published answers to reporters’ questions regarding the white paper, including the statement that “China and the United States can resolve economic and trade differences through dialogue on an equal footing and mutually beneficial cooperation,” but also indicated that “if the United States insists on further escalating economic and trade restrictions, China has a firm will and abundant means, and will resolutely counteract and fight it to the end.”

Following the Chinese announcement, President Trump said that he would now raise the tariff charged to China by the United States to 125%, effective immediately. At the same time, he authorized an immediate 90-day pause on the previously announced high reciprocal tariffs applicable to nearly all other countries, and substantially lowered reciprocal tariff of 10% during the 90-day period, also effective immediately, stating further that the suspension was due to dozens of countries seeking trade negotiations with the United States.

On April 11, 2025, President Trump issued a Presidential Memorandum (Clarification of Exceptions Under Executive Order 14257, as Amended), to clarify that “semiconductors” are not subject to the ad valorem rates of duty under that Executive Order 14257 (Regulating Imports With a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits), as amended by Executive Order 14259 (Amendment to Reciprocal Tariffs and Updated Duties as Applied to Low-Value Imports from the People’s Republic of China) and the Executive Order of April 9, 2025 (Modifying Reciprocal Tariff Rates to Reflect Trading Partner Retaliation and Alignment)(Subsequent Orders). The Presidential Memorandum lists specific headings and subheadings of the Harmonized Tariff Schedule of the United States (HTSUS) for exception from reciprocal tariffs:

8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included
847330 Parts and accessories of the machines of heading 8471
8486 Machines and apparatus of a kind used solely or principally for the manufacture of semiconductor boules or wafers, semiconductor devices, electronic integrated circuits or flat panel displays; machines and apparatus specified in note 11(C) to this chapter; parts and accessories:
85171300 Smartphones
85176200 Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus
85235100 Solid-state non-volatile storage devices
8524 Flat panel display modules, whether or not incorporating touch-sensitive screens
85285200 Capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471
85411000 Diodes, other than photosensitive or light-emitting diodes (LED)
85412100 With a dissipation rate of less than 1W
85413000 Thyristors, diacs and triacs, other than photosensitive devices
85414910 Other diodes
85414970 Transistors
85414980 Optical coupled isolators
85415100 Semiconductor-based transducers
8542 Electronic integrated circuits; parts thereof

The Presidential Memorandum directed that any duties that were collected at or after 12:01 a.m. eastern daylight time on April 5, 2025, pursuant to Executive Order 14257 and the Subsequent Orders, on imports that are excepted under Executive Order 14257 and the Subsequent Orders because they are “semiconductors,” shall be refunded in accordance with U.S. Customs and Border Protection’s standard procedures for such refunds.

In response to the rapidly changing tariffs situation, we are currently advising our clients on several key areas:

How the tariffs affect their current operations, including interpretation of force majeure, price adjustment provisions and import practices.
How clients can improve contract language to provide for tariff price adjustments and potential delays.
How they can structure their business relationships to minimize the impacts of tariffs on their operations and take advantage of hidden opportunities.

For more information, contact Robert Oberlies, Michael Meagher or Jackson Guo.