Modifying Reciprocal Tariff Rates To Reflect Discussions With the People's Republic of China
Executive Order 14298, signed by President Donald J. Trump, uses emergency powers to modify reciprocal tariff measures in light of ongoing discussions with the People’s Republic of China. The core effect is to temporarily suspend or reduce the elevated ad valorem duties previously imposed on PRC-origin goods and to adjust tariff classifications for low-value shipments. Specifically, for entries from the PRC (including Hong Kong and Macau), the order establishes a 10% additional ad valorem duty for 90 days starting May 14, 2025, by suspending 24 percentage points of the higher rates. It also reorganizes certain tariff lines (HTSUS) and reduces the “low-value” duty rates (the de minimis portion) from 120% to 54% for those shipments, while preserving a per-postal-item duty of $100. The adjustments are designed to reflect progress in discussions with China and to balance national emergency tariff objectives with ongoing trade conversations. In short, the order lowers the punitive tariff burden on PRC-origin goods for a 90-day window, simplifies some tariff headings to reflect those changes, and lowers the de minimis threshold for small-value imports, all while preserving authority for agencies to implement the measures and ensuring compliance with existing laws.
Key Points
- 1Suspension of country-specific duties: Beginning May 14, 2025, a 10% additional ad valorem duty applies to all articles imported from the PRC (including Hong Kong and Macau), subject to exceptions in EO 14257 and related memoranda. This reflects a suspension of 24 percentage points of the previously modified higher rate for 90 days.
- 2Tariff modification to HTSUS: Modifies certain tariff headings (notably 9903.01.25 and 9903.01.63) and related U.S. notes, replacing some previously high duty rates (previously 125%) with a reduced 34% rate, with a 90-day suspension for specific provisions, effective May 14, 2025.
- 3De minimis tariff decrease: Reduces the general high-rate duty for low-value imports (per EO 14256, as modified by later orders) from 120% to 54%, effective May 14, 2025. The per-postal-item duty of $100 remains in place unless later revised.
- 4Implementation and scope: Agencies (Commerce, Homeland Security, U.S. Trade Representative, and others) are instructed to implement these changes, including possible temporary suspensions or amendments to regulations in the Federal Register, and to coordinate with other federal offices as needed.
- 5Duration and context: The changes are tied to ongoing trade discussions with the PRC and are framed as addressing a national emergency and concerns about economic and national security. The order specifies that it should be applied consistent with law and available appropriations.