Tariff Trends 2025: Expert Insights on the New U.S. Customs Landscape

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Angela Lewis

00:03 - 02:13 Hello, everybody, and thank you for attending today's webinar, tariff trends 2025, expert insights on the new US customs landscape. My name is Angela Lewis, and I am the global head of customs here at Flexport. If you are attending these webinars regularly, you might have noticed that we are on a new platform today. So before we dive in, we'll go over a few quick housekeeping notes to help everyone get oriented. On your screen, you will see a sidebar to the right of the main stage where you can submit questions. At the end of the presentation, we will host a q and a and answer a few audience questions, so be sure to get your questions in early. In the same sidebar, you'll also see a tab labeled docs. This is where you can download a copy of today's slides and find other helpful resources, so please check it out. Above your screen, you have a new button to request an ACE analysis from Flexport. We will review in further detail at the end of the presentation, but please click that button if you would like Flexport to reach out to discuss an ACE analysis for your business. Now on to a brief legal note. Please keep in mind that all information provided in this session is based on the situation at this current time and may not be customized to your specific business requirements. We always recommend reaching out to a expert to discuss your particular situation. So joining me today are my colleagues, Steven Lunn, senior customs manager, and Anna Zajac, senior trade advisory manager here at Flexport. And our agenda for the day is, to update you on the latest developments in tariff news, kicking it off, followed by a quick recap highlights from last week's trade and cargo securities summit. We will cover how to manage IEPA reciprocal tariff liability, and then finally wrap it up with a look at what's going on on the horizon, followed by our live q and a session. So I will kick it off to Steven Lunn now for an update on the latest news.

Steven Lunn

02:13 - 11:17 Hey, everybody. So back to latest news, things that have changed recently. So we'll go ahead and go through some updates. I know all but everyone was interested in what was happening over the weekend with China, everything like that. So we'll go ahead and get into everything. If we can go to the next slide, please. So first of all, wanna start with the China updates. I think this is probably the most impactful thing, the thing that everyone has the most questions on. So the reciprocal tariffs were reduced from a 25% down to 10%. So that does make the total amount of the tariffs to 30%, including the 20% for the Sentinel tariffs. So right now, rather than the 45% you would have been seeing earlier this week or last week, it is now at 30% total. This reduction is stated to be in place for ninety days, and it started on at, you know, 12:01 on May 14. So the ending date would be August 12. So, you know, obviously, be prepared for whatever that means. People are probably gonna be shipping a lot more, and then just making sure that your customs entry, they're getting put in in time to take advantage of that. And just a general reminder on this, we do get this question a lot or I've gotten this question a lot. When these kinds of changes happen, you know, importers will ask questions around, can we cancel our entry? Can we you know, in order to take advantage of these lower duty rates. Back when section three zero one first started, there was a CSMS that was released by customs that specifically stated they would not allow that. So if an entry has been filed and you go to cancel it, just in order to take advantage of that lower duty rate, it will be canceled or customs may, you know, if they find out later, submit, you know, do, basically reach out to you on that. So just note, if you ask that question, your broker is pushing back, that's generally that is because customs has already given us the advisement that we should not be changing anything just to take advantage of that lower duty rate. Alright. Go to the next slide, please. Next, I wanna talk about The UK announcement. Obviously, there was a lot that happened, but it's pretty specific to a few things. So first of all, aerospace has been basically given the opportunity to enter goods into The US duty free, as well as, a 10%, tariff on British goods, that will remain in place on everything else. So certain segments have gotten some benefits. British Steel will also no longer be facing the 25% section two three two tariffs, but there is some wording in there that says that steel and aluminum will still be subject to trading union, which would include tariffs and quotas. That's not specifically outlined yet as to what exactly that entails, but that is sort of the wording that was was in the notice. As well, the president said 10% tariff treatment for UK Steel was dependent on The UK using quotas and tariffs on US imported steel as well. So, you know, basically working together. On the right, I did put an infographic there that was tweeted by the president, so or sent on to social. So if you do have any you know, wanna know where that came from, that's where you can kind of see where that where that was from. And it's really just kind of showing what the expected benefits are of, this announcement. If we go to the next slide, please. So the other part is, basically, British cars are being given, duty free treatment, or they're not getting additional tariffs. So, they're getting the 10% tariff. And what that means is, for a hundred per a hundred thousand cars, they're basically gonna be treated as quota. So, while looking at that number, a hundred thousand, it's also important to note that, last year, The UK only imported a 2,000 cars into The US. So this does primarily, speak to basically all the cars that were imported. Now how this impacts The US car making market, just so everyone is aware, is there has been argument saying that this sort of gives an advantage for UK vehicles over the USMCA countries. But the, president and the White House has already responded that for those mass production vehicles, they should be looking to manufacture in The US. So there likely will not be any changes to how those are being done, from The UK or for the, Mexican and Canadian cars. They will still be, under the same rules as current. If we can go to the next slide, please. The next thing I wanna talk about is, Venezuela oil updates. So you'll notice that these are actually probably about a month and a half old. So, essentially, on the April 2, POTUS issued an executive order imposing 25% tariff on goods from countries imported, that import oil from Venezuela. The important thing is that no action as of yet has been taken to implement these tariffs. The tariffs target countries, that are importing directly from Venezuela or through third parties that are, importing and shipping to them. The tariffs are actually going to be imposed based on the recommendation of the state and commerce department, so they're gonna be sort of running this process. When, the tariffs are assessed, the expectation is that they will, go away or expire after one year from the last date that they imported oil from Venezuela. The only other option is if the commerce department specifically decides to lift them. China and The US are the largest buyers of Venezuelan oil at more than half of its daily production. And the reason we wanna talk about this and the reason we're bringing this up even though this is a month and a half old is that, you know, enforcement is likely to gain traction or maybe gaining traction in the next weeks or months ahead. So we wanna be paying attention to that. So while nothing has happened on that yet, and while we're looking at, like, the reduction from 25 to 10% for, the reciprocal tariffs out of China, If these do go into place, then you could see an additional tariff added on specifically for the Venezuelan oil. So just keeping in mind that things are constantly in flux and constantly changing. And we would obviously always recommend that you wait for a federal register notice to know when these things are actually happening. So you may hear it being talked about. You may see, articles or information on it, but you wanna make sure that you're specifically, waiting for customs to give that information. Okay. If we can go to the next slide, please. And lastly, I wanna talk about, customs clearance, line trends, sort of the things that have happened. We talked about this in a previous, webinar as well, but I wanted to sort of give more, live examples showing the 75 o ones and what they look like. This will be a more visual opportunity for you to see what you're looking at, what you're reviewing as an importer, and knowing sort of what to be looking for. So, again, back before 2019, this is the time we all probably enjoyed the most. All you're filing is your your product. So you pay the duties. You have an HTS code that fits the product. Boom. Clear. Done. Everyone's happy. It was easy back then. In 2019, we started getting section three zero one tariffs, section two three two and two zero one tariffs, and then the exclusion that went along with those. Now if you're looking at this, this is a simple one where we're just showing a section three zero one and a product tariff. Generally, during that time, you were only seeing two per product. It was pretty straightforward, still pretty simple. If we can go to the next slide, please. Now, however, as we've stated before, this gets very complicated. So you have your product tariff, your section tariff, your three zero one tariffs, your exclusion tariffs, your fentanyl tariffs, your aluminum steel derivative tariffs, your, exclusion tariffs for aluminum and steel, and then the IEPAA reciprocal tariff, for China and Hong Kong. So the important thing about what this is showing here is that this is one product. So within your 75 o ones, you may start seeing products where it is a singular product, but it's being cleared under two separate lines. And this will usually happen due to the aluminum and steel derivative tariffs because you're claiming what those are. However, we've also seen that you can actually see a singular product listed on three separate lines if it has both aluminum and steel associated with it. So you're gonna see these just get more and more complicated. And part of the reason we wanna talk about this is because one of the things that we know is happening is custom system, when you transmit an entry, has the ability to reject if things aren't done properly. It'll basically, the system will tell the broker, hey. This hasn't been submitted right. Fix it before we'll accept it and allow it to come into commerce. What's happening is some of those rules aren't working properly, and so some things are getting through that shouldn't because they're not following the exact, rules of, the classifications. What's happening is we're seeing, one, some entries are being rejected after statement is already paid, which then causes additional work to have to be done. But the other part of it is we also know that, CF 20 eights are now going out on this. So if they see that a tariff is, done incorrectly, that you'll get a a letter from customs. And it's again, just work with your broker. Let them know. Help them get it let them get it fixed. Show them what's going on. That's gonna be your best option. But we wanna make sure that everyone is aware that if you're getting these, it may just be something that can be corrected. It may not be a huge deal, but just something you always want to communicate to your broker as soon as you see it so they have the opportunity to update and change that. Alright. And that is everything from my side. I'm gonna go ahead and pass it over back to Angela.

Angela Lewis

11:17 - 20:01 Thanks, Steven. So I wanted to take a few minutes today to talk to everyone about the twenty twenty five Trade and Cargo Security Summit. This was held last week. This is CBP's yearly summit. It is meant to bring together the international trade community and CBP for discussions on the agency's top priorities and initiatives. This year, in particular, in the opening remarks, CBP stated that the theme of the summit was to follow the America First trade policy. The goal was to understand its implications, understand its impacts, and obtain clarification for trade. Discussion was around the practicalities and realities based on importers and trading partners feedback. So I would start by urging everyone, if you haven't already, to read the America First Trade Policy. It's not a long document. It was put out on January 20 from the administration, and is really gonna be the cornerstone of how CBP is interpreting the administration and, their marching orders, so to speak. So in that vein, CBP, is looking at three main goals from this America First trade policy. And the first is to prioritize national security, which is really an overarching goal of the other two. So what CBP will do is ensure that packages are safe, that, the America can American consumer is the top priority. And in one session, it was mentioned in particular that 30% of air cargo flies on passenger aircraft. So it is CBP's job to ensure the safety of that cargo to ensure the safety of Americans. Deputy Deputy Secretary Troy Edgar in his keynote address during lunch said that a CBP's job is to make sure that all 328 ports of entry were safe and secure. And they also mentioned multiple times that national security is economic security, which really leads into goal number two, and that is protecting the domestic industry. So as a keynote speaker during lunch, commissioner Pete Flores said, CBP is steadfast in bringing manufacturing back to American shores. They even had a panel with the CEO of Guardian Bikes who discussed manufacturing in America and how, they actually manufacture bike frames and basically the advantages that this has brought to their company. So the goal of the movement is really to improve the lives of Americans, and they see that bringing manufacturing back to America is is a step towards that and is protecting our domestic industries. Lastly, they will focus on advanced enforcement efforts. You know, the focus, right now, that CBP talked about in a number of sessions was in valuation, so undervaluing. They know that that's gonna be a common problem that's popping up with the additional tariffs. Forced labor continues to be a main area of focus. They're also looking at classification similar to valuation. They know this is an area which people will change their classification to, have a lower duty rate, and then antidumping and countervailing duty. So those are really focused areas for the administration right now. And like I said, they understand that with the elevated tariffs, there's gonna be more evasion, and they're gonna work harder to make sure that that is not occurring. Next slide, please. I just wanted to cover a couple details that I thought were really important here. 60% of executive orders thus far have been on trade, and 21 presidential actions for CBP have been implemented in very short term, and as CBP says, with no delays. So they mentioned they have a dedicated staff across all offices that are working on implementing these presidential actions. They actually described walls being littered, mapping them out. It really helps them to look at everything end to end, and try to look at the whole life cycle of the goods and how the product the executive order needs to be implemented. So customs is, happy with what they've been able to do given the timelines thus far. But they did say, multiple times in multiple panels that enforcement is here to stay. One thing I think everyone is seeing is that with the short notice of these executive orders, it's hard to know exactly what to do. The regulations are changing, constantly. And so if responsible if responsible care is documented, then customs will not be issuing penalties. That was a statement, it that they made during a question. Now, obviously, how do you document reasonable care? That's gonna depend on the circumstance. But what customs really did, emphasize is that they're going after the bad actors actors here. They understand that things have been rolled out quickly and that there might be confusion, but they really want to enforce and, ensure that the bad actors are the ones that they're stopping, that the illegal activity is what they are preventing. They did say that revenue enforcement at time of release is going to escalate, so we can see, more stopped goods, and revenue, becoming a bigger part of of, release as well. I think interestingly enough, one of the things they talked about when they talked about enforcement and in multiple areas was the use of AI and LLMs to manage and help them with targeting and security. They want these, this technology to help them better analyze data so that officers can be out on the front lines at those 320 ports of entry. They also did mention, and we're we're seeing it now, with the stacking, and I'll talk about that a little more in a minute, but increasing the number of HTS numbers per line is gonna go from eight currently up to 32. And then they're also going to adjust the maximum number of lines per entry. Now they don't have a timeline on that, but they are working, very hard to make sure that happens. They know it is, an immediate and imminent threat to all the additional tariffs that are being added. One thing we have talked about before that I wanted to mention is DDP. We're seeing a lot of companies ask us, you know, hey. What's about DDP? We're getting, solicited to to move to a DDP set up. Customs did acknowledge that this was a problem that they see, and they've heard about this. The ultimate consignee may be held accountable, or an entry may reject, if the IOR does not have the right to make entry. So they know that this is something that's going on right now. In one session, they talked about if you were always set up as DDP and didn't know any better, that's one thing. But if you've been importing goods for a while and then suddenly it shifts to DDP, they're they're gonna hold the ultimate cons consignee responsible there. And then another thing, that was a a huge change that I think is really important for everyone to know is that customs, per another executive order, is looking to ensure that a % of refunds are issued electronically by end of their fiscal year. So expanding functionality in pay. gov to include payments of PSCs and single entry bonds, but also using ACE to manage ACH. So to apply for ACH, to manage the forty eight eleven relationship if your broker can obtain a refund on your behalf, and payment refund statuses will all be in ACE. So just another reason as an importer to make sure you are utilizing ACE that you have access. It's really going to expand this year into payments, as well. And with that, that wraps up the recap. I'll turn it over to Anna. Hey, Anna. Just a quick thing. We're working in a new webinar. You are muted. So if you.