REGULATORY UPDATES AND TRENDS

Unofficial Tariff Tracker up to 24 February 2025 

• Why: Under the International Emergency Economic Powers Act (IEEPA) and a presidential determination, a national emergency has been declared due to drug smuggling and migration issues. Additionally, under the Trade Expansion Act of 1962, Section 232 allows the president to adjust imports that threaten national security. These tariffs are intended to enhance national security, end unfair trade practices, and stop the global dumping of steel and aluminum. 

• Who: All U.S. importers. 

• What: 

  • Active and Pending: 

    • 25% tariff on all products from Mexico (postponed to March 4, 2025). 

    • A 25% tariff on all products from Canada; energy products are subject to a 10% tariff (postponed to March 4, 2025). 

    • 10% tariff on all products from China, Hong Kong, and Macau, with no product exclusion process and elimination of de minimis duty exemptions. 

    • A 25% tariff on steel and aluminum and their derivative articles from any country of origin, effective March 12, 2025. 

    • Modified Section 232 eliminates previously negotiated arrangements and exemptions, affecting countries such as Argentina, Australia, Brazil, Canada, the European Union, Japan, Mexico, South Korea, Ukraine, and the United Kingdom. 

    • Imports of steel from Turkey remain subject to a 50% tariff. 

    • Imports of aluminum from Russia are subject to a 200% tariff. 

    • Tariffs apply unless the steel was melted and poured in the United States or the aluminum was smelted and cast in the United States. 

    • Importers of derivative steel and aluminum articles must provide U.S. Customs and Border Protection (CBP) documentation to verify origin. 

    • For derivative steel articles outside Chapter 73 of the Harmonized Tariff Schedule (HTS), tariffs apply only to steel content; for aluminum outside Chapter 76, tariffs apply only to aluminum content. 

    • Misclassification to evade duties incurs maximum monetary penalties with no mitigating factors considered. 

    • No duty drawback is available under the updated program.

  • Proposed: 

    • 02 April 2025 – Additional tariffs, starting at 25%, are threatened for sectors such as automobiles, pharmaceuticals, semiconductors, and lumber, targeting the EU, Japan, Korea, Taiwan, Canada, and Mexico. 

    • 01 April 2025 – Reciprocal tariffs under the “Fair and Reciprocal Plan” are being studied by the Office of the United States Trade Representative (USTR) to address non-reciprocal trade arrangements, examining: 

      • Tariffs imposed on U.S. products. 

      • Trading partners impose unfair, discriminatory, or extraterritorial taxes (e.g., value-added tax) on U.S. businesses, workers, and consumers. 

      • Practices deemed by the USTR, in consultation with the Treasury, Commerce, and Senior Counselor to the President for Trade and Manufacturing, to limit market access or fair competition.

      • USTR will resume Section 301 investigations into Digital Service Taxes (DSTs) of France, Austria, Italy, Spain, Turkey, and the United Kingdom and consider establishing a USMCA panel against Canada for its DST. 

      • March 24, 2025 – The USTR proposed service fees on Chinese vessel operators and Chinese-built vessels entering U.S. ports following a Section 301 investigation of China’s maritime, Logistics, and Shipbuilding Sectors.

KEY TAKEAWAYS

IEEPA tariffs and Section 232 changes are active or pending, with further negotiations ongoing with Canada and Mexico. 

To stay informed about developments, importers must closely monitor White House communications and updates in the Federal Register, as well as collaborate with brokers and supply chain partners.

Actionable Insights

• Monitoring and Collaboration: Regularly track updates from official sources and work closely with supply chain stakeholders to adapt to tariff changes. 

• Documentation Compliance: Ensure accurate origin documentation for steel and aluminum imports to avoid penalties. 

• Strategic Planning: Prepare for proposed tariffs by assessing exposure in key sectors, such as automobiles and pharmaceuticals, and explore alternative sourcing or cost mitigation strategies.

REGULATORY UPDATES & TRENDS

1. India Customs on Third-Party Invoicing under FTAs 

• Objective: Clarify the use of third-party invoicing in FTAs like the ASEAN-India Free Trade Agreement (AIFTA). 

• Key Components: On 21 October 2024, India Customs issued Instruction No. 23/2024, addressing: 

  • Denial of AIFTA preferential treatment due to mismatches between invoice value and FOB value on Form AI is not aligned with AIFTA’s legal text or most FTAs. Customs cannot deny a Certificate of Origin (COO) based on value discrepancies if Rules of Origin are met.

  • Under the Customs (Administration of Rules of Origin under Trade Agreements) Rules (CAROTAR), Customs can only request information consistent with FTA texts. They must follow the review process without requiring commercially confidential data. 

  • A speaking order to deny preferential claims requires a formal review proving non-compliance with origin criteria.

2. ASEAN-China Free Trade Area (ACFTA) 3.0 Upgrade 

• Objective: Enhance trade cooperation between ASEAN and China. 

• Key Components: Announced on 10 October 2024 at the 27th ASEAN-China Summit, the ACFTA 3.0 Upgrade negotiations are substantially concluded. New chapters include Digital Economy, Green Economy, Supply Chain Connectivity, MSMEs, and Competition and Consumer Protection. Existing chapters on Customs Procedures, Standards, Sanitary and Phytosanitary Measures, and Economic and Technical Cooperation are enhanced. Initiated by Singapore’s MTI in 2022, it aims for a full conclusion by 2025.

3. China’s Response to U.S. Tariffs 

• Objective: Counter unilateral U.S. tariffs. 

• Key Components: On February 4, 2025, China’s Customs Tariff Commission announced tariffs on select U.S. imports effective February 10, targeting goods like coal, liquefied natural gas, and agricultural machinery.

4. China’s Export Controls 

• Objective: Safeguard national security and meet international obligations. 

• Key Components: On February 4, 2025, China’s Security and Control Bureau implemented export controls on commodities like tungsten, tellurium, molybdenum, and indium, approved by the State Council, affecting high-tech industries.

KEY TAKEAWAYS

• India’s clarification on third-party invoicing aligns customs practices with FTA intent, though port-specific inconsistencies persist. 

• ACFTA 3.0 offers new trade opportunities in emerging sectors. 

• China’s retaliatory tariffs and export controls reflect escalating U.S.-China trade tensions, impacting supply chains.

REGULATORY UPDATES & TRENDS

1.    EU E-commerce and Circular Economy Rules

• On February 5, 2025, the European Commission (EC) proposed customs reforms, consumer protections, and sustainability measures targeting low-value e-commerce goods (e.g., from Temu and Shein): 

  • Remove duty exemptions for parcels under €150. 

  • Enhance enforcement with AI-driven compliance checks under the Digital Services Act (DSA) 2022 and Digital Market Act (DMA) 2022. 

  • Introduce sustainability rules via the Ecodesign for Sustainable Products Regulation (ESPR) by 2027, including Digital Product Passports.

  • Enforce the General Product Safety Regulation (GPSR) 2024 for importers and marketplaces. 

• EU Packaging and Packaging Waste Regulation  

  • Effective February 11, 2025, with obligations from August 12, 2026, it covers all packaging lifecycle stages:  

    • Importers and distributors must ensure compliance with recyclability, labeling, and substance use by 2026.  

    • Phased measures begin in 2028, with documentation retention (5-10 years) and corrective actions required. 

2. Binding Tariff Information (BTI) Guidelines  

• Revised on February 14, 2025, the BTI process offers legal certainty on tariff classification via the EBTI Trader Portal. Valid for three years, decisions face a 120-day issuance deadline, though delays occur. 

3. EU Sanctions Enforcement and Russia Sanctions (16th Package)  

• In 2024, the EU intensified sanctions, with over 1,400 investigations and €88.5 million in fines. Directive (EU) 2024/1126, effective May 2025, harmonizes enforcement. The 16th Russia sanctions package (February 2025) bans aluminum imports by 2026, and targets shadow fleet tankers, restricts financial institutions, ports, airports, airlines, video game consoles, and media outlets, and sanctions 48 officials and 35 entities. 

4. EU Deforestation Regulation Delay  

• Postponed to December 30, 2025 (large firms) and June 30, 2026 (small firms), it requires deforestation-free supply chains for commodities like cocoa and wood, with fines up to 4% of EU turnover. 

5. EU Forced Labor Regulation  

• Published December 12, 2024, effective December 2027, Regulation (EU) 2024/3015 bans forced labor products, requiring due diligence and transparency across supply chains. 

6. EU-US Trade Amid Tariff Threats  

• On February 10, 2025, the U.S. announced 25% tariffs on EU steel and aluminum (effective March 12, 2025). The EU plans retaliatory measures, despite a €48 billion trade surplus with the U.S. in 2023. Tariff negotiations remain open. 

KEY TAKEAWAYS

• New EU regulations on e-commerce, packaging, and forced labor emphasize safety, sustainability, and ethics. 

• Sanctions enforcement and Russia-specific measures increase compliance complexity. 

• U.S. tariff threats strain EU trade relations, prompting retaliatory planning.

Actionable Insights

• E-commerce Compliance: Review DSA, DMA, and GPSR obligations; prepare for ESPR sustainability rules. 

• Packaging Preparation: Assess supply chains for recyclability and labeling compliance by 2026. 

• BTI Utilization: Use the EBTI portal to ensure tariff certainty for key products. 

• Sanctions Adherence: Strengthen due diligence for Russia-related trade to avoid fines. 

• Deforestation Readiness: Conduct supply chain audits for affected commodities by 2025. 

• Forced Labor Mitigation: Implement supplier codes, audits, and training by 2027. 

• EU-US Trade Strategy: Assess steel/aluminum exposure and explore tariff negotiation benefits (e.g., LNG purchases).