Tariffs remain at the forefront of the news cycle. While it may be impossible at this point to predict the long-term forecast for tariffs (other than tariffs appear to be here to stay, at least in the near term), it is possible to position your business to quickly respond to new announcements related to tariffs. To properly understand how to interpret some new development, the first step is to understand the impact a given tariff may have on the supply chain and your business.

As businesses strive to assess the impact of current and future tariffs in a rapidly evolving landscape, they should consider the following:

1. Determine which tariff applies to the goods being transported. The authority for a tariff will impact the rules that may apply. The Administration has issued a variety of Executive Orders (EOs) using the President’s authority under the International Economic Emergency Powers Act (IEEPA) and Section 232 (among other methods) to levy duties on various goods entering the country. Currently, the following categories of tariffs may apply; these tariffs will often “stack” or apply in combination with each other and any other relevant tariffs.
   • Ordinary Tariffs: These are tariffs that (1) were imposed prior to the current Administration (sometimes for decades); or (2) may be a countervailing or anti-dumping duty meant to address a specific unfair trade practice. They are generally not impacted by current tariff moves and typically apply in addition to any other tariffs (e.g., they are “stacked”).
   • Section 301 Tariffs: Section 301 tariffs are tariffs that were imposed during the first Trump Administration, and which have carried through to the current Administration. These tariffs are also stacked.
   • Section 232/Sectoral Tariffs: Sectoral tariffs are tariffs imposed on a category of specific products. Sectoral tariffs currently in place or being considered are listed below. For products with a tariff in place, certain carve-outs or special rules may apply.
     • Automobiles and auto parts: Currently in effect.
     • Steel and aluminum: Currently in effect.
     • Pharmaceuticals: Current EOs threaten tariffs where pricing demands are not met. Additional tariffs may be forthcoming.
     • Lumber: Under consideration at time of publication.
     • Copper: Currently in effect.
     • Semiconductors: Under consideration at time of publication.
     • Critical minerals: Under consideration at time of publication.
     • Energy and energy products: Under consideration.
   • IEEPA Tariffs: Currently, there are three distinct tariffs imposed by the President using the President’s IEEPA authority that include the following:
     •  Universal Baseline Tariffs: A universal baseline tariff of 10% applies as the default tariff for goods entering the country unless specifically exempted (the goods identified in the Sectoral Tariffs section above) or a different tariff rate is agreed upon or assigned. Goods from Canada and Mexico are not currently subject to the Universal Baseline Tariff but may become so in the future.
     • Non-China Universal Reciprocal Tariffs: The country-specific increased tariff rates were announced by the President on July 31, 2025.
     • Chinese Tariffs: Goods with Chinese origin are subject to a variety of tariffs. The U.S. and China agreed to a 90-day pause on the most recent round of reciprocal tariffs on August 11, 2025 (this pause extends the current tariff scheme until November 10 for goods from China). Specific tariffs on Chinese imports will vary but generally will be subject to a minimum 30% enhanced tariff upon entry plus any pre-existing duties (normal duty + 20% fentanyl + 10% universal).
     • North American Tariffs (Canada and Mexico): All goods entering from Canada are subject to a 35% tariff unless they comply with the United States-Canada-Mexico Act (USMCA). Energy and energy resources from Canada, as well as Canadian Potash, are also subject to a lower 10% rate. Goods entering from Mexico are subject to a 25% tariff unless they are USMCA-compliant pursuant to the terms of an extension granted by the President on July 31. Changes to the tariffs imposed on goods from Mexico are likely.
2. Understand whether “goods in transit” at the time of tariff implementation will be subject to the new tariff. This provides the deadline for compliance. For example, goods in transit before August 6, 2025, are exempt from the increased Reciprocal Tariffs announced on July 31 (with the condition that such goods must enter the U.S. before October 5, 2025).
3. Review past EOs to determine whether additional rules might apply. If so, what is the impact of these rules? Do the tariffs “stack,” or will only the highest applicable tariff apply?
4. Do the duties apply to these goods? Are there exceptions?
   • Before the goods arrive in the possession of U.S. Customs and Border Patrol, determine the estimated tariff that will be due upon entry. A business may have limited options to mitigate tariff expenses, but it is critical to evaluate these options before entry into U.S. Customs territory and before any duty has been paid.
   • Currently, one of the largest exceptions to goods coming from Canada and Mexico relates to goods that are USMCA-compliant. A party should not merely rely on an assertion that such goods are USMCA-eligible. Rather, strict country of origin documentation and certifications must be maintained and submitted to gain the advantage of this exception.
   • Goods that have been transshipped from a country with a higher duty may subject an importer to the payment of a 40% tariff where the transshipment is meant to avoid payment of the higher duty. Country of origin rules are still being developed to provide guidance regarding what may be an impermissible transshipment.
   • Sectoral exceptions may also apply. At the time of publication, the Administration is considering the levy of tariffs on specific types of goods, including semiconductors and pharmaceuticals. Given the special consideration of these products, current tariffs do not apply.
5. Is there an opportunity to mitigate the impact of the tariff? As of the time of publication, some auto part tariffs may be eligible for a refund for autos assembled in the US. While the use of Foreign Trade Zones may allow for the delayed payment of tariffs, while the use of bonded warehouses may permit an importer to manage both the timing and rate of a duty payment.

It is a challenging time to navigate these issues. For additional information, please contact Greg Feary, Shannon Cohen, Nathaniel Saylor, Braden Core, or Kevin Phillips.