U.S. Import Tariffs: Business Impact & Mitigation Strategies

History of Tariffs

While import tariffs may seem unfamiliar due to historically low rates in recent decades, they have long played a significant role in U.S. economic policy-serving purposes such as revenue generation, industry support, and protectionism. Historically, high tariffs have often coincided with periods of economic and political instability, whereas lower tariffs have typically supported international engagement and economic growth. Since World War II and the creation of GATT and the WTO, the U.S. has generally maintained lower average tariff rates.

Current Tariffs

Import and reciprocal tariffs have been central to the new Trump Administration’s trade policy. The administration states these measures are intended to support domestic industry, reduce trade deficits, address unfair trade practices, enhance national security, generate revenue, control immigration, and strengthen the U.S. negotiating position. These policies have generated significant debate regarding their overall effectiveness and economic impact.

Chart of the US Current Import Tariffs by Region and Type

How Import Tariffs Work

Import tariffs are government-imposed taxes on goods entering the United States, typically calculated as a percentage of the goods’ value (ad valorem, based on FOB value). The U.S. importer of record is responsible for paying these tariffs to U.S. Customs and Border Protection upon entry-not the foreign exporter or supplier. Importers may absorb the cost, negotiate price reductions with suppliers, or pass the expense on to customers. Ultimately, tariffs most often increase costs for U.S. businesses and consumers rather than foreign exporters.

Countries Implementing Reciprocal Tariffs Against the USA in 2025

Several countries have imposed or announced reciprocal tariffs against U.S. goods in response to the U.S. tariff increases in 2025. The status of these tariffs is dynamic, with some in effect, some temporarily suspended, and others delayed but scheduled to take effect in the coming months.

Key Countries with Reciprocal Tariffs (as of May 12, 2025)

• China: Imposed a 34% tariff on U.S. goods in April 2025, but as of May 12, both the U.S. and China have agreed to suspend most of these tariffs for 90 days. China will maintain a 10% tariff during this period.
• Canada: Implemented a 25% tariff on U.S. goods, with some sectoral exemptions (USMCA products exempt)
• European Union (EU): Announced reciprocal tariffs ranging from 4.4% to 50% on a wide range of U.S. products, scheduled to take effect July 9, 2025
• Norway, Pakistan, Philippines, South Africa, South Korea, Sri Lanka, Switzerland, Taiwan, Thailand, Tunisia, Venezuela, Vietnam, Zambia, Zimbabwe: Each has announced reciprocal tariffs on U.S. goods, generally ranging from 15% to 46%, with most set to take effect July 9, 2025
• Russia, Singapore, Spain, Turkey, United Kingdom: These countries have threatened reciprocal tariffs or are considering additional measures but have not yet fully implemented them as of May 12, 2025

How Can Import Tariffs be Mitigated

Mitigating import tariffs has become increasingly challenging. Traditional strategies such as Free Trade Agreements, Duty Drawback, and De Minimis shipments are now less accessible or less effective. Today, companies must focus on compliance and explore new methods to reduce tariff exposure, including:

• HTS Classification – Be sure your product is classified correctly.
• Value – Use the lowest value you are legally allowed to use for tariff determination - identify Assists, FOB Value, and First Sale Value.
• Country of Origin – Analyze your Supply Chain and Bill of Materials for Country-of-Origin accuracy.
• Assess and Diversify your Supply Chain – Nearshoring and Reshoring.
• Free Trade Agreements – Source from FTA’s; USMCA is still eligible to avoid most of the newest tariffs.
• Free Trade Zones – Evaluate FTZ potential for your assembly/manufacturing.
• Tariff Engineering – Explore opportunities such as modifying products or sourcing to qualify for lower tariffs or exemptions.
• Government Announced Tariff Exclusion Processes – Apply where viable, especially if no domestic alternatives exist.
• Utilize U.S. Customs Provisions (e.g., Chapters 98 and 99) – Utilize for temporary entries, repairs, or re-exports to reduce tariff liabilities.

How Can Redstone Government Consulting Assist

Redstone Government Consulting offers comprehensive services including HTS classification review, duty rate analysis, USMCA qualification verification, country of origin analysis, and tariff engineering. If you are interested in a thorough review of your import processes, please contact us to discuss how we can assist your business.