Updated: April 10, 2025
Understanding Key U.S. Tariffs: Section 201, Section 232, & Section 301
As global trade continues to evolve, tariffs remain a critical factor shaping the strategies of businesses engaged in international trade. With the recent implementation of new tariffs by the Trump administration and ongoing updates to existing trade policies, understanding their implications has never been more essential. Below is a comprehensive overview of the key tariffs and their impacts, along with how J.M. Rodgers can help your business mitigate these challenges through expert duty drawback services.
Section 201 Tariffs: Protecting Domestic Industries
Overview: Initiated in February 2018 under the Trade Act of 1974, Section 201 tariffs aim to safeguard U.S. industries from injury caused by increased imports.
Implementation: Initially applied to solar cells, panels, and washing machines, with periodic updates and specific exclusions for certain products.
Drawback Eligibility: Products subjected to Section 201 tariffs are eligible for duty drawback refunds when exported, allowing businesses to recover a significant portion of their paid duties.
Section 232 Tariffs: Ensuring National Security
Overview: First introduced on March 23, 2018, under the Trade Expansion Act of 1962, Section 232 tariffs address national security concerns by limiting steel and aluminum imports to bolster domestic production.
Implementation:
- Expanded Scope: In March 2025, the Trump administration expanded Section 232 tariffs to include additional products such as automobiles and auto parts. The tariffs on automobiles took effect on April 3, 2025, and those on auto parts are scheduled to begin no later than May 3, 2025.
Drawback Eligibility: Unfortunately, Section 232 tariffs remain ineligible for duty drawback refunds, even if the products are exported or destroyed.
Section 301 Tariffs: Countering Unfair Trade Practices
Overview: These tariffs, the most extensive in scope, were enacted under the Trade Act of 1974 to address unfair trade practices. They primarily target goods originating from China.
Implementation:
- Increased Rates: As of April 9, 2025, the Trump administration increased tariffs on Chinese imports to 125%, citing China’s retaliatory actions and ongoing trade imbalances.
Drawback Eligibility: When exported, products subject to Section 301 tariffs are eligible for duty drawback refunds, which allow businesses to recapture tariff costs.
Universal and Reciprocal Tariffs
Overview: On April 2, 2025, President Trump declared “Liberation Day,” announcing a series of new tariffs aimed at promoting U.S. manufacturing and addressing trade imbalances.
Implementation:
- Universal Tariff: A baseline 10% tariff on all imports into the United States, effective April 5, 2025.
- Reciprocal Tariffs: Higher tariffs on approximately 60 countries, with rates varying based on existing trade practices. For example, imports from China face an additional 34% tariff, totaling a 54% tariff rate when combined with existing measures.
Recent Developments:
- 90-Day Pause: On April 9, 2025, President Trump announced a 90-day pause on the implementation of the reciprocal tariffs for most countries, reducing the immediate impact on U.S. trading partners. However, this pause does not apply to China, which now faces an increased tariff rate of 125% on its imports to the United States.
Drawback Eligibility: The eligibility for duty drawback on these new tariffs varies and requires careful analysis to determine potential refunds.
Changes to De Minimis Exemptions
Overview: The U.S. Customs and Border Protection (CBP) has proposed changes affecting the de minimis exemption, which allows low-value shipments (valued at $800 or less) to enter the U.S. duty-free.
Implementation:
- Proposed Rule Changes: On April 2, 2025, President Trump issued an executive order eliminating the de minimis duty exemption for imports from China and Hong Kong, effective May 2, 2025. The administration plans to extend this elimination to other countries once systems are in place to collect the duty revenue, with few exceptions.
Why Choose J.M. Rodgers for Duty Drawback Services?
Navigating the complexities of tariff regulations requires expertise, precision, and the right tools. J.M. Rodgers offers unparalleled service to help businesses maximize their duty drawback opportunities:
- Custom Solutions: Our proprietary software and Six Sigma-certified processes ensure accurate and compliant duty drawback claims, even for complex scenarios.
- Expertise in All Drawback Types: Whether it’s Manufacturing Drawback, Unused Drawback, or Destruction Drawback, our dedicated team of licensed customs brokers and specialists has the expertise to recover your tariff costs.
- Supply Chain Optimization: We analyze your supply chain to uncover hidden refund opportunities, such as domestic receipts and exporting customer sales.
- Audit Support: Our internal audit processes mimic U.S. Customs’ reviews, ensuring compliance and preparedness for any inquiries.
- Proactive Monitoring: We continuously monitor regulatory updates, including the recent implementation of new tariffs and proposed changes to de minimis exemptions, enabling us to adapt your drawback strategies in real time.
Stay Ahead of Recent Tariff Changes
The recent implementation of new tariffs, including the universal and reciprocal tariffs announced on April 2, 2025, and the proposed changes to de minimis exemptions, underscores the need for proactive planning. J.M. Rodgers is your trusted partner in navigating these challenges, ensuring your business remains competitive in the global marketplace.
For a detailed consultation on how these tariffs may impact your operations and how our duty drawback services can maximize your refund opportunities, please fill out the contact form below, and our team will contact you promptly.
