Tariffs: Time to Act

For many countries, newly announced reciprocal tariff rates will simply replace the Liberation Day reciprocal tariff rates that were announced on the 2^nd of April. That is, these rates will be “stacked” on top of any MFN duty rates that were applicable to products prior to the 2^nd of April. 

The EU, however, has a different framework agreement with the US. An Executive Order published on July 31st now sets a 15% tariff on products originating from the European Union. Products with an MFN tariff rate exceeding 15% will remain subject to their existing rate.

The current 50% tariff on steel and aluminium imports from the EU will remain in place.

On the 19^th of August, an additional 407 product categories were added to the list of “derivative” steel and aluminium products covered by Section 232 sectoral tariffs.  As a result, the steel and aluminium content of these products will be subject to a duty rate of 50%.

These additional codes cover wind turbines and their parts and components, mobile cranes, bulldozers and other heavy equipment, railcars, furniture, compressors and pumps, and hundreds of other products. A complete list of the 407 product categories added to the steel and aluminium tariffs is available to view here.

Effective the 29^th of August, the US will now suspend the de minimis exemption for all countries, meaning all goods, regardless of value, will be subject to applicable duties, taxes, and fees.

Imported goods shipped through channels outside of the international postal network that are valued at or under $800 (and would usually qualify for de minimis treatment) will now be subject to applicable duties, including reciprocal tariffs. 

As for goods shipped through the international postal system, transportation carriers are now required to choose one of two approved methodologies for calculating duties. Duties on packages shipped through the international postal system will now be assessed according to one of the following methods:

• Specific duty method: Countries with an effective reciprocal tariff rate of less than 16 percent, which would include the EU - will encounter a flat rate duty of $80 per item.
  • Ad valorem duty method: This imposes a duty equal to the effective reciprocal tariff. This rate will depend on the country of origin of the product (15% for the EU) and will be assessed on the value of each package. 

Based on current announcements, the specific duty method appears to be a transitional method which will only be available to transportation carriers for the next six months. After this period, all transportation carriers must apply the ad valorem method.

Yes. Certain categories will remain duty-free:

• Bona fide gifts valued at $100 or less.
• Personal items brought back by travelers up to $200.

Although the newly introduced 15% tariff presents challenges for Irish exporters, the agreement also brings a measure of clarity following a period of uncertainty. We will continue to analyse the details of the agreement to understand its full impact on Enterprise Ireland clients and the sectors most affected. We encourage all clients to continue to take proactive steps to mitigate these risks. We urge clients to contact their dedicated Enterprise Ireland Client Advisor and the Trade and Tariff Response Team to discuss their circumstances and identify relevant, available supports. Please email tradetariffs@enterprise-ireland.com for more information. 

On the 21^st of August, The US and the EU published a Framework on an Agreement on Reciprocal, Fair, and Balanced Trade. Under this agreement, effective the 1^st of September, any additional tariffs imposed under Section 232 investigations will be capped at 15% for EU-origin goods, regardless of the rate applied to other countries. 

The Harmonised Tariff Schedule (HTS) is a system to classify categories of products imported into the US. It sets out the tariff rates and statistical categories for all products imported into the US. HTS codes are 10- digit classification numbers which determine the tariff rates and duties applied to imported products. 

The US International Trade Commission offers an interactive training module to support exporters in gaining a basic understanding of the HTS, including guidance on how to read the tariff schedule.

If a product is deemed to be "made in China" and is shipped through Ireland, it will be subject to Chinese tariffs according to US rules of origin. Understanding your HTS codes is vital, as is understanding their rules of origin. It is important to distinguish where your product was technically made (i.e. The EU, China or elsewhere). 

If more than one country is involved, the country of origin is determined by where the last ‘substantial transformation’ occurred. This refers to the creation of a ‘new article with a different name, character and use.’

The country of origin is defined by US Customs and Boarder Protection as the ‘country of manufacture, production, or growth of the article.’ If more than one country is involved, the country where the last ‘substantial transformation’ occurred. 

This refers to the creation of a ‘new article with a different name, character and use’. For textiles and apparels for example, the second country is deemed to be the country of origin.

Currently tariffs only apply to physical products being imported or exported. However, we encourage all clients to engage closely with US customers, partners and suppliers as we do not know how services will be affected in the future.

This a dynamic and evolving situation, and Enterprise Ireland remains committed to supporting Irish-owned exporting companies as they navigate this shift in global trade, by providing resources, guidance, and strategic support to help client companies to mitigate the impact of tariffs. 

For detailed information on supports and how we can help you, please visit our ‘Business Supports in Response to Trade Tariffs’ webpage. 

We are also encouraging all clients to contact their dedicated Enterprise Ireland Client Advisor to discuss their situation and what options may be available to them. Contact us at tradetariffs@enterprise-ireland.com.