Update on New Executive Orders

The following analysis was provided by NCBFAA Legislative Advisor Nicole Bivens Collinson of Sandler, Travis & Rosenberg, P.A.

 Sandler, Travis & Rosenberg, P.A. (ST&R) highlights that the President on Wednesday, April 9, issued two executive orders that will impact trade: one on the reciprocal tariffs and one on the maritime and shipbuilding industry.

 1.) The Executive Order, “Modifying Reciprocal Tariff Rates to Reflect Trading Partner Retaliation and Alignment,” was published this morning and, in conjunction with April 9 evening CSMS, provides clarification on the changes that are in effect at 12:01am ET on April 10. In particular: 

Tariff Modifications

Products of China, Hong Kong, or Macau entered for consumption, or withdrawn from warehouse for consumption on or after 12:01 a.m. ET on April 10 are now subject to a reciprocal tariff rate of 125%, increased from the previously announced 84%. The in-transit exemption still applies to the above tariff modification for products loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. eastern daylight time on April 10.

The remaining country-specific rates are suspended from 12:01 a.m. eastern daylight time on April 10 until 12:01 a.m. ET on July 9, 2025. Now, products of all other countries previously subject to escalated country-specific reciprocal tariffs entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. ET on April 10 will be assessed a reciprocal tariff rate of 10%.The in-transit exemption is unchanged from its prior iteration, except for replacing references to April 9 with the new date of April 10.

De Minimis Modifications

The Executive Order removing goods from China from de minimis eligibility effective May 2, is again amended regarding duty rates if China goods are shipped by international postal service. It increases the applicable duty rate to 120% ad valorem tariff on the value of the postal item effective May 2; or a specific duty of $100 per postal item for goods entered May 2 until June 1; effective June 1, that amount increases to $200 per postal item. 

While not explicit, it appears based on the wording of the Executive Order and CSMS that goods entered between the hours of 12:01 am ET April 9 and 12:00 am ET April 10 and not otherwise subject to an exemption, would remain subject to the higher (or in the case of China, lower) country-specific duty rates. 

 2.) The Executive Order, “Restoring America’s Maritime Dominance,” addresses the section 301 investigation into China’s efforts to dominate this industry. The most impactful issues are:

 a.) The USTR consider proposing the following in its recommendation for penalties under the investigation:

 (i)  tariffs on ship-to-shore cranes manufactured, assembled, or made using components of PRC origin, or manufactured anywhere in the world by a company owned, controlled, or substantially influenced by a PRC national; and

(ii) tariffs on other cargo handling equipment.

 b.) To prevent carriers from circumventing the Harbor Maintenance Fee on imports by calling on Canada or Mexico ports and sending cargo through U.S. land borders DHS shall:

Require all foreign-origin cargo arriving by vessel to clear CBP at a U.S. port of entry for security and collection of all duties, taxes, fees, and other charges; and

Ensure any foreign-origin cargo first arriving by vessel to North America clearing CBP at an inland location from Canada or Mexico is assessed applicable customs duties, taxes, fees, HMF, and other charges plus a 10 percent service fee for additional costs to CBP, so long as the cargo being shipped into the United States is not substantially transformed from its condition at the time of arrival into the country of land transit (with the discretion for such decisions to be determined by CBP).

The EO also provides that USTR may still make a determination for other remedies (such as the per port fees) for Chinese flag/built/fleet ships and other provisions designed to develop a plan for improving the U.S. maritime industry.

There are still questions that remain unanswered even though we have the Executive Orders and CSMS on them. CBP encourages the trade to raise clarifying questions to assist them in helping ensure traders understand and can comply.

As always, we will monitor these developments and update you as information becomes available.

For further questions or discussion, please contact your South East World Wide (Chicago), Ltd. Sales Representative.