Tariff Talk

Importers are on the cusp of yet another change to tariffs that impact their business and bottom line. Increased reciprocal tariffs issued under the International Emergency Economic Powers Act (IEEPA) go into effect, starting at a believed new baseline of 15%, with countries of origin seeing rates as high as 40% (Myanmar and Laos). Some key nations’ new rates include India, Malaysia, and South Korea (25%), Vietnam (20%), Indonesia and the Philippines (19%), and Japan (15%).

However, in just the last couple of hours, President Donald Trump issued orders to add a new 25% tariff on India to address Russian threats. Building on a 2022 executive order aimed at Russia’s involvement with Ukraine, the new order facilitates sanctions on Russia and restricts the importation of crude oil, petroleum, and related products into the U.S. Citing, “I find that the Government of India is currently directly or indirectly importing Russian Federation oil,” the order introduces the stacked tariff, which goes into effect on August 27 (with in-transit exclusions).

Reciprocal changes were first announced in April, lowered to a near-global 10% for 90 days, with the new increased rates announced on August 1 for August 7 effectivity. For this change, there is an in-transit exclusion for goods on the water from their final port prior to August 7. The potential for last-minute changes remains substantial. Many trade agreements are in various stages of negotiation, with all pending finish-line signatures. There is an opportunity for rate changes, updated exclusions, or new variables up to and beyond August 7.

Brokers and software providers will be working closely on the EU “all-in” 15% tariff. HTS codes have been issued for handling EU reciprocals, including instructions for how to override to achieve the 15%; this process is expected to be clarified and evolve over the coming weeks and months. OCEANAIR will be publishing regular updates over the coming days and is available at compliance@oceanair.net for client tariff questions.