The Biggest Tariff Shock in a Century
In early 2025, the United States launched the most sweeping tariff expansion since the Smoot-Hawley Tariff Act of 1930. By March 2026, virtually every import entering the US faces some form of additional duty — and for goods from China, the combined rate can exceed 145%. This guide walks through every major action, the legal authority used, and what it means for your import costs.
The Universal Baseline Tariff (10%)
On April 5, 2025, a 10% universal baseline tariff took effect on all imports from all countries except Canada and Mexico. This was imposed under the International Emergency Economic Powers Act (IEEPA), citing a declared national economic emergency around persistent trade deficits.
The 10% baseline stacked on top of existing MFN duty rates. For products with a 5% MFN rate, the effective rate became 15%. For products already at 0%, the new floor became 10%. This affected roughly $3 trillion in annual US imports.
Country-Specific "Reciprocal" Tariffs
On April 9, 2025, the administration announced higher country-specific rates — dubbed "reciprocal tariffs" — targeting countries with large trade surpluses with the US. These were calculated as roughly half of each country's estimated effective tariff-plus-non-tariff-barrier rate on US exports.
| Country/Region | Reciprocal Rate | Effective Date |
|---|---|---|
| European Union | 20% | April 9, 2025 |
| Japan | 24% | April 9, 2025 |
| South Korea | 25% | April 9, 2025 |
| Vietnam | 46% | April 9, 2025 |
| Taiwan | 32% | April 9, 2025 |
| India | 26% | April 9, 2025 |
| China | 34% (additional) | April 9, 2025 |
Most country-specific rates above the 10% baseline were paused for 90 days on April 9, 2025, reverting to 10% while negotiations proceeded. China was excluded from the pause.
China: The 145% Tariff Stack
China's tariffs escalated through a rapid sequence of tit-for-tat actions:
- Pre-existing Section 301 tariffs: 7.5% to 25% (Lists 1–4A, from 2018–2019)
- February 2025 IEEPA tariff: 10% additional (citing fentanyl)
- March 2025 IEEPA tariff: Additional 10% (total IEEPA: 20%)
- April 9, 2025 reciprocal tariff: 34% additional
- April 9, 2025 escalation: Raised to 84% in response to Chinese retaliation
- April 11, 2025 further escalation: Raised to 125% IEEPA additional
Combined with the pre-existing Section 301 rates (up to 25%), many Chinese goods now face effective rates of 145% or higher. A product with a 5% MFN base rate, 25% Section 301, and 125% IEEPA surcharge faces a total rate of 155%.
Steel, Aluminum, and Autos: Section 232 Expansion
In March 2025, the administration eliminated all country exemptions from the Section 232 steel (25%) and aluminum (10%) tariffs — Canada and Mexico, which had been exempt since 2019, were brought back under the tariff umbrella. A new 25% tariff on automobiles and auto parts was also imposed under Section 232 national security authority, targeting imports from the EU, Japan, South Korea, and Canada.
De Minimis Elimination for China
In May 2025, the de minimis exemption — which previously allowed packages valued under $800 to enter duty-free — was eliminated for Chinese-origin goods. This directly impacted cross-border e-commerce platforms that had built their model on duty-free small shipments from China to US consumers. See our full guide on de minimis rule changes for the complete impact analysis.
What Importers Must Do Now
- Audit your HTS codes: Use our HTS code lookup to verify current rates. Many codes now have 3–4 layers of additional duties.
- Recalculate landed costs: The tariff landscape has changed so dramatically that any cost model built before 2025 is almost certainly outdated.
- Evaluate supply chain alternatives: Vietnam (46%), India (26%), and Mexico (10% baseline, subject to USMCA rules) all present lower-tariff options than China.
- Check for exclusions: USTR has opened new exclusion processes for certain products. Filing an exclusion request takes time — start now.
- Monitor the 90-day pause: The pause on country-specific rates above 10% (excluding China) expires periodically. Rates could reset upward with little notice.
Bottom Line
The 2025–2026 tariff regime represents a structural break from the post-WWII free trade consensus. Import costs have risen for virtually every product category, but the impact is most severe for China-sourced goods. Use our tariff calculator to compute your exact duty burden and model alternative sourcing scenarios.