Summary
Recent tariff policy changes have had significant implications on the global supply chain. From the recent executive order on reciprocal tariff rates to the imposition of new Section 232 tariffs on copper products, the average tariff rate on merchandise imported into the United States reached 18.3%, the highest since 1934.1
With tariff pressure likely to persist and enforcement escalating, companies should avoid hasty operational shifts. Instead, they should maintain adaptable plans that can be leveraged when the timing is right. Strategic foresight, informed decision-making, and risk awareness are essential as trade policy continues to evolve as a central tool of diplomatic and economic strategy.
Copper Tariffs
On July 30, 2025, Proclamation 10962 was published which implemented 50% tariffs on semi-finished copper products (pipes, wires, rods, sheets, tubes) and copper-intensive derivatives (fittings, cables, connectors, electrical components), effective August 1 under Section 232 (19 U.S.C. § 1862) of the Trade Expansion Act of 1962. Copper input materials (ores, concentrates, cathodes, anodes) and scrap remain exempt from both Section 232 (19 U.S.C. § 1862) and reciprocal tariffs. The tariffs only apply to the copper content within the products if the importer can support that amount, with non-copper content instead remaining subject to the reciprocal tariffs. The Department of Commerce was authorized to broaden the scope of the copper tariff through a product inclusion process. The Secretary of Commerce has 90 days to compile a final list of copper products and derivatives that will be covered by the tariffs. Market volatility in response to this action was severe, with copper prices initially surging 13% before falling 19% when exemptions were clarified.
De Minimis Elimination
On July 30, 2025, Executive Order 14324 terminated the $800 duty-free threshold for lower value imports, primarily from e-commerce channels, effective for all countries as of August 29, 2025. This extends the previous China/Hong Kong elimination of de minimis privilege to all other countries.2 U.S. Customs and Border Protection (CBP) processed over 1.36 billion de minimis shipments in fiscal year 2024, up from 139 million in 2015 – a 600% increase over 10 years.3 All these shipments will now be subject to formal customs entry procedures including duty calculations, origin declaration, tariff classification, and entry filings.
New civil penalties of $5,000-10,000 outlined in the One Big Beautiful Bill Act per violation take effect August 3.4 E-commerce platforms face major operational disruptions as all packages will soon require formal customs clearance where the required data may not be as readily accessible given the size and scale of those businesses.
Country Rate List (Effective August 7, 2025):
On July 31, 2025, Executive Order 14326 finalized country- specific International Emergency Economic Powers Act (IEEPA) reciprocal tariff rates with an effective date of August 7. Key U.S. trading partners such as Canada face 35% tariffs, Brazil 50% (with extensive product exemptions such as certain silicon metal, pig iron, civil aircraft and parts and components thereof, metallurgical grade alumina, tin ore, wood pulp, precious metals, energy and energy products, and fertilizers),5 while the EU and Japan separately negotiated rates around 15%. India faces 25% plus additional penalties tied to alleged activities related to Russia. Mexico received a 90- day extension to finalize a reciprocal tariff rate on non-USMCA originating merchandise, and China faces a separate 30% rate which may be subject to increase if an August 12 deadline for its current trade truce with U.S. expires without further concessions. Finally, United Kingdom, Vietnam, Philippines, Indonesia, South Korea achieved negotiated rates below original formulas through bilateral agreements.
- Canada: 35% (up from 25%)
- Brazil: 50% (extensive exemptions for airplanes, iron ore, petroleum, orange juice)
- European Union: 15% (negotiated rate) 6
- Japan: 15% (negotiated rate)
- China: 30% (separate deadline August 12)
- India: 25%, with provisions for further increases pending national security determinations 7
- Mexico: 90-day extension granted for further negotiations
- South Korea: 15% (negotiated rate)
- United Kingdom: 15% (negotiated rate)
- Additional Rates:
- 10%: Falkland Islands
- 15%: Afghanistan, Angola, Bolivia, Botswana, Cameroon, Chad, Costa Rica, Côte d'Ivoire, Democratic Republic of the Congo, Ecuador, Equatorial Guinea, Fiji, Ghana, Guyana, Iceland, Israel, Jordan, Lesotho, Liechtenstein, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Nauru, New Zealand, Nigeria, North Macedonia, Norway, Papua New Guinea, Trinidad and Tobago, Turkey, Uganda, Vanuatu, Venezuela, Zambia, Zimbabwe
- 18%: Nicaragua
- 19%: Cambodia, Indonesia, Malaysia, Pakistan, Philippines, Thailand
- 20%: Bangladesh, Sri Lanka, Taiwan, Vietnam
- 25%: Brunei, Kazakhstan, Moldova, Tunisia
- 30%: Algeria, Bosnia and Herzegovina, Libya, South Africa
- 35%: Iraq, Serbia
- 39%: Switzerland
- 40%: Laos, Myanmar (Burma)
- 41%: Syria 8
Crackdown on Transshipment
The same executive orders impose 40% additional tariffs on goods determined by CBP to have been transshipped to evade duties.9
CBP is prohibited from its normal practice of mitigating or reducing those tariffs as would be available for similar penalties. As part of the new rules Commerce and CBP must publish semi-annual lists of countries and facilities used in circumvention schemes to inform the public and support enforcement efforts. Enhanced origin verifications requirements and stricter documentation standards are now in effect across all trade lanes.
International Emergency Economic Powers Act (IEEPA)
Federal Circuit judges heard oral arguments on July 31 in the appeal from the Court of International Trade decision. Multiple judges questioned whether the International Emergency Economic Powers Act (50 U.S.C. §§ 1701–1702) authorizes tariffs at all, noting the statute mentions “foreign exchange payments, currency” but never explicitly mentions tariffs. In May 2025, the original 3–0 CIT ruling in V.O.S. Selections v. United States rejected the government’s claim that IEEPA implicitly authorizes tariffs, concluding that such an interpretation would overstep the statute’s intended scope and infringe on Congress’s constitutional authority over trade. Arguments were scrutinized for both the original plaintiffs and the Department of Justice, but the judges did seem to lean in favor of the plaintiffs based on the tone and nature of questioning.
A decision from the Court of Appeals for the Federal Circuit could come as soon as August and may determine whether the IEEPA tariff framework survives constitutional scrutiny. Regardless of the outcome, the case is almost certain to be petitioned for review by the Supreme Court.
Key Monitoring Points
Federal Circuit Decision: Expected in August or September 2025, the appellate decision could invalidate billions in IEEPA tariffs collected thus far and initiate what will certainly be a complex process for refunds. Monitor V.O.S. Selections v. Trump case developments. Further expect an appeal to the Supreme Court by the losing party.
China Trade Deadline, August 12: A subsequent 90-day extension was granted to stay the planned August 12 expiration of the deadline for China tariff negotiations, which would have affected the 30% IEEPA reciprocal rate and the broader U.S. – China trade relationship. November is the new timeline for progress on these negotiations.
CBP Guidance: Watch for transshipment enforcement details, de minimis implementation guidance and potentially formal refund procedures, through CSMS notices.10,11
Country Rate Changes: Monitor ongoing trade negotiations as rates can change rapidly.
What to Expect
Importers should prepare for continued volatility and enforcement escalation in the coming months. The Federal Circuit decision represents the most significant legal threat to the current tariff regime. However, the administration has signaled it will pursue alternative legal authorities if IEEPA fails, meaning tariff pressures are likely to persist regardless of judicial outcomes.
It is advisable to avoid making hasty strategic changes with long-term consequences until there is greater clarity on the evolving tariff landscape. Staying informed and maintaining flexibility will be key.
CBP enforcement activity will quickly escalate, particularly around transshipment, origin, and classification issues, where penalties may carry more severe financial consequences with fewer mitigation options. The August 29 de minimis elimination will introduce operational challenges as both the trade community (including freight forwarders and customs brokers) and CBP adjust to processing a higher volume of entries—potentially leading to delays and supply chain disruptions.
Companies should be prepared for evolving policy changes, shifting country rates tied to ongoing negotiations, and more complex compliance requirements as trade policy continues to serve as a key tool for diplomatic and economic strategy.
Sources:
1 The Budget Lab at Yale, State of U.S. Tariffs: August 1, 2025
2 One Big Beautiful Bill Act, Chapter 5, Subchapter C, Section 70531
3 U.S. Customs and Border Protection, “CBP Proposes New Rule to Strengthen Enforcement and Limit Duty Exemption for Low-Value Shipments,” U.S. Customs and Border Protection, January 17, 2025,
4 One Big Beautiful Bill Act, Section 70531
5 Executive Order 14323 of July 30, 2025: Addressing Threats to the United States by the Government of Brazil.
6 This 15% rate functions as a cap under the reciprocal tariff framework. For EU-origin goods with a Column 1/General duty rate ≥ 15%, no additional reciprocal tariff applies (file under HTSUS 9903.02.19). For goods with a Column 1/General duty rate < 15%, a reciprocal tariff is added to bring the total to 15% (file under HTSUS 9903.02.20).
7 Executive Order 14329 of August 6, 2025: Addressing Threats to the United States by the Government of the Russian Federation.
8CSMS #64680374 – Guidance: Reciprocal Tariffs
9 Executive Order 14257, Further Modifying the Reciprocal Tariff Rates, July 31, 2025
10 CSMS #65829726 – GUIDANCE: Reciprocal Tariff Updates Effective August 7, 2025, U.S. Customs and Border Protection
11 CSMS #65807735 – GUIDANCE: Additional Duties on Imports from Brazil, U.S. Customs and Border Protection
