No April Fools' Joke: April 2 Tariff Actions Are Expected

Reports have suggested that on April 2, 2025, President Donald Trump will likely announce reciprocal tariffs pursuant to the International Emergency Economic Powers Act (IEEPA) (50 U.S.C. 1701 et seq.) and investigations pursuant to Section 301 of the Trade Act of 1974 (Section 301) and Section 232 of the Trade Expansion Act of 1962 (Section 232). Recent reporting suggests these reciprocal tariffs could focus on certain countries that continue to run persistent trade surpluses with the U.S. These include Australia, Brazil, Canada, China, the European Union (EU), India, Japan, Mexico, South Korea, Russia and Vietnam.

The table below provides a high-level summary of the status of tariffs as of March 2025.

*These apply only to goods that do not qualify for duty-free treatment under the United States-Mexico-Canada Agreement (USMCA).

**These totals assume that products will not be subject to Section 232 tariffs for both steel and aluminum. The scope of Section 232 tariffs for derivatives overlap (e.g., 9403.20.00, HTSUS) but do not apply to the complete product.

A reciprocal tariff announcement could add several countries to those listed in the table. Representatives from many of these countries have already been in talks with the Trump Administration seeking to avoid reciprocal tariffs. The table provides a useful reference point in conceptualizing the impact of tariffs imposed to date and potential avenues for the imposition of additional tariffs. This Holland & Knight alert is intended as a high-level summary and is not authoritative.

America First Trade Policy Memorandum

The Trump Administration announced its intention to impose reciprocal tariffs through a memorandum on Feb. 13, 2025. To combat the trade deficit, the memorandum introduced the Fair and Reciprocal Plan, which seeks to counter nonreciprocal trading arrangements by "determining the equivalent of a reciprocal tariff with respect to each foreign trading partner."

Though the memorandum does not explicitly define "nonreciprocal" trade arrangements, its references to and alignment with the America First Trade Policy Memorandum issued on Jan. 20, 2025, suggest a broad interpretation – likely encompassing any trade arrangement that results in the U.S. importing more than it exports.

To implement this policy, U.S. federal agencies have been reviewing the impact of foreign tariffs, taxes, nontariff barriers or measures, exchange rates, etc., on the U.S. economy. The results of these investigations will conclude with the submission of reports to the Trump Administration on April 1, 2025.

For analysis on the America First Trade Policy, see Holland & Knight's previous alert, "An Overview of President Trump's Trade Policy to Date," Jan. 31, 2025.

Reciprocal Tariffs

The Trump Administration has indicated that it may impose reciprocal tariffs on the basis of the April 1, 2025, policy reports and on comments from the public, which closed on March 11, 2025.

Following the April 1, 2025, reporting deadline, the Trump Administration has indicated that it will begin issuing reciprocal tariffs on April 2, 2025. To date, the Trump Administration and some U.S. stakeholders have raised concerns with Canadian and EU dairy import policies and restrictions, Indian and EU tariffs on U.S. auto imports, Indian pharmaceuticals and Brazilian ethanol, among others. Holland & Knight is closely monitoring progress toward the announcement of reciprocal tariffs.

The Trump Administration has not specified the legal basis for imposing these tariffs. However, the reciprocal tariffs will likely be imposed pursuant to IEEPA. President Trump has interpreted IEEPA to authorize him to impose tariffs in response to an international economic emergency.

The recent tariffs on Canada, Mexico and China were imposed under IEEPA, with fentanyl and illegal immigration cited as the justifications for the emergency declaration. The justification for reciprocal tariffs could be related to unfair market access practices by trading partners, reducing the trade deficit or protecting U.S. manufacturing jobs.

For a closer look at the administration's memo on reciprocal tariffs, see Holland & Knight's previous alert, "Overview of the Trump Administration's Memorandum on Reciprocal Trade and Tariffs," Feb. 20, 2025.

Section 301 and Section 232

Reports have also suggested that on April 2, 2025, investigations could be announced pursuant to Section 301 of the Trade Act of 1974 (Section 301) and Section 232 of the Trade Expansion Act of 1962 (Section 232).

Section 301 authorizes the president to impose trade sanctions on foreign countries that violate U.S. trade agreements or engage in acts that are "unjustifiable" or "unreasonable" and burden U.S. commerce.

Section 232 authorizes the president to impose trade restrictions – such as a tariff or quota – if the U.S. Department of Commerce secretary determines, following an investigation, that imports of a good "threaten to impair" U.S. national security.

Reports suggest that the justification for these investigations will likely be unfair trade practices identified in response to the U.S. Trade Representative's (USTR) request for comments (for Section 301 investigations) or identified by the Trump Administration in prior executive orders (EOs) or memoranda (for Section 232 investigations).

Pursuant to Section 301, USTR invited public comments on China's "targeting the maritime, logistics, and shipbuilding sectors for dominance," with a deadline of March 24, 2025.

Pursuant to Section 232, the Trump Administration directed the Commerce Department to conduct Section 232 investigations into imports of copper and timber/lumber. Also, the Trump Administration increased Section 232 tariffs on imported steel and aluminum to 25 percent and eliminated all country exemptions, effective March 12, 2025.

For more information on the Section 232 tariffs, see Holland & Knight's previous alert, "Imposition of Tariffs by the United States on the Importation of Products from Mexico," March 4, 2025.

Additional Tariffs on April 2, 2025

Recent comments from Trump Administration officials, including President Trump and Commerce Secretary Howard Lutnick, suggest that, from April 2, 2025, the Trump Administration will focus on reciprocal tariffs targeting a few countries and sectors, essentially broadening the scope of tariffs that have been threatened or imposed during the first two months of President Trump's second term.

U.S. Department of the Treasury Secretary Scott Bessent, in an interview on March 18, 2025, indicated that countries imposing "substantial tariffs" on the U.S., which he labeled the "Dirty 15," would be targeted for tariffs. Recent reporting suggests these reciprocal tariffs could focus on certain countries that continue to run persistent trade surpluses with the U.S. These may include Australia, Brazil, Canada, China, the EU, India, Japan, Mexico, South Korea, Russia and Vietnam.

These comments suggest that the reciprocal tariffs will be applied on a countrywide basis rather than on certain products. While President Trump expressed skepticism for granting exceptions to the reciprocal tariffs, in comments made on March 21, 2025, he also suggested that there may be some "flexibility" on tariffs. It is unclear what form this flexibility may take.

The Trump Administration could leverage the April 2, 2025, tariff actions (i.e., the reciprocal tariffs, Section 301 tariffs and Section 232 investigations) as a starting point for bilateral negotiations with targeted countries. The Trump Administration has consistently used tariffs or the threat of tariffs as leverage to encourage trading partners to deliver concessions in order to avoid tariffs.

For example, the IEEPA tariffs imposed on Canada and Mexico were originally set to be applied on Feb. 4, 2025. Following negotiations, these tariffs were delayed until March 4, 2025. Then on March 5, 2025, the IEEPA tariffs were paused on goods qualifying for duty-free treatment pursuant to the USMCA.

The USMCA requires review by the three parties no later than July 2026. The Trump Administration may use the threat of reciprocal tariffs to induce Canada and Mexico to initiate the review and potential renegotiation this year.

In the meantime, the de minimis exemption, available to products valued under $800, will continue to be available to goods subject to IEEPA tariffs. The Commerce Department is working to develop a process for collecting IEEPA tariffs on exempted imports. Reports suggest that Congress is not interested in introducing legislation on the de minimis exemption until the process developed and implemented by the Commerce Department is allowed to work.

For more information or questions, please contact the authors or another member of Holland & Knight's Tariff Task Force.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.