U.S. Customs Tariffs

We would like to update you on the new Executive Orders signed by the President of the United States, Donald Trump, concerning the increase of tariff rates and stricter enforcement measures on the importation of goods into the United States.

In light of these changes, on September 3, 2025, at 14:00, we will hold a webinar in English (click here to register) discussing the practical and legal impacts of President Trump’s new tariff policy on Israeli multinational corporations. Additionally, we will review issues related to customs and transfer pricing, and present strategies to address the challenges and opportunities arising from the new policy.

1. Increase in Reciprocal Tariff Rates and Enhanced Enforcement Against Tariff Evasion

Further to the Executive Order which we reported in our client update dated April 7, 2025 (click here), on July 31, 2025, the President of the United States signed an additional Executive Order (click here). This purpose of this order is to reduce the U.S. trade deficit by imposing “reciprocal” tariff rates based on the country of origin of the goods. In addition, the order is intended to strengthen the enforcement of customs laws in cases involving tariff evasion.

The new reciprocal tariffs entered into force on August 7, 2025, at 12:01 a.m. (Eastern Daylight Time). It should be noted that goods that have already been loaded onto a vessel at the port of export prior to the effective date (August 7, 2025) and are in transit on their last means of transportation, which will enter into consumption or be released from a warehouse for consumption by October 5, 2025, at 12:01 a.m., will not be subject to the additional tariffs under the new order. Instead, these goods will remain subject to the previously applicable tariff rates.

Below is a summary of the key changes introduced by the Executive Order:

A. Goods originating in countries that have reached agreements with the United States (or are in advanced stages of negotiations) will be subject to the additional tariff rates listed in Annex I of the Executive Order, until such agreements are formally concluded. Israeli-origin goods—i.e., goods wholly produced in Israel or goods with at least 35% Israeli value content that have undergone substantial transformation in Israel—will be subject to a 15% reciprocal tariff. (reduction from the 17% set in the previous Executive Order, which was ultimately not implemented, and an increase from the 10% general tariff imposed under the previous Order).

Below are a few examples of the new reciprocal tariff rates applicable to other countries (for the full list, please refer to Annex I of the Executive Order):

• Goods originating in the European Union will be subject to different tariff treatments depending on the general duty rate listed under Column 1 of the HTSUS (Harmonized Tariff Schedule of the United States):

• • Goods with a general duty rate above 15% – no additional tariff will be imposed;
  • Goods with a general duty rate below 15% – an additional tariff will be imposed to bring the total rate to 15%.

• Goods originating in countries not listed in Annex I of the Executive Order will be subject to a 10% reciprocal tariff.

C. It should be noted that no tariffs will be imposed on services and software, as well as on all products listed in Annex II of the Executive Order published on April 2, 2025 (see link), which represent approximately 70% of Israel’s goods exports to the U.S.

Additionally, for a product manufactured in Israel that includes at least 20% U.S.-origin components, no customs duties will be imposed on the U.S.-origin portion.

D.  It is further noted that dedicated tariffs will be imposed on certain goods, such as: aluminum, copper, and steel – 50%, vehicles and auto parts – 25%, semiconductors – 100%. Only the dedicated tariff will apply to these products, not in addition to the reciprocal tariffs. In addition, it is currently being discussed whether to impose dedicated tariffs on other sectors, including: pharmaceuticals, pharmaceutical products, wood products, critical minerals, aircraft parts, drones, solar panel components, and trucks and spare parts.

E. Sanctions for Circumventing Tariffs Payments via Third Countries (Transshipment)

– In cases where U.S. Customs determines that goods were routed through a third country to avoid the applicable tariff on their true country of origin, the following sanctions will apply:

• A punitive tariff of 40% will be imposed, instead of the tariff rate that would have applied based on the actual country of origin;
• Fines and penalties will be imposed without the possibility of reduction or cancellation;
• All duties, taxes, fees, or other charges applicable to goods from the country of origin will be enforced;
• Every six months, a public list will be issued identifying entities (e.g., countries, facilities, companies, ports, or sites) involved in tariff evasion schemes.

2. Suspension of the De Minimis Tariff Exemption for Shipments Valued at Up to $800

On July 30, 2025, the President of the United States signed a new Executive Order suspending the tariff exemption for shipments valued at up to $800 (the “de minimis” exemption)(click here to read the Order).It should be noted that the de minimis exemption is scheduled to be permanently revoked as of July 1, 2027.

Here are the key changes set forth in the order:

• Until now, packages with a total value not exceeding $800 were exempt from customs duties upon entry into the United States. This exemption primarily applied to goods imported through e-commerce.

Starting August 29, 2025, any product imported into the United States with a value of up to $800 will be subject to full customs duties, according to its classification and country of origin. According to the explanation in the order, the suspension of the exemption stems from its misuse, including for the smuggling of dangerous drugs, counterfeit goods, or hazardous products. It should be noted that as of May 2, 2025, the exemption was already completely revoked for products originating from China and Hong Kong, as part of a national emergency declaration due to the worsening trade deficit.

• It should be noted that a new duty will also be imposed on packages imported into the U.S. via international mail (EMS; USPS) using one of two methods:
  • Ad valorem duty – a percentage of the value, according to the tariff rate of the country of origin; or
  • Specific duty – a fixed amount ranging from $80 to $200 per item, depending on the tax rate applied to the country of origin. This method will be available for a period of only six months.

We remain at your disposal for any questions or clarifications and will continue to monitor developments and provide updates accordingly.

Please note that this client update does not constitute legal advice and should not be relied upon without appropriate legal consultation.