Country-Specific Reciprocal Tariffs Take Effect

This article is current at the time of posting. 

On August 7, 2025, reciprocal tariffs ranging from 10-41 percent on imports from over 60 trading partners, originally announced by President Trump in an Executive Order issued on July 31, 2025, went into effect. (see below). Most other US trading partners will remain subject to a baseline 10 percent tariff which went into effect on April 5, 2025.

On April 2, 2025 President Trump issued an Executive Order imposing the baseline and reciprocal tariffs invoking the International Emergency Economic Powers Act (IEEPA) to address persistent US trade deficits as a matter of national security. The baseline tariff went into effect on April 5, 2025, but the reciprocal tariffs were later delayed until July 9, 2025 and again to August 1, 2025 to allow time for US trading partners to negotiate more favorable trade terms with the United States. As of today, eleven trading partners – the United Kingdom, the European Union, Japan, Korea, Vietnam, Malaysia, Indonesia, the Philippines, Thailand, Cambodia, and Pakistan – are said to have reached trade agreements with the United States, though official details on these "agreements" are scarce. Several other nations are in active negotiations to reduce their reciprocal tariff level.  

At the same time, certain countries, specifically Canada, India and Brazil, have seen their tariff rates increase sharpy as a result of country-specific decisions made by President Trump to address a range of policy concerns. 

This post provides an overview of these recent developments and provides a comment on the increased importance of accurate country of origin determinations.

New Reciprocal Tariff Rates 

The reciprocal tariff rates listed below went into effect on August 7, 2025. The President noted that affected US trading partners will be subject to reciprocal tariffs until new trade agreements with the United States are concluded and memorialized through executive orders.

Implementation  

Goods loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. EDT on August 7, 2025 and entered for consumption, or withdrawn from warehouse for consumption, before 12:01 a.m. EDT on October 5, 2025, will not be subject to such additional duty and will instead remain subject to the 10 percent baseline tariff.

Exemptions and Special Cases 

The exemptions set forth in the April 2, 2025 Executive Order and subsequent modifications, which we detailed in a previous blog post, remain in effect.

Transshipment  

Goods that are determined to have been "transshipped" to evade the reciprocal tariffs will be subject to a 40 percent tariff rather than a country-specific tariff rate, applicable fines or penalties for customs fraud (defined under U.S.C. § 1592), and any other applicable duties, fees, taxes, exactions, or charges applicable to goods of the country of origin. Further, US Customs and Border Protection is instructed not to allow mitigation or remission of the penalties assessed on imports found to be "transshipped" to evade applicable duties. 

The Order does not define what constitutes "transshipment" in this context, though the implication is the fraudulent entry of goods into the United States with an incorrect country of origin. 

Separate Actions for Canada and Mexico  

President Trump announced in a separate Executive Order and corresponding fact sheet that tariffs on Canada will be increased to 35 percent from the 25 percent imposed in March. President Trump cited concerns with both Canada’s failure to cooperate with efforts to stop the illegal drug and immigration flows at the Northern border and Canada’s imposition of retaliatory tariffs of 25 percent on US imports. Unlike the other tariff rates announced on July 31, Canada's higher rate took effect on August 1, 2025. The Executive Order states that any products that do not qualify as compliant with the US-Mexico-Canada Agreement (USMCA) and are "transshipped" to evade applicable duties will be subject to a 40 percent tariff.

Hours before reciprocal tariffs were set to take effect, on July 31, 2025, President Trump announced that he and the President Claudia Sheinbaum of Mexico had reached an agreement not to escalate US tariff rates on imports from Mexico for 90 days to allow negotiations to continue. Like Canada, imports from Mexico were subject to a 25 percent tariff related to flows of illegal drugs and aliens across the Southern border.

For both Canada and Mexico, goods that are compliant with the USMCA are exempt from these tariff actions.

Importance of Country of Origin Determinations 

During the period from April to August 2025, when a 10 percent reciprocal tariff was applied uniformly to imports from all countries, the issue of country of origin attracted less attention. However, now that reciprocal tariff rates vary from 10 percent to 41 percent based on country of origin, and because of the language in the Executive Order strengthening the application of penalties for tariff avoidance, importers must now pay even greater attention to the country of origin of their merchandise.   

For more information on these actions, assistance with compliance, or questions on how the tariffs may impact your business, please contact a member of Steptoe's Trade Policy practice. 

*Throughout July, the US announced tentative trade agreements with several US trading partners. None have been memorialized through executive actions and details remain scarce and/or disputed.

** On May 8, 2025, the United States and the United Kingdom (UK) announced an "Economic Prosperity Deal" that seeks to reduce trade barriers between the trading partners. On June 16, 2025, President Trump issued an Executive Order to operationalize aspects of the Economic Prosperity Deal. 

*** Brazil is subject to country-specific IEEPA tariffs and an ongoing Section 301 investigation.

**** India is subject to additional 25 percent tariffs related to its purchases of Russian oil. These tariffs are set to take effect on August 27, 2025.