Policy and Legal

Late last week, Customs and Border Protection issued new guidance on Canada, Brazil and the changes to the International Emergency Economic Powers Act reciprocal tariff rates that take effect on Aug. 7 per the Further Modifying the Reciprocal Tariff Rates Executive Order.

Exemptions: The guidance covers classification of in-transit goods, USMCA-qualifying goods and goods identified as exemptions in Annex II of EO 14257.

Articles subject to Section 232 tariffs: The guidance also includes classification of articles subject to Section 232 tariffs, including iron, steel or aluminum and covered derivatives; passenger vehicles, light trucks and parts; and semifinished copper and intensive copper derivative products.

U.S.-originating content: The guidance also details classification of articles in which at least 20% of the value of the article is U.S. originating. The U.S. content will not be subject to the reciprocal tariff. The reciprocal tariff will be assessed on the non-U.S. content.

Transshipment: The guidance explains the procedure by which CBP will assess an additional ad valorem duty of 40% on goods determined by the agency to have been transshipped.

HTSUS reporting sequence: This guidance details the sequence for entering multiple HTSUS numbers, which may include a Section 301 tariff, an IEEPA tariff and/or a Section 232 or 201 tariff/quota.

Sources: You can find the three guidance documents below:

• Canada rates effective Aug. 1: CBP Guidance on Canada
• Brazil rates and exemptions effective Aug. 7: CBP Guidance on Brazil
• Reciprocal tariff rates effective Aug. 7: CBP Guidance on Reciprocal Tariffs