The U.S. government has recently taken significant steps to reshape its trade policy by introducing a new tariff system. This overhaul is already profoundly impacting global trade and the e-commerce landscape. Below is a summary and analysis of these recent changes.
Latest tariff developments (April 10)
Following US President Donald Trump’s “Day of Liberation” speech on April 2, 2025, the United States announced a new tariff policy aimed at so-called “fair trade”. The initial plan includes:
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- General base tariff: Starting April 5, a 10% base tariff will be imposed on goods imported from almost all countries except Canada, Mexico, and previously sanctioned countries. Goods worth less than 800 US dollars will also be exempt from the base tariff.
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- Reciprocal tariffs: Starting on April 9, an additional “reciprocal” tariff ranging from 11% to as high as 50% was imposed on approximately 60 to 90 countries (the exact number varies slightly depending on the source) on top of the 10% base tariff.
However, the situation took a dramatic turn on April 9. In the face of a strong market reaction and opposition from allies, the Trump administration announced a 90-day suspension of reciprocal tariffs on most countries, and the tariff rates for these countries temporarily returned to the base level of 10%.
It is worth noting that China was not included in this suspension. Instead, the US government announced on April 9 that it would increase the tariff rate on Chinese goods exported to the United States to 125%, with immediate effect.
Previously, mutual retaliation between the United States and China led to several rounds of escalating tariffs. Initially, the US imposed a 34% reciprocal tariff on Chinese goods, prompting China to counter with an equivalent increase on US products immediately. The US later added an extra 50% tariff—bringing its reciprocal rate on Chinese imports to 84%—and China announced that it would match this with an 84% counter-tariff. Combined with the pre-existing tariff of roughly 20%, some Chinese products were burdened with a total tariff rate of about 104% before the new policy was introduced on April 9. The latest escalation, raising the rate to 125%, marks an even more dramatic increase.
International reaction
China’s Ministry of Commerce has confirmed that it will impose retaliatory tariffs of 84% on US goods. It has said it will impose stricter restrictions on the export of rare earths and sanction more US companies. The European Union also announced on April 9 that it would impose retaliatory tariffs on US goods worth more than $22 billion (including soybeans, motorcycles, and beauty products), deeming the US tariff measures “unreasonable and destructive.”
Overview of reciprocal tariffs for various countries
The reciprocal tariffs initially announced were intended to reflect the level of tariff and non-tariff barriers that the United States believed other countries imposed on its exports.
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- The initial plan (now suspended for most countries) was to impose a tariff of 11% to 50% on top of the base rate of 10% for about 60-90 countries.
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- Some examples of the original rates are Cambodia (49%), Vietnam (46%), India (26%), the EU (20%), Japan (24%), South Korea (25%), and China (initially 34%, later escalated to 84%).
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- The initial plan (now suspended for most countries) was to impose a tariff of 11% to 50% on top of the base rate of 10% for about 60-90 countries.
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- Current status (after April 9):
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- China: subject to specific tariffs of up to 125%.
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- Most other countries: The scheduled suspension of additional reciprocal tariffs is extended by 90 days, and only the base tariff (if previously applicable) of 10% will be applied for the time being.
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- Canada and Mexico: These countries are exempt from the 10% base tariff and reciprocal tariffs, but some products (e.g., steel and aluminium) may still be subject to other specific tariffs.
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- Goods under $800: As of May 2, goods from China with a low value (under $800) will lose their duty-free status. Low-value goods from other countries currently enjoy duty-free treatment.
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- Current status (after April 9):
| Country | U.S. Reciprocal Tariff | IEEPA Tariffs | Baseline T&D Calculation | De Minimis Status |
| China | 125% | 20% | By HS Code | T86 Entry Ends May 2, 2025 |
| Canada | – | 25% | By HS Code | Tariff Free Under $800 |
| Mexico | – | 25% | By HS Code | Tariff Free Under $800 |
| Cambodia | 49% | By HS Code | Tariff Free Under $800 | |
| Vietnam | 46% | By HS Code | Tariff Free Under $800 | |
| Thailand | 36% | By HS Code | Tariff Free Under $800 | |
| Taiwan | 32% | By HS Code | Tariff Free Under $800 | |
| Indonesia | 32% | By HS Code | Tariff Free Under $800 | |
| India | 26% | By HS Code | Tariff Free Under $800 | |
| South Korea | 25% | By HS Code | Tariff Free Under $800 | |
| Japan | 24% | By HS Code | Tariff Free Under $800 | |
| Malaysia | 24% | By HS Code | Tariff Free Under $800 | |
| European Union | 20% | By HS Code | Tariff Free Under $800 | |
| Philippines | 17% | By HS Code | Tariff Free Under $800 | |
| Singapore | 10% | By HS Code | Tariff Free Under $800 | |
| Australia | 10% | By HS Code | Tariff Free Under $800 | |
| United Kingdom | 10% | By HS Code | Tariff Free Under $800 | |
| New Zealand | 10% | By HS Code | Tariff Free Under $800 |
Impact on importers
These tariff policies have a significant impact on import-dependent businesses, especially e-commerce sellers:
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- Costs rise sharply: Tariffs are ultimately paid by importers and are likely to be passed on to wholesalers, retailers and, ultimately, consumers. These tariffs could lead to an average annual expenditure of $2,100 for US households.
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- Margin squeeze and supply chain uncertainty: For businesses sourcing goods from high-tariff countries (especially China), the significant increase in import costs will severely squeeze profit margins and create supply chain uncertainty.
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- End of China goods de minimis exemption: The popular Section 321 provision, which allows goods valued at less than $800 to enter the US duty-free, will no longer apply to goods of Chinese (including Hong Kong) origin or manufacture from May 2, 2025. Even small orders will face tariffs and possible handling fees when imported from China, significantly increasing costs. Low-value goods from other countries are currently not affected. [
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- Postal and express delivery channel differences: For shipments from China above $800 via postal channels (such as USPS), they may face a new 90% ad valorem tax or a fixed fee of $75 per piece (this fee is scheduled to increase to $150 on June 1). For shipments transported by non-postal express delivery services such as UPS, FedEx, and DHL, the applicable base and specific country tariffs (currently 125% for China) are calculated based on the country of origin and HS code.
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- Reassess the supply chain: Companies are forced to re-evaluate their procurement strategies. They may need to diversify their supply chains to reduce dependence on a single high-tariff country or consider relocating production and warehousing to the United States or other low-tariff regions.
Timeline for the new reciprocal tariffs to take effect
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- April 2, 2025: President Trump announces the new tariff policy, calling it the “Day of Liberation”.
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- April 5, 2025: A general % base tariff of 10% takes effect for all countries, with a few exceptions, such as Canada and Mexico.
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- April 9, 2025: Additional reciprocal tariffs (11%-50%) take effect for 60-90 countries.
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- April 9, 2025 (same day): The US government announces a 90-day moratorium on reciprocal tariffs for most countries except China, and the tariff rate reverts to the 10% base rate. At the same time, tariffs on Chinese goods will be increased to 125%, effective immediately.
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- April 9-10, 2025: China confirms that it will increase retaliatory tariffs to 84%; the EU announces that it will impose retaliatory tariffs on US goods.
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- May 2, 2025: Section 321 duty-free policy for low-value (less than $800) goods from China (including Hong Kong) ends.
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- June 1, 2025: The fixed handling fee for postal shipments from China valued at more than $800 may increase from $75 to $150 per shipment.
How are the tariff rates calculated?
The US government says that the reciprocal tariff rates are determined not only based on the tariff levels other countries impose on US goods but also consider non-tariff barriers such as regulatory restrictions, customs process efficiency, VAT rates, and other factors. There have been reports that a simplified formula is used: the value of US exports to a country minus the value of imports from that country, divided by the value of imports from that country, divided by two. President Trump has said that even these reciprocal tariffs are only half of the taxation the other country imposes on the US.
Major countries affected by reciprocal tariffs
The initially announced reciprocal tariff policy has a broad scope and covers many of the United States’ long-term trading partners.
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- Major affected economies (before the suspension): China, the European Union, Vietnam, India, Japan, South Korea, Taiwan, Thailand, Malaysia, etc., are all on the list and face additional tariffs on top of the base rate of 10%.
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- Current primary focus: Following the April 9 policy adjustment, China is the only major economy facing a very high specific tariff (125%). Most other countries have temporarily returned to the 10% base tariff (if applicable).
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- High tariff countries (before suspension): Countries such as Cambodia (49%), Vietnam (46%), and India (26%) were initially planned to face higher reciprocal tariffs.
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- Exemptions and exceptions: Canada and Mexico are largely unaffected by these new tariffs. In addition, certain goods such as key minerals, wood products, and pharmaceuticals may be exempted. Existing free trade agreements (such as USMCA) are somewhat impacted and may still be taxed unless the goods strictly meet the “rules of origin.”
How can Hongocean simplify and save costs in a complex tariff environment?
In today’s complex and ever-changing tariff environment (e.g., the recent reciprocal tariff policy implemented by the United States against many countries), a professional freight forwarder can help companies simplify processes and save costs in the following key ways:
Professional tariff knowledge and compliance:
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- Accurate commodity classification (HS Code Classification): Freight forwarders have the expertise to determine the correct customs code (HS Code) for your goods. This is the basis for calculating customs duties, and incorrect classification can result in overpayment of responsibilities or the risk of fines. Accurate classification is crucial when rates vary according to the commodity and country of origin.
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- Knowledge of the latest regulations and rates: Customs policies change rapidly (e.g., the US recently suspended reciprocal tariffs for most countries but increased them to 125% for China). Forwarders must pay close attention to these changes to ensure that your goods comply with the latest regulatory requirements and are taxed correctly.
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- Understanding rules of origin: Especially when there are special regulations for specific countries (e.g., China), freight forwarders can help determine and prove the origin of goods to apply the correct tariff treatment and deal with changes in policies such as the “minimum tax-free amount” (e.g., Chinese goods below $800 are no longer tax-free).
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- Handling complex customs clearance documents: Agents are responsible for preparing and submitting all required documents, handling complex customs clearance procedures, and avoiding delays, detentions, and additional costs caused by incomplete or incorrect documents.
Cost optimization strategies:
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- Freight negotiations: With their volume advantages, freight forwarders can often negotiate more favorable freight rates with carriers such as shipping companies and airlines than individual companies.
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- Transportation plan optimization: They can plan the best transportation route and method (such as sea, air, multimodal transport) based on your needs (cost, timeliness) and the characteristics of the goods, balancing cost and efficiency.
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- Consolidation: For loose goods, freight forwarders can combine the goods of different customers into one container for transport, significantly reducing individual owners’ transportation costs.
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- Provide “landed cost” estimates (Landed Cost Calculation): This will help you clearly understand the total cost, including freight, insurance, tariffs, and taxes, in advance so that you can make more informed pricing and purchasing decisions.
Simplify operational processes:
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- One-stop service: As a single point of contact, the freight forwarder coordinates and manages the entire logistics chain from pick-up, booking, transport, customs clearance, and insurance to final delivery, greatly simplifying the company’s operational burden.
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- Risk management: Helps identify and manage the risks encountered in international transport, such as delays and damage to goods, and provides solutions (such as purchasing appropriate freight insurance).
Supply chain consulting:
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- When tariff barriers are high, Hongocean can also provide advice on supply chain adjustments based on its global network and market insights, such as finding alternative sourcing locations or using bonded warehouses, free trade zones, and other tools for tax planning.
- In short, in the face of a complex tariff environment, Hongocean uses its expertise, industry resources, and operational experience to ensure the smooth and compliant cross-border movement of your goods and help you control and reduce your total logistics costs in various ways.
Summary
The latest tariff policies of the United States, especially the sharp escalation against China and the temporary adjustment of policies towards other countries, have brought great uncertainty to global trade. Companies, especially cross-border e-commerce companies, need to pay close attention to policy developments, understand the tariff calculation method, assess the impact on their supply chains and cost structures, and actively seek response strategies, such as using automated tools to calculate taxes and fees, exploring diversified procurement channels, and optimizing logistics solutions, to adapt to this rapidly changing trading environment. Economists are generally concerned that these measures could trigger a broader trade conflict, push up inflation, and even lead to a global economic recession. The focus of market attention will be whether tariff policies will be adjusted again within the next 90 days and the direction of Sino-U.S. trade relations.
