Section 232 Tariffs: Steel, Aluminum, Copper and Auto Duties Explained

Section 232 tariffs are import duties authorized by the Trade Expansion Act of 1962 when the U.S. Department of Commerce determines that imports threaten national security. The program covers steel, aluminum, copper, and autos. Rates run from 25% to 50% depending on the product and country of origin. For U.S. importers, these duties stack on top of Section 301 and Reciprocal Tariff Act rates, compounding landed cost pressure across multiple supply chains.

Under 19 USC §1862, the president can impose duties or quotas after a DOC investigation concludes that import volumes endanger domestic industrial capacity. The Bureau of Industry and Security (BIS) within the DOC administers the program and publishes all actions in the Federal Register.

Which Products Fall Under Section 232 in 2026

Section 232 coverage has expanded significantly since 2018. The four active product categories are below.

Steel and Steel Derivatives (HTS Chapter 72, 73)

A 25% tariff on steel mill products took effect March 23, 2018 (Proclamation 9705). HTS Chapters 72 and 73 cover hot-rolled coil, cold-rolled sheet, structural beams, pipes, tubes, and fabricated steel products. Several countries negotiated quota agreements in exchange for tariff exemptions. Those exemptions have been narrowed or eliminated for most trading partners in 2026. Work the steel and aluminum tariffs guide for current country-specific rates.

Aluminum and Aluminum Derivatives (HTS Chapter 76)

Aluminum entered the Section 232 program at 10% in March 2018 (Proclamation 9704). The rate was raised to 25% for most countries in 2026. HTS Chapter 76 covers primary aluminum, alloyed aluminum, plates, sheets, foil, tubes, and pipes. Derivative products (parts made primarily from aluminum) are also covered.

Copper and Copper-Intensive Products (HTS Chapter 74)

A 50% Section 232 tariff on copper was announced in 2026. HTS Chapter 74 covers refined copper, copper alloys, wire, rods, plates, and tubes. This is the highest Section 232 rate applied to any commodity. Importers sourcing copper wire, bus bars, or heat exchangers should recalculate landed costs immediately. Review the full copper tariff breakdown for HTS-level detail.

Autos and Auto Parts (HTS Chapter 87)

A 25% tariff on passenger vehicles and auto parts took effect in 2026. HTS Chapter 87 covers passenger cars, light trucks, and a defined list of auto parts. The parts list includes engines, transmissions, body stampings, axles, and suspension components. Vehicles qualifying under USMCA are subject to different treatment depending on regional content percentages.

Current Section 232 Rates and Duty Stacking

The table below shows the active Section 232 rates as of 2026:

  • Steel: 25% (most countries); higher for certain steel derivative products
  • Aluminum: 25% (most countries)
  • Copper: 50%
  • Autos and auto parts: 25%

Section 232 duties are additive. An importer bringing in Chinese steel pays the Section 232 steel duty (25%) plus Section 301 list duties (if the HTS code appears on a Section 301 list) plus the Reciprocal Tariff Act rate (145% for China). The combined rate can exceed 170% on affected steel products. Use the Captain tariff tracker to calculate stacked duties by HTS code and country of origin before each purchase order.

How the Section 232 Exclusion Process Works

BIS operates the Section 232 exclusion portal under 15 CFR Part 705. Importers, manufacturers, and other interested parties can request product-specific exclusions. An approved exclusion lets a named company import a defined product at zero Section 232 duty.

Eligibility Criteria

To qualify, the requester must show that the product is not produced in the U.S. in sufficient quantities, not produced in adequate quality, or not available in a timely manner from domestic sources. The request must identify the specific HTS subheading and describe the product in technical terms that match the actual import.

BIS Exclusion Portal Walkthrough

File the exclusion request through the BIS Section 232 exclusion portal. The submission requires a company profile, product description, quantity requested, domestic supplier objection process, and supporting documentation. After submission, domestic steel or aluminum producers can file objections within 30 days. BIS adjudicates the record and issues a determination published in the Federal Register. The USITC provides data support for BIS on many requests.

Common Rejection Reasons

BIS rejects exclusion requests when domestic availability is not adequately disproven, when the product description does not precisely match the HTS subheading, or when a domestic producer successfully objects with capacity evidence. Requests without specific mill certifications or technical specs are also frequently denied.

Section 232 vs Section 301 vs Section 122

Tariff Response Unit

Audit your derivative HTS exposure

Our brokers will review your top 50 derivative HTS lines and flag Section 232 valuation risk before CBP does.

Get the Audit
CAPTAIN CONTROL TOWER

Quantify your exposure in 20 minutes

Our trade strategists run your last 90 days of entries through Captain to surface refund eligibility, Section 232 traps and PNTR risk.

EXPLORE CAPTAIN

These three tariff authorities overlap but have different legal bases and triggers.

  • Section 232: National security threat to domestic industry. No expiration. Applies globally with country-specific carveouts. BIS administers.
  • Section 301: Unfair trade practices by a foreign government. China-specific in current application. USTR administers. See the full Section 301 tariffs on China analysis for list-by-list breakdowns.
  • Section 122: Balance-of-payments emergency. Maximum 15% rate. Maximum 150-day duration. Has not been used as a comprehensive surcharge in modern trade history.

The Reciprocal Tariff Act adds a fourth layer based on bilateral trade deficits. All four programs can apply simultaneously to a single shipment.

How Importers Reduce Section 232 Exposure

Three mechanisms reduce or defer Section 232 duties without changing the HTS classification:

  1. Foreign-Trade Zone (FTZ): Goods admitted to an FTZ before a rate proclamation takes effect enter at the pre-proclamation rate. FTZs also eliminate duties on goods re-exported without entering U.S. commerce.
  2. Customs bonded warehouse: Duties are deferred until withdrawal for consumption. If a rate drops or an exclusion is granted, the importer can withdraw at the lower rate.
  3. Section 232 exclusion: Company-specific exclusions eliminate the duty entirely for approved products and quantities.

A tariff consulting firm can identify which mechanism applies to your product and model the savings against setup costs. The trade advisory services team runs the landed cost comparison across all three options before recommending a strategy.

Frequently Asked Questions

Are Section 232 tariffs still active in 2026?

Yes. Section 232 tariffs on steel and aluminum remain fully active in 2026. Copper and auto parts were added in 2026. No sunset date applies. Congress can modify the program through legislation, but the executive orders implementing current rates remain in force.

What is the current Section 232 tariff rate on steel?

The base rate is 25% for most countries. Some country-specific agreements set different rates or quotas. Check the Federal Register for the most recent proclamation applying to your supplier’s country of origin.

Can I file a Section 232 exclusion request as an importer?

Yes. Importers, manufacturers, and purchasers of steel and aluminum products can file exclusion requests through the BIS Section 232 exclusion portal. The process requires product-specific documentation and a showing that domestic supply is insufficient.

Do Section 232 tariffs stack with Section 301 China tariffs?

Yes. If a Chinese steel product appears on a Section 301 list, both the Section 232 rate and the Section 301 rate apply. The Reciprocal Tariff Act rate also stacks. All three are cumulative on top of the base HTSUS Column 1 duty.

Is there a Section 232 refund mechanism?

There is no standalone refund program for Section 232 duties. However, Section 232 duties are generally eligible for duty drawback under 19 USC §1313, meaning importers who re-export finished goods can recover up to 99% of duties paid on the imported inputs.

What HTS codes are covered by Section 232 copper?

Section 232 copper covers HTS Chapter 74, which includes refined copper (7401-7403), copper alloys (7403-7407), copper plates, sheets, strip, and foil (7409-7410), copper tubes and pipes (7411), and copper wire (7408). Check the specific proclamation for the exact HTS subheadings covered.

How long does a Section 232 exclusion request take?

BIS targets 90 days for a determination, but complex requests with objections from domestic producers can take 6-12 months. Plan procurement timelines accordingly. An approved exclusion is retroactive to the date of filing, so duties paid during the review period can be recovered.

Section 232 exposure is predictable when you map it by HTS code before placing orders. The tariff consulting firm team runs HTS-level Section 232 analysis as part of every import cost review. The trade advisory services team then models exclusion eligibility, drawback recovery, and FTZ deferral to find the lowest landed cost path.

/by

Section 122 Tariffs: Balance-of-Payments Authority and 2026 Implementation

Section 122 tariffs are import surcharges authorized by the Trade Act of 1974 §122 (19 USC §2132) when the United States faces a large and serious balance-of-payments deficit. The president can impose a surcharge of up to 15% on all dutiable imports without congressional approval. The surcharge can stay in place for up to 150 days before Congress must act to extend it. Section 122 has never been used as a comprehensive surcharge in modern U.S. trade history, but its legal framework is fully operational and is a known tool in the presidential trade toolbox for 2026.

Unlike IEEPA (used for the Reciprocal Tariff Act) or Section 232 (used for steel and aluminum), Section 122 requires no national security finding. It requires only a Treasury determination that the U.S. BoP deficit is large enough to warrant emergency action.

Statutory Limits on Section 122

Three hard limits define the Section 122 authority:

  1. Rate cap: Maximum 15%. The surcharge cannot exceed 15% on any dutiable import. Unlike IEEPA, which has no statutory rate ceiling, Section 122 gives importers a predictable worst-case number.
  2. Duration cap: Maximum 150 days without congressional extension. The 150-day clock starts on the date the proclamation takes effect. After 150 days, the surcharge automatically expires unless Congress passes authorizing legislation.
  3. BoP trigger: The U.S. Secretary of the Treasury and the USTR must determine that the U.S. faces a large and serious BoP deficit. The IMF’s Articles of Agreement framework defines what constitutes a BoP crisis for consultation purposes. The International Monetary Fund must be notified, though its approval is not required.

Section 122 vs IEEPA vs Section 232 vs Section 301

Each statutory authority has a different trigger, scope, and rate ceiling. Importers need to understand which law is activating which duty on their shipment.

When the President Picks Section 122 Over IEEPA

IEEPA (the International Emergency Economic Powers Act) is the authority behind the current Reciprocal Tariff Act. Check IEEPA tariff refunds for the limited recovery options available outside of standard drawback and has no statutory rate ceiling. In theory, an IEEPA tariff could exceed 15%. Section 122 is rate-capped at 15% but requires a shorter legal process and a narrower trigger (BoP vs. national emergency). A president might choose Section 122 when:

  • The administration wants a surcharge framed as a BoP corrective measure rather than a national emergency action
  • The rate needed is at or below 15%
  • The policy timeline is intended to be short (under 150 days) as a negotiating lever

The Section 232 tariffs guide explains the national security pathway. The Section 301 tariffs on China article covers the unfair trade practices pathway. Section 122 sits alongside those as a third distinct statutory tool.

2026 Implementation Context

Trade Advisory

Talk to a senior trade strategist this week

A 30-minute working session to map your bridge-tariff exposure, AIPA refund posture and DDP risk — then a clear action plan, not a sales deck.

Book advisory call
CAPTAIN CONTROL TOWER

Quantify your exposure in 20 minutes

Our trade strategists run your last 90 days of entries through Captain to surface refund eligibility, Section 232 traps and PNTR risk.

EXPLORE CAPTAIN

As of 2026, Section 122 has not been activated for a comprehensive surcharge. The current tariff environment is driven by IEEPA (Reciprocal Tariff Act), Section 232 (steel, aluminum, copper, autos), and Section 301 (China-specific). However, Section 122 remains a live legal option. The U.S. trade deficit has reached levels that could satisfy the statutory trigger. Importers working with the Captain tariff tracker can monitor Federal Register proclamations in real time to detect a Section 122 activation before shipments depart origin.

If Section 122 is activated, the surcharge applies to all dutiable imports regardless of country of origin. Unlike Section 301 (China only), a Section 122 surcharge hits Mexico, Canada, the EU, and every other trading partner simultaneously. That scope makes it the highest-impact short-term trade tool available under current law.

How Importers Respond to a Section 122 Surcharge

Because a Section 122 surcharge is time-limited and applies universally, the response strategy differs from country-specific or product-specific tariffs.

Cost Pass-Through Scenarios

At 15% maximum, the Section 122 rate is lower than most Section 301 rates and far below the Reciprocal Tariff Act rate on China. For many product categories, the landed cost increase is passable to customers without absorbing it entirely. Model the pass-through by product margin and customer price sensitivity before the surcharge hits.

FTZ and Bonded Warehouse Deferral

Goods admitted to a Foreign-Trade Zone or entered into a customs bonded warehouse before the Section 122 proclamation effective date lock in pre-surcharge duty treatment. For FTZ goods, duties apply at the rate in effect when goods leave the zone and enter U.S. commerce. For bonded warehouse goods, duties apply at the rate in effect at withdrawal. If a Section 122 surcharge is announced with a delayed effective date (common in trade policy), importers have a window to move inventory into either structure. Talk to the trade advisory services team to model whether the setup cost of FTZ admission or bonded entry justifies the duty savings over a 150-day window.

Documentation Needed at Entry

A Section 122 surcharge is collected at CBP entry. The importer of record is responsible for paying the correct rate. Entry documents must reflect the dutiable value correctly, as the surcharge is calculated on the same dutiable value as the Column 1 duty. Ensure commercial invoices, packing lists, and customs entries are consistent before filing.

Frequently Asked Questions

What is a Section 122 tariff?

A Section 122 tariff is a temporary import surcharge authorized under the Trade Act of 1974 §122 (19 USC §2132). The president can impose it when the U.S. faces a large and serious balance-of-payments deficit. The surcharge applies to all dutiable imports regardless of country of origin, up to a maximum of 15%.

What is the maximum rate under Section 122?

15%. Unlike IEEPA, which has no statutory rate ceiling, Section 122 is hard-capped at 15%. This gives importers a predictable maximum exposure when modeling worst-case landed costs.

How long can a Section 122 surcharge stay in place?

150 days without congressional action. After 150 days, the surcharge automatically expires unless Congress passes legislation to extend it. This built-in expiration makes Section 122 a short-term tool, not a structural tariff program.

Does Section 122 require congressional approval?

No, for the initial 150-day period. The president can impose the surcharge unilaterally after the Treasury/USTR BoP determination. Congressional approval is required only to extend the surcharge beyond 150 days.

Is Section 122 the same as IEEPA tariffs?

No. IEEPA (International Emergency Economic Powers Act) requires a national emergency declaration and has no statutory rate ceiling. Section 122 requires a balance-of-payments finding and caps the rate at 15%. The current Reciprocal Tariff Act operates under IEEPA authority, not Section 122.

How do FTZs help against Section 122 duties?

Goods admitted to a Foreign-Trade Zone before the Section 122 proclamation effective date are not subject to the surcharge when they enter U.S. commerce, provided the zone admission predates the proclamation. This allows importers to front-load inventory into FTZ status before a known effective date.

Can Section 122 tariffs be refunded?

No established refund mechanism exists for Section 122 duties. The automatic expiration after 150 days means the surcharge simply stops applying going forward. Duties collected during the active period are not refunded unless a court order or subsequent executive action specifically authorizes it.

A Section 122 surcharge is short, sharp, and predictable in its mechanics. The Captain tariff tracker monitors Federal Register proclamations in real time. The trade advisory services team models 150-day exposure windows against your import calendar and identifies which shipments benefit from FTZ or bonded warehouse deferral before a proclamation effective date arrives.

/by

Section 301 Tariffs: China Duties, Exclusions and Refund Process

Section 301 tariffs are U.S. import duties imposed on Chinese goods under the authority of the Trade Act of 1974 §301 (19 USC §2411-2420). The Office of the U.S. Trade Representative (USTR) initiated the program in 2018 after investigating China’s unfair trade practices in technology transfer, intellectual property, and innovation. The result was four tariff lists covering roughly $370 billion in annual Chinese imports. In 2026, Section 301 duties stack on top of the Reciprocal Tariff Act rates, bringing total China tariffs to 145% for most affected goods.

Section 301 is China-specific. It does not apply to imports from other countries. Every Section 301 shipment uses an HTS subheading in the 9903.88 series to identify the applicable list and rate. U.S. Customs and Border Protection (CBP) collects the duties at the time of entry.

Section 301 Lists and HTS Code Coverage

USTR created four tariff lists between 2018 and 2019, each covering a different tranche of Chinese goods by HTS code.

How to Check If Your HTS Code Is on a Section 301 List

Search the USTR Section 301 list database by 10-digit HTS subheading. If your subheading appears on List 1, 2, 3, or 4A, the corresponding rate applies on top of all other duties. Use the China to U.S. tariff calculator to check total stacked duty rates by HTS code before placing purchase orders.

HTS Subheading 9903.88 Explained

Every Section 301 entry uses a special HTS subheading in the 9903.88 series as an additional classification. CBP applies the rate associated with that subheading on top of the standard Column 1 duty. The subheading identifies which list applies:

  • List 1 ($34B goods): 25% rate. Covers industrial machinery, aerospace components, and high-tech goods.
  • List 2 ($16B goods): 25% rate. Covers semiconductors, chemicals, and plastics.
  • List 3 ($200B goods): 25% rate (raised from 10% in May 2019). Covers consumer goods, furniture, seafood, and a wide range of manufactured products. This list represents the largest share of affected import value.
  • List 4A ($120B goods): 7.5% rate (reduced from 15% under the Phase 1 deal in January 2020). Covers consumer electronics, apparel, footwear, and other consumer goods.

Current Section 301 Rates in 2026

In 2026, Section 301 rates themselves have not changed since 2020. What changed is the stacking environment. The Reciprocal Tariff Act added a 145% baseline on Chinese goods through executive order. The combined rate on a List 3 product from China is:

  • Base HTSUS Column 1 duty (varies by product, often 0-6%)
  • Section 301 List 3: 25%
  • Reciprocal Tariff Act: 145%
  • Total: 170%+ before Section 232 stacking

For steel and aluminum products subject to both Section 301 and Section 232, add 25% more. This level of stacked tariffs has made direct China sourcing economically viable only for products with no alternative supply chain. Work with a tariff consulting firm to map your full duty stack before committing to a sourcing decision.

Section 301 Exclusion Process and Reinstatement

USTR grants product-specific exclusions that allow named importers to bring in covered goods at zero Section 301 duty. Exclusions are time-limited and company-specific or product-specific depending on the batch.

Active Exclusions in 2026

USTR has reinstated some exclusions that expired during 2021-2023. The active exclusion set changes with each USTR Federal Register notice. Importers must verify that their specific HTS subheading and product description match an active exclusion before claiming it at entry.

How to Request a New Exclusion

USTR opens exclusion request windows on a list-by-list basis. During an open window, importers submit a request describing the product, the volume needed, and why no adequate domestic or third-country source exists. Domestic producers can object. USTR issues a determination published in the Federal Register. Approved exclusions apply retroactively to the request date.

Section 301 Refund Eligibility and CIT Litigation Status

CAPTAIN CONTROL TOWER

Quantify your exposure in 20 minutes

Our trade strategists run your last 90 days of entries through Captain to surface refund eligibility, Section 232 traps and PNTR risk.

EXPLORE CAPTAIN
Tariff Response Unit

Audit your derivative HTS exposure

Our brokers will review your top 50 derivative HTS lines and flag Section 232 valuation risk before CBP does.

Get the Audit

The Court of International Trade (CIT) has been hearing consolidated challenges to the Section 301 List 3 and 4A tariffs in In Re Section 301 Cases. Importers who preserved their refund claims by filing protests with CBP may recover duties if the court rules in their favor. This is active litigation. The outcome is uncertain. Do not make sourcing or cash flow decisions based on an assumed refund. Consult legal counsel with CIT experience before relying on this pathway.

Separately, Section 301 duties are eligible for duty drawback under 19 USC §1313. Importers who re-export finished goods manufactured with Section 301 inputs can recover up to 99% of duties paid. This is a confirmed pathway, unlike the CIT litigation. See the IEEPA tariff refunds page for context on what refund mechanisms are confirmed vs pending.

Mitigation Strategies for Importers

Four strategies reduce Section 301 exposure without abandoning China sourcing entirely:

  1. First Sale for Export: Value the import at the manufacturer’s first sale price rather than the middleman price. This lowers the dutiable value and reduces the absolute dollar amount of Section 301 duties. The First Sale for Export program requires documentation of the transaction chain.
  2. Customs bonded warehouse: Defer duties while waiting for exclusion decisions or rate changes. Duties apply at the rate in effect at withdrawal, not at entry.
  3. Sourcing diversification: Shift production to Mexico (USMCA), Vietnam, India, or other countries not subject to Section 301. Verify that the country of origin determination supports the shift before moving purchase orders.
  4. Duty drawback: Recover up to 99% of Section 301 duties paid on inputs used in goods that are subsequently exported. File within 5 years of export.

The trade advisory services team models all four options against your current HTS code mix and exports volume to find the highest-ROI combination.

Frequently Asked Questions

Are Section 301 tariffs still in effect in 2026?

Yes. All four Section 301 lists remain active. USTR has not revoked any list. The rates from 2018-2020 remain in place, now stacked under the Reciprocal Tariff Act framework.

Which lists do Section 301 tariffs cover?

Four lists: List 1 ($34B, 25%), List 2 ($16B, 25%), List 3 ($200B, 25%), and List 4A ($120B, 7.5%). Lists 4B was proposed but never implemented. Check your HTS subheading against all four lists.

How do I check if my HTS code is hit by Section 301?

Search the USTR Section 301 list database by 10-digit HTS subheading. If your subheading appears on any list, the associated rate applies on all shipments of that product from China.

Can I get a Section 301 refund?

Two pathways exist. First, duty drawback: recover up to 99% of duties on inputs used in re-exported goods (confirmed pathway). Second, CIT litigation refund if the court rules for plaintiffs (uncertain, pending). Do not count on the litigation pathway without legal advice.

How do I file a Section 301 exclusion request?

USTR opens request windows by list. Submit through the USTR exclusion portal during an open window. Describe the product, volume, and lack of domestic or third-country alternatives. USTR publishes determinations in the Federal Register.

Do Section 301 tariffs stack with reciprocal tariffs?

Yes. In 2026, both apply simultaneously. A List 3 product from China pays 25% (Section 301) plus 145% (Reciprocal Tariff Act) plus the base Column 1 rate plus any Section 232 rate. All are additive.

What is HTS subheading 9903.88?

HTS 9903.88 is the special classification subheading series used to collect Section 301 duties at CBP. Each specific subheading under 9903.88 identifies which Section 301 list applies to the entry. The subheading is entered in addition to the standard product HTS code.

Section 301 exposure on China sourcing is reducible. The China to U.S. tariff calculator shows your full stacked duty rate by HTS code in seconds. The trade advisory services team maps exclusion eligibility, drawback recovery, and sourcing alternatives to cut your total landed cost.

/by

Reciprocal Tariff Act: Forwarder’s Complete 2026 Guide

,

The Reciprocal Tariff Act is the executive framework the Trump administration activated on April 2, 2026, to impose import duties based on bilateral trade deficits, not on the rates trading partners charge on American goods. Rates run from 10% to 145% depending on the country of origin. For freight forwarders, this changes HTS classification workflows, transit date tracking, and client cost projections on any shipment bound for the United States.

What the Reciprocal Tariff Act Is

Legal foundation: IEEPA and the Liberation Day executive order

The Reciprocal Tariff Act is not legislation passed by Congress. It is an executive order signed by President Trump on April 2, 2026, under the International Emergency Economic Powers Act (IEEPA). IEEPA authorizes the executive branch to take emergency economic measures without legislative approval.

The order classifies the chronic US trade deficit as a national economic emergency. That declaration provides the legal basis for differentiated import duties by country of origin.

CAPTAIN CONTROL TOWER

Quantify your exposure in 20 minutes

Our trade strategists run your last 90 days of entries through Captain to surface refund eligibility, Section 232 traps and PNTR risk.

EXPLORE CAPTAIN

Why “reciprocal” does not mean rate-matching

The name is misleading. A traditional reciprocal tariff mirrors the rate a trading partner charges on American exports. The Reciprocal Tariff Act uses a different mechanism. It divides the bilateral trade deficit by total imports from that country and multiplies the result by 0.5.

Vietnam charges an average of 9% on American goods. Under the Reciprocal Tariff Act, Vietnam receives a 46% rate. The gap reflects the size of Vietnam’s trade surplus with the US, not its own tariff policy.

Tariff Response Unit

Audit your derivative HTS exposure

Our brokers will review your top 50 derivative HTS lines and flag Section 232 valuation risk before CBP does.

Get the Audit

How Duty Rates Are Calculated

The administration’s published formula is:

Tariff rate = (bilateral trade deficit / total imports from that country) x 0.5

For China, the formula produces a base rate of 34%. The administration raised it to 145% through additional executive actions. That 145% stacks on top of the HTSUS Column 1 rate and, for Chinese goods, on top of Section 301 duties.

A universal floor of 10% applies to all countries not covered by a specific higher rate. It took effect on April 5, 2026.

Trade Advisory

Talk to a senior trade strategist this week

A 30-minute working session to map your bridge-tariff exposure, AIPA refund posture and DDP risk — then a clear action plan, not a sales deck.

Book advisory call

Countries and Current Active Rates

Countries with the largest bilateral surpluses against the US carry the highest rates:

  • China: 145% (reciprocal tariff + Section 301 stacking)
  • Cambodia: 49%
  • Vietnam: 46%
  • Bangladesh: 37%
  • Thailand: 36%
  • Indonesia: 32%
  • India: 26%
  • European Union: 20% (90-day pause expired; full rate reinstated)
  • Rest of world: 10% (universal baseline)

Canada and Mexico fall outside the Reciprocal Tariff Act framework. USMCA governs most of their trade with the US. Steel and aluminum from any origin, including Canada and Mexico, remain subject to Section 232 duties separately.

In April 2026, the administration announced a 90-day pause that lowered rates to 10% for more than 75 countries. China was excluded from the pause.

Which Products Are Covered

Most-affected HTS chapters

The Reciprocal Tariff Act applies to nearly all imports. The categories with the highest combined duty exposure are:

  • Consumer electronics and components (HTS Chapter 85)
  • Industrial machinery and equipment (Chapter 84)
  • Apparel, textiles, and footwear (Chapters 61, 62, and 64)
  • Furniture, wood products, and home goods (Chapter 94)
  • Plastics and rubber articles (Chapters 39 and 40)

Exemptions

The executive order excludes specific product groups:

  • Pharmaceutical products (select Chapter 30 categories)
  • Semiconductors and silicon wafers
  • Energy: crude oil, LNG, uranium
  • Certain critical minerals
  • Steel and aluminum already covered by Section 232 (those products do not stack the reciprocal rate on top of existing Section 232 duties)

CBP updates the exemption list through Federal Register notices. An exemption approved in April can be revoked in June. The Trump tariff tracker covers these updates in real time.

Operational Impact for Freight Forwarders

Entry date governs, not shipment date

The applicable duty rate is the one in effect on the US customs entry date, not the date of shipment. A container that left Shanghai on March 28 and entered Los Angeles on April 10 pays the 145% rate, even though it shipped before the executive order took effect.

Forwarders must calculate ETA with margin and flag the tariff risk to the importer before confirming the booking.

HTS classification review

A classification error under the Reciprocal Tariff Act can mean paying 20% instead of 46%. CBP has authority to reclassify at entry and bill the importer of record for the difference.

Asian suppliers classify goods under their own export schedules. The HTSUS diverges at the 8- and 10-digit level. Forwarders must verify HTS codes for each affected origin before issuing the shipper’s letter of instruction. The Har1monized Tariff Schedule lookup covers current HTSUS codes with Column 1 and Section 301 rates applied.

Additional CBP documentation

With the Reciprocal Tariff Act active, CBP requests more frequently:

  • Country of origin declaration signed by the exporter
  • Commercial invoice with precise merchandise description and unit price
  • First sale documentation if the importer wants to apply that valuation method
  • For China shipments: supporting documentation for any active Section 301 exclusions

Ways to Reduce Duty Exposure

Foreign Trade Zones (FTZ). Goods entering an FTZ do not incur duties until they exit into US commerce. FTZs allow importers to defer duty payments, re-export without paying duties, or manipulate goods in ways that may change their HTS classification. Active FTZ facilities operate at the ports of Los Angeles, Chicago, and Savannah.

First sale valuation. In multi-tier supply chains, the importer of record can declare the price of the first commercial transaction (manufacturer to trader) as the customs value instead of the final sale price. This reduces the dutiable base. Full documentation of the entire transaction chain is required. First sale for export explains the qualification criteria and documentation requirements.

Origin diversification. Manufacturers are shifting production from China to India, Vietnam, and Mexico. The logistics consequences of that shift, including new bottlenecks and lead time changes, are covered in detail in this year’s tariff pivot.

IEEPA tariff refunds. Importers who overpaid duties during periods of regulatory uncertainty, or whose goods qualify under retroactive exclusions, may recover overpaid amounts. IEEPA tariff refunds outlines the filing process and eligibility window.

Tariff consulting. Specialized tariff consulting for freight forwarders covers HTS classification analysis, origin ruling reviews, and exclusion petitions before the USTR. It delivers the most value on recurring China shipments where stacked duties exceed 145%.

Common Mistakes

Assuming the 90-day pause covers your client’s origin. Not all countries are in the pause. China is not. The pause can also end before 90 days through an additional executive order.

Quoting with the current rate and no adjustment clause. A 10% rate today can become 46% before the container reaches port. Quotes should include a tariff adjustment clause or a validity window of 24 to 48 hours.

Not separating stacked duties for China shipments. The effective rate on Chinese goods is not simply 145%. Add the HTSUS Column 1 rate (typically 3% to 4%) and Section 301 duties (up to 25% depending on the product). The real effective rate exceeds 160% across many HTS chapters.

Ignoring country of origin for multi-component shipments. CBP applies the substantial transformation rule. If the forwarder fails to document component origins correctly, CBP can assign the origin of the country with the highest applicable duty rate.

FAQ

Is the Reciprocal Tariff Act permanent?

No expiration date is set. The executive order can be modified, paused, or revoked through a subsequent executive action. It already happened in April 2026 when the administration paused rates for more than 75 countries.

Who actually pays the tariff, the exporter or the importer?

The importer of record pays CBP. The exporter has no direct legal obligation. The economic split depends on how the parties negotiated the purchase price.

Can a freight forwarder act as importer of record?

Yes, with a power of attorney from the client. Taking on that role means accepting full legal responsibility to CBP for duty payment and documentation accuracy.

What happens if CBP finds an incorrect HTS code?

CBP issues a CF-28 (request for information) or a CF-29 (notice of action) to the importer of record. CBP can collect the unpaid difference plus interest. If CBP determines there was fraudulent intent, additional penalties apply under 19 USC 1592.

Are e-commerce shipments affected?

Yes. The executive order eliminated the de minimis exemption (USD 800 threshold) for shipments originating from China starting May 2, 2026. Packages from platforms such as Shein and Temu pay the full 145% rate.

How does an importer request a product exclusion?

Exclusion petitions go to the Office of the United States Trade Representative (USTR). The importer of record files, not the forwarder. The process includes a public comment period and can take several months.

Running regular shipments from Asia to the US? Specialized tariff consulting for freight forwarders reviews your HTS mix, checks origin documentation, and calculates the real duty impact of the Reciprocal Tariff Act on your margins.

 

/by

The 2026 Tariff Pivot: “Strike First” Enforcement, New Year’s Eve Punts, and the $90 Billion Refund Cliff

Discover how 2026 tariff changes are reshaping freight, supply chains, and shipping strategies amid volatility, rising costs, and shifting trade flows.

Read more
/by

6 Truths Reshaping Global Trade in 2026

Discover 6 Truths Reshaping Global Trade this year. We are currently operating in a landscape where federal trade rulings and tariff authorities shift not by the year.

Read more
/by

AIPA Refunds & Section 122: Proactive Trade Strategies

The Supreme Court struck down AIPA. Learn how to secure your refunds, manage new Section 122 duties, and use the ACE portal for expert trade compliance.

Read more
/by

Refund Revolution 5 Trade Shifts Top Importers Must Know

Discover 5 key trade shifts, from IEPa refunds to DDP risks, reshaping costs, compliance, and profit strategy. Stay ahead of enforcement trends. Now.

Read more
/by