05/02/2025
In-Transit Provisions for IEEPA Reciprocal Duties
Check out this week’s Customs Corner to read about in-transit provisions for IEEPA reciprocal duties, an Executive Order outlining tariffs that shouldn't be stacked, and more.
Trade and Customs Updates
1) In-Transit Provisions for IEEPA Reciprocal Duties
CBP provides guidance on what is considered a “vessel” and in-transit rules for IEEPA tariffs.
The table below provides CBP guidance regarding when the in-transit rules apply. These rules only apply to goods transported by vessel (watercraft). They do not apply to other types of transportation like air, rail, or truck.
According to U.S. law (19 U.S.C. 1401 and 19 CFR 4.0), a "vessel" includes any kind of watercraft used or capable of being used for water transportation. It does not include aircraft.
The in-transit rules also do not apply if the shipment starts on a vessel but finishes its journey using a different mode of transport (a process called "transloading").
If a shipment was not transported entirely by vessel but was incorrectly filed using HTS code 9903.01.28, it must be corrected. Importers are encouraged to review their entries and advise when corrections are required.
References:
2) Executive Order on Stacking CA, MX and Section 232 Tariffs
President Trump has issued an Executive Order outlining the various tariffs that should not be stacked resulting in excessive total duties.
The United States has implemented tariffs under various legal authorities, including Executive Orders and proclamations. While each action serves a unique policy objective, President Trump has concluded that when multiple tariffs apply to the same product, their combined impact should not result in an excessive total duty. Such cumulative effects, or "stacking," may go beyond what is necessary to meet the intended policy goals. To prevent this, the order establishes a process of determining which tariff will apply when a product is subject to more than one of the measures outlined in the Executive Order.
Goods subject to Section 232 Automobile and Automobile Parts tariffs (25%) will not be subject to:
- CA IEEPA Fentanyl tariffs (25%)
- MX IEEPA Fentanyl tariffs (25%)
- Section 232 Aluminum and Aluminum Derivatives (25%)
- Section 232 Steel and Steel Derivatives (25%)
Goods subject to CA IEEPA Fentanyl tariffs (25%) or MX IEEPA Fentanyl tariffs (25%) will not be subject to:
- Section 232 Aluminum and Aluminum Derivatives (25%)
- Section 232 Steel and Steel Derivatives (25%)
Goods subject to Section 232 Aluminum and Aluminum Derivatives (25%) can still be subject to:
- Section 232 Steel and Steel Derivatives (25%)
Goods subject to Section 232 Steel and Steel Derivatives (25%) can still be subject to:
- Section 232 Aluminum and Aluminum Derivatives (25%)
Each action listed below remains independently valid and enforceable, except that the duty rates provided by these actions shall not be cumulative when the conditions outlined above are met:
- Section 232 Automobile and Automobile Parts tariffs (25%)
- CA IEEPA Fentanyl tariffs (25%)
- MX IEEPA Fentanyl tariffs (25%)
- Section 232 Aluminum and Aluminum Derivatives (25%)
- Section 232 Steel and Steel Derivatives (25%)
The Executive Order regarding the “stacking” of tariffs is retroactive to March 4, 2025. If you have an entry where the tariffs were stacked a post summary correction can be filed to obtain a refund. Please reach out to Trade Services [email protected] to discuss.
As of 12:00 PM EST on 5/2/2025, we are still pending an additional CSMS on filing instructions for current entries impacted by the Executive Order.
References:
Federal Register :: Addressing Certain Tariffs on Imported Articles
Addressing Certain Tariffs on Imported Articles – The White House
CSMS # 64916414 - Executive Order Addressing Certain Tariffs on Imported Articles
3) Import Duties on Certain Automobile Parts
Section 232 tariffs on Automobile Parts Due to Begin May 3, 2025
On March 26, 2025, the President issued Proclamation 10908, titled Adjusting Imports of Automobiles and Automobile Parts into the United States. This action imposes a 25% tariff under Section 232 on parts for passenger vehicles—including sedans, SUVs, crossovers, minivans, and cargo vans—as well as light trucks, imported from all countries. The tariff becomes effective on May 3, 2025.
As detailed in the Federal Register Notice published April 3, 2025 (90 FR 14705), the 25% tariff applies to goods entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. Eastern Time on May 3, 2025.
CSMS # 64916652 provides detailed entry filing instructions.
Reference:
CSMS # 64916652 - UPDATE to CSMS # 64913145:D GUIDANCE: Import Duties on Certain Automobile Parts
4) Adjustment to Tariffs on Automobiles and Automobile Parts
Trump signs Executive Order modifying the original tariff structure on automobiles and automobile parts used in vehicles assembled in the U.S.
In Proclamation 10908, issued on March 26, 2025, President Trump stated that imports of automobiles and certain auto parts posed a threat to U.S. national security. As a result, he authorized Section 232 tariffs on these products. The tariffs on automobiles took effect at 12:01 a.m. EDT on April 3, 2025, while tariffs on automobile parts are scheduled to begin on or after 12:01 a.m. EDT on May 3, 2025.
On April 29, 2025, the President signed an Executive Order modifying the original tariff structure. The order reduces tariffs on certain auto parts used in vehicles assembled in the U.S.—specifically, parts that represent 15% of the vehicle’s value for one year, and 10% of the vehicle’s value for a second year, according to the following terms:
- Year 1 (Apr 3, 2025 – Apr 30, 2026):
Manufacturers may offset 3.75% of the total MSRP value of U.S.-assembled vehicles. - Year 2 (May 1, 2026 – Apr 30, 2027):
Manufacturers may offset 2.5% of the total MSRP value.
Eligibility & Conditions:
- Applies only to vehicles finally assembled in the U.S.
- Offset can only be used to reduce tariff liability on that manufacturer's automobile parts under Proclamation 10908.
- Offset cannot be used to reduce other tariff obligations or exceed total eligible tariff liability.
- Manufacturers decide which importers (including suppliers) may use the offset.
Within 30 days of the date of the Executive Order, manufacturers seeking an import adjustment offset shall begin the application process. The following information will be required:
- Projected number of U.S.-assembled vehicles and their plant locations.
- Estimated tariff costs (direct and from suppliers) due under Proclamation 10908.
- Total offset amount requested.
- List of importers of record eligible to use the offset, with assigned amounts.
- A signed certification from a senior officer affirming the accuracy of the submission.
Once verified, the Secretary will approve the application and notify U.S. Customs and Border Protection (CBP), which will apply the offset to the designated importers' tariff liabilities using its standard procedures.
The Secretary, in coordination with Treasury and CBP, will issue necessary rules, guidance, and standards for U.S. content verification and certification validation. HTSUS modifications may also be made if needed.
CBP will begin applying approved offsets and may request additional information from importers as needed to implement the offset program.
Importers who claim or receive more offset than approved may face maximum monetary penalties under the law.
As of 12:00 PM EST on 5/2/2025, we are still pending an additional CSMS on filing instructions for current entries impacted by the Executive Order.
References:
5) Reminder: De Minimis Restrictions for China and Hong Kong Effective May 2, 2025
Effective today, de minimis shipments originating from China and Hong Kong are no longer permitted in accordance with current trade regulations.
Starting at 12:01 a.m. Eastern Daylight Time on May 2, 2025, goods originating from China and Hong Kong will no longer be eligible for the “de minimis” duty exemption under 19 U.S.C. § 1321(a)(2)(C). This change is in accordance with Executive Order 14256 of April 2, 2025, as amended. Any requests for de minimis entry or clearance for ineligible shipments will be denied.
Trade filers are strongly urged not to submit manifests or entries for de minimis processing for any shipment that:
- Contains items described in Section 2(a) of Executive Order 14195, as amended,
- Originates from China or Hong Kong, and
- Is scheduled to arrive on or after May 2, 2025, at 12:01 a.m. EDT.
Such shipments will be rejected for de minimis clearance starting at that time.
Reference:
6) Section 232 Steel and Aluminum Tariff Inclusions Process
The Bureau of Industry and Security issued an Interim Final Rule to establish the Section 232 inclusions process, as required by the Inclusions Proclamations.
The Bureau of Industry and Security (BIS) issued an Interim Final Rule (IFR) to implement the Section 232 inclusions process as required by the Inclusions Proclamations. These proclamations mandate that the process be established within 90 days—no later than May 10, 2025.
This IFR serves two main purposes:
- It formally creates the Section 232 inclusions process.
- It removes outdated regulatory provisions related to the Section 232 aluminum and steel exclusions process, which ended on February 10, 2025, making those regulations no longer necessary.
As part of this new process, BIS will open a two-week submission window three times per year—beginning of May, September, and January—to receive inclusion requests for aluminum and steel derivative products from industry. The first window opened on May 1, 2025.
A valid submission must include:
- Applicant identification.
- Clear definition and HTSUS code of the derivative article.
- Explanation of why it qualifies as a steel/aluminum derivative, including content value estimates.
- Domestic industry impact and relevant statistics.
- National security justification.
- A public version if confidential information is included.
BIS will review requests during the submission window. If incomplete, the applicant may get 48 hours to correct errors at the Under Secretary’s discretion.
Valid requests are posted publicly for a 14-day comment period on regulations.gov, launching a 60-day review timeline.
The Rule is effective April 30, 2025. Comments must be received no later than June 16, 2025. Further details and information on how to submit comments can be found in the Federal Register.
Reference:
7) US Customs and Border FAQs – Updated on a regular basis
US Customs and Border Protection has FAQ sites designated to responding to questions and providing clarity to the trade on specific topics and ambiguities submitted to CBP for clarification.
US Customs and Border Protection has FAQ sites designated to responding to questions and providing clarity to the trade on specific topics and ambiguities submitted to CBP for clarification.
Below are links to each FAQ:
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