President Trump issued an executive order Aug. 6 adopting a 25 percent additional tariff on India under the International Emergency Economic Powers Act on the basis that India is currently directly or indirectly importing Russian oil and oil products. This is in addition to the reciprocal tariff of 25 percent that U.S. imports from India will face effective Aug. 7.
The new tariff will enter into force on 12:01 a.m. EDT on Aug. 27, except for goods that (1) were loaded onto a vessel at the port of loading and in transit on the final mode of transit prior to entry into the U.S. before 12:01 a.m. EDT on Aug. 27; and (2) are entered for consumption, or withdrawn from warehouse for consumption, before 12:01 a.m. EDT on Sept. 17.
The EO asserts that this 25 percent tariff will be in addition to any other duties, fees, taxes, exactions, and charges applicable to such imports, unless subject to existing or future actions under Section 232 of the Trade Expansion Act of 1962, in which case the new tariff will not apply. Furthermore, the new tariff will not apply to (1) articles that are excepted under 50 U.S.C. 1702(b), or (2) articles set forth in annex II to EO 14257 of April 2, as amended (i.e., the articles that are exempt from the reciprocal tariffs).
Except for those articles that are eligible for admission under domestic status as defined in 19 CFR 146.43, articles that are subject to this new tariff, and that are admitted into a foreign-trade zone on or after 12:01 a.m. EDT on Aug. 27, must be admitted under privileged foreign status as defined in 19 CFR 146.41.
If a country retaliates against U.S. goods as a result of this new tariff, the president may increase or expand the scope of the tariff. If Russia or a country impacted by this order (India) is to address the international emergency at hand, the president may decrease or limit the scope of the tariff.
ST&R offers a three-pronged approach to avoiding, mitigating, and/or recovering import tariffs. For more information on which of these strategies might be most effective for your business, please contact ST&R.
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