Overview
On April 2, 2025, President Donald J. Trump addressed the nation from the White House Rose Garden, officially declaring "Liberation Day"—a major policy shift toward American economic independence. A new, aggressive tariff regime is now in effect, applying to all imported goods and signaling the most comprehensive overhaul of U.S. trade policy in decades.
This announcement holds profound implications for China, as well as for numerous other major U.S. trading partners.
Key Policy Highlights
1. Universal Baseline Tariff
- A 10% tariff now applies to all imported goods, regardless of country of origin.
- "This is a foundational step toward fairness and restoring American manufacturing," Trump said.
2. Country-Specific Tariffs
In addition to the 10% baseline, reciprocal tariffs are applied to countries deemed to have unfair trade practices. These additive tariffs bring total effective rates much higher—especially for Chinese exports.
Notable Country Rates (Additional to 10% Baseline):
| Country | Add-on Tariff | Total Tariff | Tariff Charged by That Country to U.S. |
|---|---|---|---|
| China | 34% | 44%–54% | 67% |
| Vietnam | 46% | 56% | 90% |
| Cambodia | 49% | 59% | 97% |
| Bangladesh | 37% | 47% | 74% |
| Sri Lanka | 44% | 54% | 88% |
| Thailand | 36% | 46% | 72% |
| Taiwan | 32% | 42% | 64% |
| Indonesia | 32% | 42% | 64% |
| India | 26% | 36% | 52% |
| South Korea | 25% | 35% | 50% |
| Japan | 24% | 34% | 46% |
| European Union | 20% | 30% | 39% |
| Pakistan | 29% | 39% | 58% |
3. Targeted Product Tariffs
- A 25% tariff will be applied to all foreign-manufactured automobiles beginning April 3, 2025.
- Similar cumulative tariffs apply to steel and aluminum imports.
4. Exemptions
Certain goods are exempt from additive tariffs (though not from the baseline 10%):
- Pharmaceuticals
- Semiconductors
- Critical raw materials unavailable domestically
5. Stated Policy Goals
According to the administration, the revenue from these tariffs will be used to:
- Lower domestic taxes
- Reduce the national debt
- Boost U.S. industry and job creation
6. Reactions & Implications
While the White House has framed these tariffs as necessary for economic sovereignty, they have drawn strong international criticism, including warnings of retaliation from major trading partners.
U.S. companies with cross-border operations—especially China-based exporters—should prepare for:
- Higher entry costs
- Customs delays
- Pricing restructures
- Regulatory uncertainty
Exhibit: Tariff Summary by Product Type (China)
| Product Type | Baseline Tariff | Additional Tariff | Total Tariff | Notes |
|---|---|---|---|---|
| General Goods | 10% | 34% | 44% | Parallel—simple addition |
| Steel Products | 10% | 25% | ~37.5% | Cumulative—taxed on taxed amount |
| Aluminum Products | 10% | 25% | ~37.5% | Same as steel |
| Automobiles | 10% | 25% | ~37.5% | Cumulative—effective April 3, 2025 |
| Fentanyl-related Products | 10% | 20% | 30% | Parallel taxation |
| Exempted Products | 10% | None | 10% | Only baseline applies |
Cumulative taxation = Tariffs layered on previous taxed amounts
Parallel taxation = Tariffs calculated separately and then added
Recommendations for Exporters
- Review existing supply contracts to assess how tariff costs will be allocated.
- Engage U.S. customs counsel to confirm applicable classification and valuation strategies.
- Evaluate supply chain relocation or diversification if based in high-tariff countries.
- Communicate transparently with downstream customers and partners on cost pass-throughs.
If your business is impacted by the U.S. tariff expansion or if you need guidance on compliance, restructuring, or U.S. customs clearance, please contact us, we are happy to provide Legal assistance.
