Within President Trump’s ‘Liberation Day’ announcement on 2 April, Annex I reciprocal tariffs of 10% were imposed on goods originating in the United Kingdom (UK) that enter the market of the United States (US). These are levied in addition to any existing most favoured nation (MFN) tariffs that the US applied to goods of UK origin exported to the US. If a product contains more than 20% US content, only the non-US originating content will be subject to the reciprocal tariffs.
Executive Order 13944 which has distanced the United States (US) from the World Trade Organisation’s established application of most favoured nation (MFN) principal that is located in Article I of General Agreement on Tariffs and Trade 1947.
Most-Favoured-Nation Principle (GATT 1947, Article I) and the World Trade Organisation
The MFN rule requires WTO members to extend equal tariff and trade treatment to all other WTO members. If a country lowers a tariff for one member, it must apply the same rate to all others. President Trump’s imposition of reciprocal tariffs has cited concerns addressing a challenge to multilateralism, in addition to the departure from WTO dispute resolution. During the first Trump administration, the US blocked appointments to the WTO Appellate Body. This was continued during the Biden administration.[1] As of February 2025, 84 appointments have been blocked by the US.[2] The result has been that the WTO have failed to function adequately, as they have fallen below the quorum of three judges required to hear appeals. As a result, the WTO’s dispute resolution mechanism has been undermined, as panel decisions are not subject to a final binding review. The last sitting member’s term expired on 30 November 2020.[3]
Within the Executive Order dated on 2 April 2025, Trump referred to The General Agreement on Tariffs and Trade (GATT) 1947, which established the foundations of the World Trade Organisation’s systematic obligation for member nations to provide equivalent third country duty – most favoured nation (MFN) rates to trade partners, in the absence of a trade agreement. Trump outlined that the US had one of the lowest simple average MFN tariff rates at 3.3%, whereas other trade partners’ MFN rates were significantly higher. Rather than establishing a higher MFN rate applicable to all parties outside of a trade agreement – which is the established approach of WTO member rules, Trump has distanced the US from WTO rules and established differing rates for trade partners, in an attempt to address the US $1.2 trillion trade deficit. He identified that manufacturing represents 11% of US gross domestic product (GDP) but accounts for 60% of exports, and an ambition to increase the manufacturing capacity.
Examples
Examples of the application of US tariffs on exports of UK origin are set out below:
• Cotton dress, GB origin, CN code: 6404423050, MFN Tariff 8.4%, Reciprocal tariff 10%. Total tariff 18.4%
• Scotch whisky (Single Malt), GB origin, CN code 22083030, MFN Tariff 0%, Reciprocal Tariff 10%. Total tariff 10%
• Steel bar for concrete reinforcement (rebar), GB Origin, CN code 72142000. Preferential duty of 25% of free on board (FOB) value.
• A painting over 100 years old, CN code 970121, GB Origin, Reciprocal Tariff 10% of FOB value
• Light oil motor fuel blending stock from petroleum oils and oils from bituminous minerals (other than crude) containing by weight 70% or more from petroleum oils or oils from bituminous minerals, CN code 27101218, GB Origin, tariff 0.525 USD/bbl (US)
• Coenzyme Q10 (ubidecarenone (INN)), CN code 29146200, GB origin, tariff 5.5% FOB value.
Exemptions from Reciprocal Tariffs
Annex II
There are a number of exemptions from reciprocal tariffs available. Annex II contains a list of products that are exempted from reciprocal tariffs, which includes copper, pharmaceuticals, semiconductors, specific lumber products, bullion, plastic, petrochemical and energy products, and critical minerals that are not available in the US.
Section 232 of the Trade Expansion Act 1962
Goods that are subject to preferential tariffs under section 232 of the Trade Expansion Act 1962 are also exempt from reciprocal tariffs. Preferential tariffs, for example of 25% chargeable on automobiles, and 25% on products of steel and aluminium composition are chargeable on these items. The scope of the 25% tariff on automobiles will be extended to automobile parts by no later than 3 May 2025.
US Originating Content
If a product contains more than 20% US content, only the non-US originating content will be subject to the reciprocal tariffs. In the latter instance, the entry summary lines must be broken up into two entry summary lines to accurately report and pay the appropriate duty rate.
The first line will include the U.S. content while the second line will include the non-U.S. content. Each line should be reported in accordance with the below instructions, as set out by ‘CSMS #64649265 – Guidance.[4]
In the first line, for U.S. content, report:
· Ch 1-97 HTSUS, this same HTSUS must be reported on both lines.
· Country of origin, same must be reported on both lines.
· HTSUS 9903.01.34.
· Total entered value of the article less the value of the non-U.S. content.
· Total quantity of the product.
· All applicable duties.
In the second line, for non-U.S. content, report:
· Same Ch. 1-97 HTSUS reported on the first line.
· Same country of origin reported on the first line.
· HTSUS 9903.10.25.
· Total entered value of non-U.S. content of the article.
· Zero for quantity for the product.
· All applicable duties.
De Minimis
De minimis is an exception available for goods with a value below $800 (low value imports) imported by one person on one day, concerning fast track customs procedures that do not require a full customs declaration. These items are usually sent via e-commerce and a postal service direct to consumers. Articles covered by headings 9903.01.25 and that are otherwise eligible for the exemption, including eligible articles sent to the United States through the international postal network, remain exempt other than where they are sent from China, Hong Kong Special Administrative Region and the Macau Special Administrative Region as described within “Further Amendment to Duties Addressing the Synthetic Opioid Supply Chain in the People’s Republic of China as Applied to Low-Value Imports” [5]. From 3 May 2025, goods imported from these countries will be subject to applicable tariffs, or applicable postal service fees for goods of Chinese, Hong Kong or Macau origin.
Other Goods that are Exempt
There are certain other exceptions which are available, for e
Articles protected under 50 U.S.C. § 1702(b) (e.g., humanitarian goods such as food, medicine, and donations exempted under the International Emergency Economic Powers Act) are exempt. These articles classified within 9903.01.29 by the US, and intended to be used to relieve human suffering.
Information materials classified within 9903.01.31 that are informational materials, including but not limited to, publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds.
Furthermore, goods that fall within the scope of certain free trade agreements established the US are exempt from the reciprocal tariffs.
Additional Charges
The United States also charge additional fees on import such as a merchant processing fee, and a harbour fee for imports that arrive by sea.
Merchandise Processing Fee (MPF)
For formal entries valued over $2,500, a merchandise processing fee of 0.3464% of the dutiable value applies, with a minimum charge of $32.71 and a maximum of $634.62.
For informal entries (valued under $2,500):
- Automated entries not prepared by CBP are charged $2.62.
- Manual entries not prepared by CBP are charged $7.85.
- Manual entries prepared by CBP are charged $11.78.
Additionally, a $3.93 surcharge is applied for manual entry or release.
Certain goods are exempt from the MPF, including:
- Products from least-developed beneficiary countries,
- Goods from countries under the Caribbean Basin Economic Recovery Act,
- Products from U.S. insular possessions,
- Goods originating in Canada, Israel, and Mexico,
- Items qualifying as originating under specific U.S. free trade agreements.
Harbour Maintenance Fee
A harbour maintenance fee is levied at a rate of 0.125% of the dutiable value on imports via sea.
For further information on exporting to the US from the UK, and the implications of US tariffs on the supply chain, use of intermediates, and reciprocal tariff exemptions, please contact Alinea Customs’ consultancy department: customs@alineacustoms.com.
[1] William Alan Reinsch and Jack Caporal, ‘World Trade Organization’ (CSIS, 2023) https://www.csis.org/programs/economics-program-and-scholl-chair-international-business/world-trade-organization#:~:text=For%20roughly%20two%20years%2C%20the,and%20concerns%20over%20U.S.%20sovereignty accessed 6 April 2025
[2] ‘US again blocks appointment of Appellate Body members at WTO’ (Third World Network, March 2025) https://twn.my/title2/wto.info/2025/ti250212.htm accessed 6 April 2025
[3] World Trade Organization, ‘Appellate Body Members’ (WTO) https://www.wto.org/english/tratop_e/dispu_e/ab_members_descrp_e.htm accessed 6 April 2025
[4] U.S. Customs and Border Protection, ‘CSMS #64649265 – Guidance – Reciprocal Tariffs, April 5, 2025 Effective Date’ (4 April 2025) https://content.govdelivery.com/accounts/USDHSCBP/bulletins/3da7831 accessed 6 April 2025
[5] Donald J. Trump, ‘Further Amendment to Duties Addressing the Synthetic Opioid Supply Chain in the People’s Republic of China as Applied to Low-Value Imports’ (The White House, 2 April 2025) https://www.whitehouse.gov/presidential-actions/2025/04/further-amendment-to-duties-addressing-the-synthetic-opioid-supply-chain-in-the-peoples-republic-of-china-as-applied-to-low-value-imports/ accessed 6 April 2025.
