The White House issued an Executive Order (EO) reducing the cumulative effect of recent trade actions.
Do you have to pay duty on duty?
The anti-dumping/ countervailing tariffs imposed recently include:
- 25% on certain automobiles (April 2025)
- 25% on auto parts (May 2025)
- 50% tariffs on select Canadian and Mexican aluminum and steel products
This latest EO "unstacks" certain tariffs. Multiple rates of dutywill no longer apply in some cases.
Understanding "Stackable Tariffs." Initially, the many Trump tariffs were designed to stack: E ach new duty was applied on top of existing ones.
For example:
- Base duty (MFN rate):2.5%
- Section 301 tariff: 25%
- IEEPA fentanyl tariff: 20%
- IEEPA reciprocal tariff: 125%
- Total duty:172.5%
Key Changes to Stackable tariffs:
The EO removes the stacking effect for certain tariffs, including:
Auto/Auto Parts (Section 232 tariffs) – No longer subject toCanada/Mexico fentanyl, aluminum/steel, and fentanyl-related
- Before: Auto part (HTS 8708.99.6890) =25% (auto tariff) + 25% (aluminum tariff) = 50%
- Now : Only 25% auto tariff applies.
Getting relief from previously paid stackable tariffs
Getting refunds for duty paid back from March 4, 2025 will be possible. Importers can claim refunds for overpaid stacked tariffs.Also, there will be no need for country-of-melt/cast reporting on certain auto parts.
Custom's ACE System not able to handle Stackable Tariffs
US custom's Automated Commercial Environment (ACE) system faces challenges is not designed to handle more thanb two overlapping tariffs. When tariffs are unstacked or modified retroactively (like this EO), ACE requires manual updates, leading to delays.Updates to The Harmonized Tariff Schedule (HTSUS) will take several weeks- expected by mid May, 2025
Limited Automation for Refunds– Importers often must filePost Summary Corrections (PSCs)or protests to reclaim overpaid duties, adding administrative work.
