New World Order on “Liberation” Day with Reciprocal Tariffs and “Fantastic” Outcomes | Dickinson Wright

In a Rose Garden announcement Wednesday, President Trump elaborated on the new reciprocal tariffs (the so-called “Liberation Tariffs”) that come into effect on April 5, 2025, for over 150 countries. To illustrate the enormity and depth of these tariffs, President Trump used a chart, later released by The White House, showing tariffs on the U.S. major trading partners, including China at 34% tariff, the EU with a 20% tariff, and the UK with a 10% tariff. 10% will be the minimum baseline tariff applicable to all countries on April 5, 2025, with the increased rates going into effect on April 9, 2025. In addition to the President’s Proclamation, the White House issued Fact Sheets to provide an explanation for the rationale behind the Liberation Tariffs.

Interestingly, Canada and Mexico, the two other countries in the Canada-United States-Mexico Agreement, do not appear on the list. However, the Fact Sheets state that “for Canada and Mexico, the existing fentanyl/migration IEEPA orders remain in effect and are unaffected by this order.” For the time being, “this means USMCA-compliant goods will continue to see a 0% tariff, non-USMCA-compliant goods will see a 25% tariff, and non-USMCA-compliant energy and potash will see a 10% tariff. In the event the existing fentanyl/migration IEEPA orders are terminated, USMCA compliant goods would continue to receive preferential treatment, while non-USMCA compliant goods would be subject to a 12% reciprocal tariff.”

The rates of duty established by the Liberation Tariffs are in addition to any other duties, fees, taxes, exactions, or charges applicable to such imported articles, with certain exceptions noted in the executive order.

The exceptions include but are not limited:

• Non-U.S. content of a subject article. The ad valorem rates of duty set forth in the Executive Order 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.   “U.S. content” refers to the value of an article attributable to the components produced entirely or substantially transformed in the United States.  It is stated in the order that “the U.S. Customs and Border Protection (CBP), to the extent permitted by law, is authorized to require the collection of such information and documentation regarding an imported article, including with the entry filing, as is necessary to enable CBP to ascertain and verify the value of the U.S. content of the article, as well as to ascertain and verify whether an article is substantially finished in the United States.” 
• Annex II lists items (goods) not subject to the Liberation Tariffs, including steel and aluminum articles and derivatives, copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products. Subject to the same treatment are also automobiles and automobile parts that are already subject to the Section 232 tariffs; postal communications with no value transferred, donated items, and other listed goods, information, and information materials, including but not limited to publications, films, artwork, and baggage for personal use among others.
• The duty-free de minimis treatment with exceptions appears to remain available 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 applicable.

On the same day that the President announced the Liberation Tariffs, the U.S. Administration also confirmed that the 25% tariff on certain automobiles imported into the U.S. was going into effect on April 3, 2025. Duties on imported auto parts will become effective on May 3, 2025, as scheduled, with a process to add more parts to the list. Importantly, the ad valorem tariff of 25% described in the President’s proclamation shall not apply to automobile parts that qualify for preferential treatment under the USMCA until such time that the Secretary, in consultation with U.S. Customs and Border Patrol, establishes a process to apply the tariff exclusively to the value of the non-U.S. content of such automobile parts and publishes notice in the Federal Register.

In conclusion, the Liberation Tariffs do not replace existing tariffs and duties but are in addition to such duties except as expressly excluded above. The interplay and cumulative effect will take longer for all parties involved to adjust to and understand the full impact on global supply chains.

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