On July 31, 2025, the White House issued Executive Order 14298 to address persistent trade imbalances that pose national security and economic risks. Building on Executive Order 14257 of April 2, 2025, this action reflects updated recommendations from senior officials regarding non-reciprocal tariff rates, non-tariff barriers, and the defense industrial base. It reaffirms the national emergency declared earlier and provides a framework to align U.S. trade relationships with strategic interests and to incentivize bilateral commitments.
WHAT IS THE SCOPE OF THE MODIFIED RECIPROCALÂ TARIFF RATES?
At 12:01 a.m. eastern daylight time, August 7, 2025, the Harmonized Tariff Schedule of the United States (HTSUS) will be updated as specified in Annex II of the executive order. All goods entered for consumption, or withdrawn from the warehouse for consumption, on or after that date will be subject to revised ad valorem duties.
Shipments loaded and in transit before the cutoff, and entered by October 5, 2025, will retain the previously imposed rates.
The revised tariff schedule is as follows:
DO THESE TARIFFS APPLY DIFFERENTLY TO EUROPEAN UNION PRODUCTS?
For European Union imports, the additional duty is calibrated against the Column 1 (General) rate under the HTSUS. Where the Column 1 rate is below 15%, the combined rate will be set at 15%. Where the Column 1 rate is 15% or higher, no additional duty applies. This ensures a floor that addresses disparities while respecting existing tariff structures.
HOW ARE TRANSSHIPMENT PENALTIES STRUCTURED?
To deter duty evasion, U.S. Customs and Border Protection (CBP) will impose a 40% additional rate on goods transshipped to avoid applicable duties, plus any fines and penalties under 19 U.S.C. 1592. Mitigation or remission of these penalties will not be permitted. Every six months, Commerce and Homeland Security will publish lists of countries and facilities implicated in circumvention schemes to support public procurement reviews and due diligence.
WHITE HOUSE FACT SHEET: President Donald J. Trump Further Modifies the Reciprocal Tariff Rates
EXECUTIVE ORDER: Further Modifying the Reciprocal Tariff Rates
WHAT NEXT STEPS SHOULD U.S. IMPORTERS TAKE FOR COMPLIANCE?
U.S. importers and supply chain managers should review the executive order and fact sheet to determine potential tariff risk.
Additionally, importers should:
- Review the updated HTSUS modifications in Annex II to confirm applicable duty changes for your product lines.
- Verify whether shipments in transit qualify for the prior tariff regime through October 5, 2025
- Assess contracts and pricing models to incorporate revised ad valorem rates effective seven days after July 31
- Update compliance procedures and training for transshipment risk management and record-keeping
- Engage with customs brokers and trade counsel to ensure alignment with new enforcement provisions and monitoring requirements.
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