U.S. - China Trade War explained: 34%- 84%- 125%
- Arne Mielken
- Apr 10, 2025
- 13 min read
Washington delivers a tariff gut punch: U.S. hikes reciprocal duties on Chinese goods from 34% to 84% to 125% —as China retaliates - here’s what Customs professionals must know now.
From 10% to 145% in under two months
On 9 April 2025, the U.S. administration made a significant change in the global trade arena. With a single signature, President Trump enacted an Executive Order that raised reciprocal tariffs on most goods from the People’s Republic of China (PRC) from 34% to a staggering 84%, further increasing to 125% just 24 hours later. This is in addition to the previous 10% and then 20% tariffs imposed on China in the preceding months. Altogether, the effective tariff rate has reached 145% with no indication of easing.
Whether you’re a Customs Consultant, Trade Compliance Manager, or a global importer/exporter, this update demands your immediate attention. As with any decision by President Trump, it is COMPLICATED.
Given the rapidly changing situation, we will cover this development in three parts and address the following questions:
PART 1: 34%
What action did the U.S. take on 2 April regarding reciprocal tariffs and China?
Background: What additional duty was previously imposed on China?
Are duty-free de minimis shipments from China affected?
How did China respond to the new reciprocal U.S. tariffs?
What is the size of the trade deficit between the U.S. and China?
PART 2: 84%
What was the U.S. response on 8 April 2025?
What exactly changed on 9 April 2025?
What products are affected by the new U.S. tariff increase?
How did China react to the U.S. raising the tariff to 84%?
PART 3: 125%
Latest Guidance by U.S. Customs
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PART 1 :34%
PART 2: 84%
China's response 1: These 12 US entities are added to unreliable list
China's response 2: These 6 US entites are added to the unreliable list
China's response 3: China Export Control on Rare Earth Minerals
China's response 4: 16 entities from U.S. added to Export Control List
Guidance by U.S. Customs & Border Protection to increase tariff to 84%
PART 3: 125%
“This tariff hike is more than just a duty change—it’s a strategic signal. U.S. policy is shifting from defensive to confrontational. The time to reassess your global sourcing strategy is now.”– Arne Mielken, Managing Director, Customs Manager
Abbreviations Used In This Blog
CBP – U.S. Customs and Border Protection
HTSUS – Harmonized Tariff Schedule of the United States
PRC – People’s Republic of China
EO – Executive Order
IEEPA – International Emergency Economic Powers Act
De Minimis – A shipment valued below a set threshold (usually $800), previously duty-free
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PART I: 34%
I.1: US Action
What action did the U.S. take on 2 April as regards recipical tariffs and China?
On April 2, 2025, Executive Order 14257 was issued, declaring a national emergency due to large and persistent U.S. goods trade deficits, which were determined to pose a threat to national security and the economy. This led to the imposition of additional ad valorem duties under a reciprocal tariff framework targeting unfair foreign trade practices, which covered China with 34%.
Executive Order 14257, issued April 2, 2025, and published in the Federal Register Notice, “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits,” 90 FR 15041 (Apr. 7, 2025),
Background: What additional duty was imposed against China before?
Due to alleged opiod drugs inflows into the United States from China, an additoanl duty of 10%, later increased to 20% was imposed in February & March 2025. So with the 34% this brought the effective rate for most products up to 54%.
Are duty-free de minimis shipments from China affected?
Yes — and significantly so. Under the same Executive Order, changes to low-value shipments (de minimis) from China have been rolled out as follows:
From 2 May 2025:
De minimis duty rate increased to 90% for goods of Chinese origin.
Postal handling fee raised to $75.
From 1 June 2025:
Postal handling fee further increases to $150.
This targets e-commerce and fast parcel imports and eliminates any potential workaround via under-valuing or multiple low-value shipments to avoid duty.
Simultaneously, under Executive Order 14256, the duty-free de minimis treatment (as per EO 14195) was revoked for certain articles, effective May 2, 2025, particularly targeting low-value imports linked to the synthetic opioid supply chain from China.
Executive Order issued April 8, 2025, “Amendment To Reciprocal Tariffs And Updated Duties As Applied To Low-value Imports From The People's Republic Of China,”
I.2. China Action
How did China react to the new reciprocal U.S. tariffs?
On 4 April 2025, China’s State Council Tariff Commission announced a new round of 34% retaliatory tariffs on U.S. goods. These duties target U.S. agricultural exports, select electronics, and other high-profile categories. This tit-for-tat escalation has reignited tensions in the U.S.–China trade dispute.
Total measures included::
A blanket 34% tariff on all U.S. imports, that'S all U.S. goods entering China, effective April 10, 2025.
The addition of 11 U.S. companies to its Unreliable Entity List
Export controls on rare earth-related items
An antimonopoly probe into DuPont China.
How big is the trade deficit between the U.S. and China?
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By 8 April 2025, the U.S. cumulative tariffs on Chinese by that time had reached 54%, China has announced the imposition of cumulative tariffs of up to 49% on U.S. goods, marking one of the most aggressive tit-for-tat tariff escalations in the ongoing trade standoff.
Agriculture—especially soybeans—is the United States' largest export sector to China.
With tariffs now approaching 50%, China is expected to significantly scale back or even halt imports of U.S. soybeans, meat, and other agrifood products. These punitive duties render U.S. agricultural goods noncompetitive compared to alternative suppliers like Brazil, Argentina, and Australia, who now stand to gain market share in China.
Ministry of Commerce and General Administration of Customs Announcement No. 18 of 2025: Decision on Export Control of Certain Heavy Rare Earth Items - Policy ReleaseSource: Bureau of Safety and Regulation, April 4, 2025On April 4, 2025, the Ministry of Commerce and the General Administration of Customs of China issued Announcement No. 18 of 2025, implementing export controls on certain medium and heavy rare earth-related items. This decision is in accordance with the Export Control Law of China and aims to protect national security and fulfill international obligations. The announcement specifically targets samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium and their alloys, oxides, compounds, and mixtures. Export operators wishing to export these controlled items must apply for a license from the Ministry of Commerce. The announcement also emphasizes that exporters must identify controlled items and include relevant details when declaring, with customs reserving the right to question shipments and hold goods if necessary. This export control measure takes effect immediately and will be reflected in the updated Export Control List. |
Ministry of Commerce Announcement No. 21 of 2025: Addition of 16 U.S. Entities to the Export Control List - Policy ReleaseSource: Bureau of Safety and Regulation, April 4, 2025On April 4, 2025, the Ministry of Commerce of China issued Announcement No. 21 of 2025, adding 16 U.S. entities to the export control list. This decision is in line with China's Export Control Law and aims to safeguard national security, protect interests, and fulfil international obligations, including non-proliferation. The announcement prohibits the export of dual-use items to these entities, halting any ongoing related export activities immediately. In exceptional cases where export is necessary, operators must apply to the Ministry of Commerce. The 16 entities included in this control list are: High Point Aerotechnologies, Universal Logistics Holdings, Source Intelligence, Coalition for A Prosperous America, Sierra Nevada Corporation, Edge Autonomy Operations, Cyberlux Corporation, Hudson Technologies, Saronic Technologies, Oceaneering International, Stick Rudder Enterprises, Cubic Corporation, S3 AeroDefense, TCOM, Limited Partnership, TextOre, and ACT1 Federal. This measure comes into effect immediately upon publication. |
Announcement by the Unreliable Entity List Mechanism: Addition of 11 U.S. Companies, including Skydio, to the Unreliable Entity List - Policy ReleaseSource: Bureau of Safety and Regulation, April 4, 2025
II 84%
II.1 US Action
What was the U.S. response on 8 April 2025?
The April 2 Executive order also included a retaliation clause (Section 4(b)), stating that if a trading partner retaliates—through duties or other measures—the President may further modify the U.S. Harmonized Tariff Schedule (HTSUS) to expand or increase tariffs.
U.S. Treasury Secretary Scott Bessent urged countries to refrain from retaliating, warning that escalation could follow. “If you retaliate, there will be escalation. If you don’t, this is the high-water mark,” he said.
As a result, on April 8th 2025, and invoking Section 4(b) of EO 14257, the President has now ordered further modifications to the HTSUS, increasing tariffs on PRC-origin goods to counteract the retaliation and uphold the national interest. This action is framed as necessary to preserve the effectiveness of the U.S. trade measures and address the ongoing threats to economic and national security.
What exactly changed on 9 April 2025?
As of 12:01 a.m. ET on 9 April 2025, imported goods that are products of China (including Hong Kong and Macau) are now subject to an additional reciprocal 84% ad valorem duty under HTSUS subheading 9903.01.63. This marks a substantial increase from the previous 34% rate, pursuant to the Executive Order of 8 April 2025, titled:
"Amendment To Reciprocal Tariffs And Updated Duties As Applied To Low-value Imports From The People's Republic Of China."
This change applies to all imports entered for consumption or withdrawn from warehouse on or after the effective time. Only goods listed under the specific exclusions referenced in CSMS #64680374 are exempt.
What products are affected by the new U.S. tariff increase?
All products that are originating in China, Hong Kong, or Macau, unless covered by exclusions specified in CSMS #64680374, are affected. These goods must be classified under:
HTSUS 9903.01.63,
In addition to their standard HTS classification (Chapters 1–97),
And are now subject to an 84% additional duty.
CBP has confirmed in CSMS #64687696 that this update supersedes earlier guidance and provides the definitive rule for assessing duty starting 9 April 2025.
II.2. China reaction
How did China react to the U.S. raising the tariff to 84%?
China announced an increase in tariffs on US goods to 84%, up from 34%, starting April 10, 2025. In a Statement, China said
"On April 8, 2025, the US government announced that it would increase the "reciprocal tariff" on Chinese goods exported to the US from 34% to 84%. The US's practice of escalating tariffs on China is a mistake on top of a mistake, which seriously infringes on China's legitimate rights and interests, seriously damages the rules-based multilateral trading system, and seriously impacts the stability of the global economic order. It is a typical example of unilateralism, protectionism, and economic bullying.
In accordance with the Tariff Law of the People's Republic of China, the Customs Law of the People's Republic of China, the Foreign Trade Law of the People's Republic of China, and other laws and regulations and the basic principles of international law, and with the approval of the State Council, the State Council Tariff Commission announced that from 12:01 on April 10, 2025, the tariff rate specified in the Announcement of the State Council Tariff Commission on Imposing Additional Tariffs on Imports Originating in the United States (Tariff Commission Announcement No. 4 of 2025) will be adjusted from 34% to 84%. Other matters shall be implemented in accordance with Announcement No. 4 of 2025 of the Tariff Commission.
China urges the US to immediately correct its wrong practices, cancel all unilateral tariff measures against China, and properly resolve differences with China through equal dialogue on the basis of mutual respect."
On April 9, 2025, the State Council Tariff Commission of the People’s Republic of China issued Tax Commission Announcement No. 5 of 2025, responding to the U.S. decision to escalate its so-called "reciprocal tariff" on Chinese goods from 34% to 84%. Key Details of China's Announcement:
China’s Position:
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In detail:
Ministry of Commerce Announcement No. 22 of 2025: Addition of 12 U.S. Entities to the Export Control List - Policy ReleaseSource: Bureau of Safety and Regulation, April 9, 2025 On April 9, 2025, the Ministry of Commerce of China issued Announcement No. 22, adding 12 U.S. entities, including American Photonics Corporation, to its export control list. This action is in accordance with the Export Control Law of the People's Republic of China and the Regulations on the Export Control of Dual-Use Items, aimed at safeguarding national security, fulfilling non-proliferation obligations, and protecting national interests. As a result, the export of dual-use items to these entities is prohibited, with immediate cessation of any ongoing export activities. If export is necessary under special circumstances, companies must apply to the Ministry of Commerce. This measure takes effect on April 10, 2025. The entities on the list include American Photonics, Novotech, Inc., Echodyne, Marvin Engineering, and others: Export Control List (April 9, 2025) 1. American Photonics 2. Novotech, Inc. 3. Echodyne 4. Marvin Engineering Company, Inc. 5. Exovera 6. Teledyne Brown Engineering, Inc. 7. BRINC Drones, Inc. 8. SYNEXXUS, Inc. 9. Firestorm Labs, Inc. 10. Kratos Unmanned Aerial Systems, Inc. 11. Domo Tactical Communications 12. Insitu, Inc |
Announcement by the Unreliable Entity List Mechanism: Addition of 6 U.S. Companies, including Shield AI, to the Unreliable Entity List - Policy ReleaseSource: Bureau of Safety and Regulation, April 9, 2025[Issuing Unit] Security and Regulatory Bureau [Issuing Document Number] Working Mechanism of the Unreliable Entity List [2025] No. 8 [Date of Issuance] April 9, 2025 Working Mechanism of the Unreliable Entity List Announcement No. 8, 2025 In order to safeguard national sovereignty, security and development interests, in accordance with the Foreign Trade Law of the People's Republic of China, the National Security Law of the People's Republic of China, the Anti-Foreign Sanctions Law of the People's Republic of China and other relevant laws, the Working Mechanism of the Unreliable Entity List has decided to include Shield AI, Inc., Sierra Nevada Corporation, Cyberlux Corporation, Edge Autonomy Operations LLC, Group W and Hudson Technologies in the Unreliable Entity List Regulations in accordance with Articles 2, 8 and 10. Co.) and six other entities were included in the Unreliable Entity List, and the following measures were taken: 1. The above-mentioned enterprises are prohibited from engaging in import and export activities related to China; 2. The above-mentioned enterprises are prohibited from making new investments in China. Matters not covered in this announcement shall be implemented in accordance with the "Regulations on the Unreliable Entity List". This announcement shall take effect at 12:01 on April 10, 2025. Working Mechanism of the Unreliable Entity List (Seal of the Ministry of Commerce) |
III 125%
III.1 U.S. Action
How did the U.S. react to China's increase of import dutires to 84%?
On April 10, 2025, a significant escalation in the US-China trade conflict took effect, with the United States raising tariffs on Chinese imports—including goods from Hong Kong and Macau to a staggering 125%, as per Executive Orders issued earlier in the month.
CBP’s CSMS #64701128 provides updated guidance on new reciprocal tariffs effective April 10, 2025. Imported products from China, including Hong Kong and Macau, are now subject to a 125% additional ad valorem duty under HTSUS 9903.01.63, unless exceptions apply. Tariffs on imports from other countries, excluding China, revert to a 10% additional duty under HTSUS 9903.01.25. These changes follow recent Executive Orders responding to trade imbalances and retaliatory actions. Further guidance will be issued as needed.
Executive Order issued April 9, 2025, “Modifying Reciprocal Tariff Rates to Reflect Trading Partner Retaliation and Alignment.”
IV How should businesses classify their imports under the updated HTSUS?
Importers must apply a dual classification approach:
Classify the product as usual under HTSUS Chapters 1–97;
Then apply HTSUS 9903.01.63 if the product is of Chinese origin and not listed in the official exclusion list.
💡 Important: Check the exclusion list from CSMS #64680374 and monitor future CSMS updates. CBP has advised that more messages may follow to provide clarification or expansion on exceptions.
If you face filing issues, contact your CBP Client Representative or the ACE Help Desk. For trade remedy-related questions, email traderemedy@cbp.dhs.gov.
What should importers and exporters do next?
📌 Importers:
✅ Classify your goods correctly using updated HTSUS 9903.01.63 + base code.
✅ Review the exclusion list from CSMS #64680374 to identify exempt products.
✅ Update your landed cost models to reflect the new 84% duty rate.
✅ Ensure software systems and broker instructions reflect this change.
✅ Monitor CBP’s Cargo Systems Messaging Service (CSMS) for further updates.
📌 Exporters:
✅ Understand Chinese retaliatory measures and which U.S. exports are affected.
✅ Communicate with overseas clients about delays or pricing impacts.
✅ Explore alternative markets to minimise dependency on China.
✅ Engage trade associations or the U.S. Department of Commerce for support.
Above all: Stay informed and proactive. With frequent updates expected, companies must be agile and compliant to avoid costly missteps.
Disclaimer
This information is for educational purposes only and not legal advice. Always consult with qualified legal professionals.💬 Book your free consultation with Customs Manager Ltd to discuss how this policy may affect you.
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