In an era of changing global trade dynamics, U.S. businesses encounter new challenges and opportunities. As recent policy changes and international trade relations evolve, remaining informed, adaptable, and proactive can help define success for organizations navigating this intricate landscape.
What Happened on April 2?
On April 2, 2025, President Trump signed an executive order establishing a “Reciprocal Tariffs” policy. The policy introduced a 10% baseline tariff on all imports, followed by higher “reciprocal” tariffs on select countries.
- 10% Baseline Tariff: This applies universally to all goods entering the U.S.
- Country-Specific Tariffs: This varies based on Country/Region.
| Country/Region | Tariff Rate | Notes |
| Vietnam | 46% | |
| China | 34% | Adds to existing 20% February duties (54% total) |
| India | 26% | |
| Japan | 24% | |
| European Union | 20% | Applied to all EU member states |
| Brazil | 10% | |
| Colombia | 10% | |
| United Kingdom | 10% | |
| Canada/Mexico | 0 / 25% | 0% for USMCA-compliant goods, 25% for non-compliant |
These rates represent the reciprocal tariff structure as of April 2, 2025.
Exempt from these tariffs were all goods qualifying under the U.S.-Mexico-Canada Agreement and Section 232 items already subject to 25% tariffs, including automobiles and auto parts, steel, aluminum, copper, pharmaceuticals, semiconductors, lumber, critical minerals, and energy products.
In the wake of this news, as industries prepared for increased costs, disrupted supply chains, and mounting market pressures, U.S. financial markets experienced a sharp decline. Some regions, including the European Union and China, announced plans to retaliate, and over 75 countries approached the U.S. for negotiation discussions.
What Happened on April 9?
On April 9, the administration announced a 90-day pause on retaliatory tariffs against all countries except for China, where the tariff has increased to 125%. While this pause could create more negotiation opportunities and provide businesses additional time to plan, China remains a significant trading partner for the U.S., with goods trade between the two nations estimated to reach $582.4 billion in 2024.
As the situation regarding tariffs evolves, here are some potential impacts on businesses and how companies can begin to adapt and prepare.
Potential Impacts on Businesses:
These tariffs are expected to have several implications for businesses engaged in international trade:
- Increased Costs: The tariffs will likely raise the cost of imported goods, affecting pricing strategies and profit margins.
- Supply Chain Adjustments: Companies may need to reassess and potentially restructure their supply chains to mitigate the impact of increased import costs.
- Market Volatility: The announcement has already led to fluctuations in financial markets, indicating potential economic uncertainty.
As ongoing negotiations occur between the U.S. and its trading partners, we encourage you to:
1. Evaluate Exposure: Assess your current reliance on imports from the affected countries and determine the potential financial impact.
2. Explore Alternatives: Consider sourcing from countries not subject to additional tariffs or increasing domestic procurement where feasible.
3. Review Contracts: Examine existing contracts with suppliers and customers to understand the implications of cost increases and negotiate adjustments if necessary.
4. Stay Informed: Keep abreast of further developments in trade policies and be prepared to adapt strategies accordingly.
Whether you’re in construction, manufacturing and distribution, real estate, or another affected sector, you can stay abreast of the developing situation using our Tariff Hub.
Our Grassi team is available to provide further guidance as policies evolve.
For more personalized guidance on how these tariffs may impact your specific business operations, tax obligations, and compliance requirements, please contact your Grassi Advisor, Louis C. Grassi, Chief Executive Officer, Carolina Spera, Italian Practice Leader, or Robert E. Grote, Manufacturing & Distribution Practice Leader.
