On April 2, 2025, President Trump signed an executive order establishing a “Reciprocal Tariffs” policy. The policy introduces a 10% baseline tariff on all imports, effective at 12:01 a.m. EDT on Saturday, April 5, 2025, followed by higher “reciprocal” tariffs on select countries, starting at the same hour on Wednesday, April 9, 2025.
Tariff Structure Details:
- 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 address what the administration perceives as trade imbalances and may adjust based on ongoing negotiations.
Exemptions:
- USMCA-Qualified Goods: All goods qualifying under the U.S.-Mexico-Canada Agreement remain tariff-free indefinitely.
- Section 232 Goods: Items already subject to 25% tariffs under Section 232, including automobiles and auto parts, steel, aluminum, copper, pharmaceuticals, semiconductors, lumber, critical minerals, and energy products.
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:
- Evaluate Exposure: Assess your current reliance on imports from the affected countries and determine the potential financial impact.
- Explore Alternatives: Consider sourcing from countries not subject to additional tariffs or increasing domestic procurement where feasible.
- Review Contracts: Examine existing contracts with suppliers and customers to understand the implications of cost increases and negotiate adjustments if necessary.
- Stay Informed: Keep abreast of further developments in trade policies and be prepared to adapt strategies accordingly.
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.
