For more insights and analysis from Cleary lawyers on policy and regulatory developments from a legal perspective, visit What to Expect From a Second Trump Administration.
The Trump administration issued a series of executive orders in late July and early August 2025, implementing substantial tariff increases on imports from numerous countries. These developments represent an escalation from the initial reciprocal tariff framework established in April 2025 (discussed here), with new measures targeting specific countries for distinct policy reasons. The comprehensive nature of these orders, affecting approximately 70 countries with reciprocal tariff rates ranging from 10% to 41%, alongside varying country-specific tariffs reaching as high as 40% for Brazil, 35% for Canada, and 25% for India, likely will have a major impact on global supply chains and international commerce.
U.S. importers should pay careful attention to their due diligence and compliance procedures, particularly to ensure proper country-of-origin determinations and HTSUS classifications for imported items, as certain goods may be eligible for exclusions from the tariffs. U.S. importers also should implement monitoring systems to detect red flags that may indicate possible transshipment or evasion.
Updated Reciprocal Tariffs
On July 31, 2025, President Trump issued an executive order pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (“IEEPA”) (the “Updated Order”) modifying the reciprocal tariffs established in Executive Order 14257 from April 2, 2025 (the “Original Order”). The Updated Order further revises the Harmonized Tariff Schedule of the United States (“HTSUS”) to implement country-specific tariff rates for approximately 70 countries ranging from 10% to 41%, as detailed in Annex I to the Updated Order, with most rates falling between 15% and 25%. Notable provisions include a structure for European Union-origin goods whereby the tariff rate will equal 15% for goods currently subject to general rates of duty below 15% (i.e., goods with a general rate of duty currently below 15% will face a reciprocal tariff equal to 15% minus the general rate of duty, and goods subject to general rates of duty equal to or above a 15% general rate of duty will have a 0% reciprocal tariff). With certain exceptions,[1] countries not specifically listed in Annex I to the Updated Order will be subject to the existing default 10% reciprocal tariff imposed by the Original Order. Countries involved in ongoing trade agreement negotiations with the United States (Cambodia, the European Union, Indonesia, Japan, Mexico,[2] the Philippines, Pakistan, South Korea, Thailand, Vietnam, and the United Kingdom) are subject to tariffs as set out in the Updated Order until subsequent executive orders are issued.
The Updated Order introduces a 40% penalty on the value of goods determined to be transshipped to evade duties and requires the Secretaries of Commerce and Homeland Security, acting through the Commissioner of U.S. Customs and Border Protection (“CBP”), in consultation with the United States Trade Representative (“USTR”), to produce a biannual publication of a list of countries and “specific facilities” involved in circumvention of tariffs. Although “specific facilities” is not defined, we expect that the list will identify certain facilities (such as manufacturing facilities) or entities that have been found to transship goods. Additionally, the Updated Order warns of increased tariffs if countries retaliate and provides for potential modification of tariff rates if countries take adequate steps to address the emergency declared in the Original Order (including “asymmetries in trade relationships”).
The Updated Order maintains the exceptions initially implemented in the Original Order, including certain steel, aluminum goods, automobile and automotive parts, and other goods subject to additional duties imposed pursuant to Section 232 of the Trade Expansion Act of 1962 (“Section 232”); products listed in Annex II of the Original Order (such as copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products); goods listed in 50 U.S.C. 1702(b) (including certain communication and information goods and humanitarian donations); all goods from Cuba, North Korea, Russia, and Belarus; and all goods that may become subject to duties pursuant to future actions under Section 232. The new reciprocal tariff rates took effect on August 7, 2025, subject to limited exceptions for goods already in transit on that date.
In conjunction with this development, President Trump suspended the duty-free de minimis exemption for imports from all countries regardless of value, country of origin, mode of transportation, or method of entry (with specific provisions for shipments sent through the international postal network).
Brazil
On July 30, 2025, President Trump issued an executive order declaring a national emergency concerning Brazil (the “Brazil Order”), pursuant to IEEPA, citing actions by the Brazilian government that interfere with the U.S. economy and its national security interests. The Brazil Order specifically references Brazilian Supreme Court Justice Alexandre de Moraes, accusing him of abusing his judicial authority by engaging in politically motivated acts, such as police raids, arrests, bank account freezes, censorship of U.S. persons and companies, substantial fines on U.S. companies, and threats of criminal prosecution against U.S. executives. The Brazil Order also indicates that Brazil is engaging in the political persecution of former President of Brazil, Jair Bolsonaro through unjustified criminal charges and characterizes the actions by the government of Brazil as undermining the rule of law and threatening Brazil’s ability to hold free and fair elections in 2026.
To address the declared emergency, President Trump imposed a 40% ad valorem duty on most Brazilian-origin goods imported into the United States, which took effect on August 6, 2025. The 40% tariff applies in addition to other applicable duties, including the existing 10% reciprocal tariffs on products of Brazil imposed under the Updated Order.
The new tariffs are subject to certain exemptions for goods in transit, goods subject to tariffs under Section 232, or goods covered by 50 U.S.C. 1702(b), consistent with exemptions afforded under similar prior orders. Unlike many of the prior tariff-related orders, however, the Brazil Order also contains a long list of 8-digit HTSUS codes that are excluded from the additional 40% tariffs imposed by the Brazil Order. 10% reciprocal tariffs and other applicable tariffs may still apply to those products though.
Canada
On July 31, 2025, President Trump signed an executive order increasing tariffs on certain Canadian-origin goods citing Canada’s failure to cooperate in curbing fentanyl and other illicit drugs entering the United States (the “Canada Order”). Specifically, the Canada Order increased tariffs from 25% to 35% on articles of Canada, effective on August 1, 2025, with limited exceptions for goods already in transit. As indicated in previous executive orders relating to Canada, Canadian-origin goods that qualify for duty-free entry under the United States-Mexico-Canada Agreement (“USMCA”) and goods covered by 50 U.S.C. 1702(b) are exempt from these additional tariffs. However, unlike the reciprocal tariffs and tariffs imposed under the Brazil Order, tariffs imposed pursuant to Section 232 will continue to apply to articles of Canada, stacking on top of the 35% tariffs imposed by the Canada Order.
Like the Updated Order, the Canada Order imposes a 40% penalty on the value of goods determined to be transshipped to evade duties and likewise requires biannual publication of a list of countries and “specific facilities” involved in circumvention of tariffs.
India
On August 6, 2025, President Trump issued an executive order imposing an additional 25% tariff on Indian-origin goods in response to determining that the Government of India is currently directly or indirectly importing Russian oil (the “India Order”). The tariffs imposed under the India Order will be in addition to existing duties on Indian-origin goods (including 25% reciprocal tariffs imposed by the Updated Order). Similar to previous orders, goods are excepted if they are subject to existing or future actions under Section 232, are covered by 50 U.S.C. 1702(b), or are listed in Annex II of the Original Order (as described above). The India Order will become effective on August 27, 2025, with limited exceptions for goods already in transit.
The India Order also establishes a monitoring system requiring the Secretary of Commerce to identify other countries importing Russian oil, and make recommendations for potential similar actions.
* * *
Cleary’s international trade team is continuing to track developments on the Trump administration’s tariff policy and is available to provide guidance on navigating the impact of the Trump administration’s tariffs.
[1] The Updated Order did not impose tariffs on China. On August 11, 2025, President Trump issued an executive order extending the suspension of additional tariffs on Chinese imports that was originally scheduled to expire on August 12, 2025 (the “China Order”). The China Order continued the suspension until November 10, 2025 and cited ongoing discussions with China as the basis for this extension, indicating that China continues to take “significant steps toward remedying non-reciprocal trade arrangements and addressing the concerns of the United States relating to economic and national security matters.”
[2] On July 31, 2025, President Trump announced a 90-day grace period for Mexico, indicating that “Mexico will continue to pay a 25% fentanyl tariff, 25% tariff on cars, and 50% tariff on steel, aluminum, and copper.”