On February 5, 2025, the White House issued an amendment to an Executive Order (“EO”) issued by President Trump on February 1, titled “Imposing Duties to Address the Synthetic Opioid Supply Chain in the People’s Republic of China.” The amendment states that “de minimis treatment under 19 U.S.C. 1321 is available for otherwise eligible covered articles…but shall cease to be available for such articles upon notification by the Secretary of Commerce to the President that adequate systems are in place to fully and expediently process and collect tariff revenue” on said articles. While this amendment is a significant departure from the original text of the Order, which stated that “de minimis treatment…shall not be available” for any goods of Chinese origin, the amendment does not provide an estimated timeframe for the duration of de minimis reinstatement.

Crowell & Moring continues to monitor this and other developments in the customs space and their impact on business and industry.

Amidst all of the discussion about potential impacts in Europe of changes to US policy, some senior politicians have raised whether the EU could use the ACI to protect its interests. This article explores what the ACI is, how it works, what remedies it provides, and how business can influence those discussions.

Click here to continue reading the full version of this alert.

It was announced late on Monday that new U.S. tariffs on Canada will, like Mexico, be paused for 30 days to allow the U.S. and Canada time to negotiate.

Prime Minister Justin Trudeau said Canada is implementing a $1.3 billion plan to reinforce the U.S.-Canadian border and appointing a Fentanyl Czar, among other things.

At this time, the 10% tariffs on goods from China are set to start at 12:01 am EST on February 4th. More information on implementation of the tariffs on China can be found in the Federal Register, and via the latest guidance from U.S. Customs and Border Protection.

On February 3, President Trump confirmed reports of a one-month pause for the implementation of 25% tariffs on imported products of Mexico, following a conversation with President Claudia Sheinbaum of Mexico during which Sheinbaum agreed to immediately supply 10,000 Mexican National Guardsmen to the U.S.-Mexico border to assist with fentanyl interdiction and illegal migration.

This will be followed by negotiations between the U.S. and Mexico headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico.

On Saturday, February 1, 2025, President Trump signed three Executive Orders (“EOs”) following through with the promised tariffs targeting products of Canada, Mexico and China (the “February 1 EOs”), and the White House issued a supporting informational fact sheet.

The United States will impose 25% tariffs on all products of Mexico and Canada (except Canadian energy products, which are subject only to a 10% tariff), as well as a 10% additional tariff on all products of China.  The tariffs will apply to goods entered into the United States on or after 12:01 am (Eastern) on February 4, 2025

Legal Authority and Basis for Actions

The underlying authority used to enact the tariffs is IEEPA, the International Emergency Powers Act (50 U.S.C. §1701 et seq.).  Under IEEPA, in the event of a national emergency, the President can take immediate action to regulate any importation or exportation of property subject to U.S. jurisdiction. On January 20, 2025, President Trump declared a national emergency under the National Emergencies Act (50 U.S.C. §1601 et seq.) at the southern border (see Presidential Proclamation 10886).  President Trump used this national emergency he declared on Day One of his second term as the basis on which to take immediate tariff action under IEEPA.  In each of the February 1 EOs, the President expanded the scope of the national emergency declared in Proclamation 10886 to include the threat to “the safety and security of Americans, including the public health crisis of deaths due to the use of fentanyl and other illicit drugs,” and the failure of each target country to do more to combat drug trafficking organizations, drug/human traffickers, criminals and drugs.  The February 1 EOs state that the target countries’ failure to act constitute “an unusual and extraordinary threat, which has its source in substantial part outside the United States, to the national security and foreign policy [and, in the Mexico EO and the China EO, the economy] of the United States.”

Although the United States Mexico Canada Agreement (“USMCA”) provides duty free treatment to Canadian and Mexican originating goods, the agreement has an exception stating that nothing in the USMCA will preclude a Party from applying measures it considers necessary to protect its own essential security interests. See USMCA Article 32.2 (Essential Security).  In other words, the USMCA allows the Parties to potentially take tariff action if national security is at stake.

Scope of the Tariff Actions

Beginning at 12:01 am (Eastern) on February 4, 2025, the tariffs will apply as follows.

  • 25% on all products of Canada, but 10% on Canadian “energy” products.
    • As defined in an earlier EO by President Trump, the terms “energy” and “energy resources” mean “crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals, as defined by 30 U.S.C. §1606(a)(3). See Declaring a National Energy Emergency, EO 14156 (Jan. 20, 2025).
  • 25% on all products of Mexico.
  • 10% additional tariffs on all products of China.
  • In-Transit Exception. The tariffs will not apply to goods entered on or after February 4, 2025, if the importer certifies to CBP that the goods were loaded onto a vessel at the port of loading or in transit on the final mode of transport prior to entry into the United States before 12:01 am (Eastern) on February 1, 2025. 
  • Goods Covered. While the EOs do not expressly state as much, the tariffs will likely apply to products that are Canadian, Mexican or Chinese “origin” based on the U.S. customs substantial transformation analysis (similar to the origin determinations for assessing Section 301 tariffs).  Thus, tariffs may apply regardless of whether the goods are eligible for duty-free treatment under the USMCA.
  • No Exclusions. No exclusion process has been announced.
  • No De Minimis. No product of Canada, Mexico, or China shall be eligible for de minimis duty-free entry under the Section 321 program (19 U.S.C. §1321).
  • No Avoidance Under FTZ. If any product of Canada, Mexico or China is admitted to a foreign trade zone (“FTZ”) on or after 12:01 am (Eastern) on February 4, 2025, must be admitted as “privileged foreign status” (unless otherwise qualifying as “domestic status” under the customs regulations).  Therefore, when later exiting the FTZ for entry into the U.S. commerce, such goods will be subject to the tariff rate applicable at the time admitted to the FTZ – i.e., the tariffs announced in the February 1 EOs.
  • No Drawback. Duties collected because of the tariffs applicable to products of Canada, Mexico and China will not be eligible for drawback if exported.
  • Penalties. Non-compliance with these tariffs may be subject to civil and criminal penalties under IEEPA, which carries a 10-year statute of limitations. See 50 U.S.C. §1705.  These may apply in addition to customs penalties under, including, but not limited to, the 592 civil penalties.

What Comes Next?

The February 1 EOs will be followed by a formal notice in the Federal Register, which will reflect further details regarding the implementation of the tariffs.  The Federal Register Notice is expected to include the formal modifications to the Harmonized Tariff Schedule of the United States (“HTSUS”) such that importers and their customs brokers can properly claim the tariffs at the time of entry.  The HTSUS codes will be particularly salient in defining the Canadian “energy” products that will be subject to a 10% tariff.  The notice may also include details on the in-transit duty exemption certification process.      

The Department of Homeland Security, in consultation with other executive departments, will lead implementation, collection and enforcement of the tariffs and may issue regulations to support those efforts.  DHS also is expected to issue reports to Congress on the necessity of the tariffs in light of the national security threat facing the United States and related matters as required by IEEPA. See 50 U.S.C. §1703.    

The February 1 EOs previewed what the consequence of retaliatory tariffs by the target countries would be.  The President threatened to increase or expand the scope of the tariffs.  As the target countries each have announced their own retaliatory tariff scheme already (see below), more punitive actions by the Trump administration may be ahead.  

Retaliatory Tariffs

  • Canada

On February 2, the Government of Canada published a list of approx. CAD 30 billion of U.S. goods that will be subject to an additional 25% tariff also beginning Tuesday, February 4.  Covered goods include certain foods and beverages, appliances, apparel and footwear, cosmetics, motorcycles, pulp and paper.  The full list of specific goods according to their harmonized tariff schedule codes can be found here.  The Government of Canada also has outlined a framework and process for how it will consider remission requests for the tariffs on U.S. products, i.e., an exclusion process. See Process for requesting remission of tariffs that apply to certain goods from the U.S. (last modified Feb. 2, 2025).

Further, after a mandatory 21-day public comment period, Canada may impose a 25% tariff on an additional CAD 125 million in U.S. imports, covering passenger vehicles and trucks (including electric vehicles), trucks and buses, recreational vehicles and boats, steel and aluminum products, aerospace products, and certain food products. See Canada’s response to U.S. tariffs on Canadian goods (last modified Feb. 2, 2025).

Some provincial governments in Canada have also announced retaliatory measures against the U.S. tariffs on Canadian goods, including removing U.S. alcohol from provincial outlets, reviewing and potentially canceling contracts with U.S. companies, prohibiting U.S. companies from bidding on new contracts, and doubling tolls for U.S. commercial vehicles.

  • Mexico

On February 1, Mexican President Claudia Sheinbaum announced retaliatory tariff and non-tariff measures.  Reporting indicates that Mexico has been preparing possible retaliatory tariffs on U.S. imports (dubbed “Plan B”), ranging from 5% to 20% on products including pork, cheese, fresh produce, and manufactured steel and aluminum, but that the auto industry would be spared, initially.  Formal implementation of these tariffs and an effective date are pending.

  • China

On February 2, China’s Ministry of Commerce announced that China would take corresponding countermeasures against the U.S. action, but specific actions are yet to be announced, except that China intends to file a case against the United States at the World Trade Organization.

As of January 15, 2025, Commerce, Energy, State, and Treasury have each published their annual increase in civil monetary penalties for violations of U.S. export controls and sanctions regulations to account for inflation.  Below is a summary of the increases for calendar year 2025.

U.S. Department of Commerce
EAR Section2024 Maximum PenaltiesNew 2025 Maximum Penalties
15 CFR § 764.3(1)(i) – Export Controls Act of 2018$364,992$374,474
15 CFR § 764.3(1)(i) – International Emergency Economic Powers Act$368,136$377,700
U.S. Department of Energy
Part 810 Section2024 Maximum PenaltiesNew 2025 Maximum Penalties
10 CFR § 810.15(c)$124,732$127,973
U.S. Department of State
ITAR Section2024 Maximum PenaltiesNew 2025 Maximum Penalties
22 CFR § 127.10(a)(1)(i)The greater of $1,238,892 or the amount that is twice the value of the transaction that is the basis of the violation with respect to which the penalty is imposed.The greater of $1,271,078 or the amount that is twice the value of the transaction that is the basis of the violation with respect to which the penalty is imposed.
22 CFR § 127.10(a)(1)(ii)$1,028,988, or five times the amount of the prohibited payment, whichever is greater.$1,055,721, or five times the amount of the prohibited payment, whichever is greater.
22 CFR § 127.10(a)(1)(iii)$1,224,787$1,256,607
U.S. Department of Treasury
Statute2024 Maximum PenaltiesNew 2025 Maximum Penalties
50 U.S.C. 4301-4341 – Trading With the Enemy Act$108,489$111,308
50 U.S.C. 1701-1706 – International Emergency Economic Powers Act$368,136$377,700
18 U.S.C. 2339B – Antiterrorism and Effective Death Penalty Act$97,178$99,703
21 U.S.C. 1901-1908 – Foreign Narcotics Kingpin Designation Act$1,829,177$1,876,699
19 U.S.C. 3901-3913 – Clean Diamond Trade Act$16,630$17,062

Crowell & Moring, LLP continues to monitor export control and sanctions developments and their potential impact on customers and businesses going forward.

Yesterday, Representative John Moolenaar (R-MI) of the House Select Committee on the Chinese Communist Party, along with House Ways & Means Committee member Tom Suozzi (D-NY), reintroduced a bill in the House of Representatives to revoke Permanent Normal Trade Relations (“PNTR”) with the People’s Republic of China.  When reintroducing the bill, Molenaar cited to Trump’s “America First Trade Policy” memo issued on Monday, which instructed the Department of Commerce and the USTR to assess legislative proposals regarding Permanent Normal Trade Relations with China.

The bipartisan “Restoring Trade Fairness Act” was first introduced in September 2024 as a companion bill to the identical “Neither Permanent nor Normal Trade Relations Act” proposed in the Senate by Tom Cotton (R-AR) and Jim Banks (R-IN) and would revoke China’s PNTR with no annual Congressional recertification vote.  Crowell has published an in-depth summary of these earlier proposals, which were introduced prior to Trump’s inauguration.

The bill would create a new tariff column specifically for Chinese-origin goods, imposing statutory minimum tariffs of 35% for “non-strategic” goods and 100% for “strategic” goods, the latter of which are designated in the bill by HS code and are based upon the Biden administration’s Advanced Technology Product List and China’s Made in China 2025 plan. Under the proposal, the tariffs would be phased in over five years—10% of the increase in year one, 25% in year two, 50% in year four, and 100% in year five.

The bill also has large implications for goods entering the U.S. under Section 321 of the Tariff Act of 1930—so-called de minimis shipments—including shipments not of Chinese origin. According to the bill’s text, all goods entering from “covered nations” as defined under Section 4872 of title 10 of the United States Code would not be eligible for de minimis treatment. Covered nations include not only the PRC, but also North Korea, the Russian Federation, and the Islamic Republic of Iran. Additionally, the bill would require customs brokers for other de minimis shipments.

Finally, the bill would establish a trust fund under the auspices of the U.S. Department of the Treasury to compensate farmers and manufacturers injured by any possible Chinese retaliation to U.S. trade actions, the money for which is to be provided from the increased duties on Chinese goods.  Such an arrangement has some precedent under U.S. law. The Continued Dumping and Subsidy Offset Act of 2000 (“CDSOA”), which was repealed in 2006, distributed duties assessed from an antidumping or countervailing duty order to affected domestic producers. While the CDSOA was relatively quickly repealed and subject to a number of WTO-disputes, eligible U.S. producers were able to receive significant compensation for harm from unfairly imported goods while the law was in effect.

Crowell & Moring continues to monitor developments in the trade and customs spaces and their impact on businesses.

President Trump signed a raft of Executive Orders (E.O.) in the initial days of his new administration, several of which relate to sanctions.  Here is an initial run-down:   

Designating Cartels as Foreign Terrorist Organizations

On January 20, the President signed an executive order that creates a process for cartels and “other transnational organizations such as Tren de Aragua (TdA) and La Mara Salvatrucha (MS-13)” to be designated as Foreign Terrorist Organizations (FTO) or Specially Designated Global Terrorists (SDGT). This E.O. does not make any designations, but rather requires the Secretary of State to make recommendations in 14 days regarding the designation of “international cartels” or “other transnational organizations” as FTOs or SDGTs.

Sanctions Regarding the International Criminal Court

Also on January 20, the President signed an executive order rescinding a long list of executive orders and actions by the prior Administration (the Rescission E.O.). Among other actions, the Rescission E.O. rescinds Executive Order 14022 of April 1, 2021, which terminated the first Trump Administration’s sanctions program targeting the International Criminal Court (ICC).  The new action solely rescinds former President Biden’s termination of the program. Thus far, President Trump has not taken affirmative steps to re-establish the ICC sanctions program.   

Sanctions Regarding Peace, Security, and Stability in the West Bank

The Rescission EO also rescinded Executive Order 14115 of February 1, 2024, which authorized sanctions on persons undermining peace, security, and stability in the West Bank. This action terminates the West Bank sanctions program and will result in the de-listing of persons designated under that authority.

Sanctions Regarding Cuba

In the last week of his presidency, former President Biden took several actions to reduce sanctions pressure on Cuba. The Recission EO reverses these actions. 

First, Biden removed Cuba from the list of State Sponsors of Terrorism. The Recission EO rescinds Biden’s presidential memorandum certifying Cuba’s removal from the SST list. However, designating a state as an SST requires specific determinations and President Trump has not yet announced additional steps to re-designate Cuba as an SST. 

Second, Biden withdrew National Security Presidential Memorandum 5 (NPSM-5), which among other things established the Cuba Restricted List that identified entities controlled by, or acting on behalf of, the Cuban military, intelligence, or security services or personnel, and imposed heightened restrictions on such entities. The Rescission EO rescinds Biden’s withdrawal of NSPM-5. 

Separately, Biden also suspended Title III of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 for 6 months starting January 29, 2025. Title III provides a private cause of action for certain owners of claims to property confiscated by the Cuban government against any entity that is “trafficking” in that confiscated property. This provision was routinely waived by successive presidents until President Trump allowed it to come into effect in 2019.  The Recission E.O. does not mention this action and thus appears to leave the 6-month suspension of Title III in place. Absent further action by President Trump, the waiver will expire in 6 months.   

Re-Designation of the Houthis as an FTO

In January 2021, President Trump designated Ansarallah, also known as the Houthis, as a foreign terrorist organization. The Biden Administration reversed that designation in February 2021, citing the impact on the dire humanitarian situation in Yemen, but re-designated the Houthis as a specially designated global terrorist (SDGT) in January 2024 in response to ongoing attacks on ships in the Red Sea. 

On January 22, President Trump released an executive order that requires the Secretary of State to report to the President within 30 days “concerning the designation of Ansar Allah as a foreign terrorist organization.”  The E.O. also provides that “[w]ithin 15 days” after submitting that report, “the Secretary of State shall take all appropriate action, consistent with 8 U.S.C. 1189, with regards to a designation of Ansar Allah as a terrorist organization.” Like the cartel E.O., this E.O. does not make any designations directly, but rather calls for the Secretary of State to make a recommendation on the designation and implement that recommendation.

On his first day in office, President Trump rolled out a sprawling set of directives to the heads of numerous government agencies charged with shaping U.S. trade policy.  While stopping short of enacting new tariffs, the Presidential Memorandum defining an “America First Trade Policy” lays the investigative groundwork for potentially sweeping changes to tariffs and the existing trade environment.   The Memorandum requires various agencies—including, e.g., the Department of Commerce, the Department of the Treasury, and the Office of the U.S. Trade Representative (“USTR”)—to issue upward of twenty reports by April 1, 2025, each one covering a unique trade-related issue pertaining to certain key themes, including unfair and unbalanced trade with all U.S. trading partners, the relationship and impact of trade relations with the People’s Republic of China, and the state of economic security matters relevant for goods entering and exiting the United States. 

The Presidential Memorandum suggests that the administration may leverage several trade policy tools to carry out a wide-ranging agenda, including the International Emergency Economic Powers Act (“IEEPA”); trade actions under Section 301 of the Trade Act of 1974, Section 232 of the Trade Expansion Act of 1962, and Section 338 of the Tariff Act of 1930; trade remedies mechanisms; export controls; and others.  The directives outlined below stand to have a significant impact on U.S. importers, exporters, and other supply chain stakeholders.

Tariffs Under Novel Laws

The Memorandum requires various agencies to investigate unfair foreign trade practices and recommend any actions to counteract such practices under a number of federal statutes.  Many of the authorities cited in the Memorandum have rarely, or ever been used to impose import duties.

These authorities include:

  • The International Economic Power Act (IEEPA, 50 USC § 1701 et seq).  Under IEEPA, the President has the authority to impose unlimited import duties to remedy a foreign threat in conjunction with a national emergency.  While IEEPA has been used by numerous administrations to issue sanctions on various countries, industries, and individuals, to date IEEPA has not been used to implement tariffs. 
  • Section 338 of the Tariff Act of 1930 (19 USC § 1338).  Section 338 authorizes the President to impose new and additional duties on imports from foreign countries that are discriminating against U.S. commerce. The new or additional rate of duty imposed cannot exceed 50 percent ad valorem.  This statute has not been used by a Presidential administration since the early 1900s.
  • 15 U.S.C. § 73:  This statute provides the authority to issue duties under federal antitrust laws.  The Department of Treasury has the authority to enact any regulations to enforce this authority.
  • 15 U.S.C. § 75: This statute gives the President the authority to retaliate against the prohibition of US imports with reciprocal tariffs. 

Section 301

Section 301 of the Trade Act of 1974 delegates to the USTR authority to take actions (e.g., implementing tariffs or withdrawing from trade agreements) against countries that are engaging in unfair trade practices and violating U.S. trade agreements.  President Trump utilized Section 301 tariff actions in his first term, and the tariff scheme is still in place today.  While the January 20 Presidential Memorandum does not announce immediate action on the existing Section 301 regime it may lay the groundwork for new and expanded Section 301 tariff implementation.

  • Identify Potential Section 301 Targets: USTR, the Department of Commerce, and the Senior Counselor for Trade and Manufacturing will review unfair trade practices and potential remedies.
  • Review Existing Trade Agreements with China: USTR will review the U.S.-China Economic and Trade Agreement to determine if China is acting in accordance with the agreement.  Based on the review, USTR can recommend actions such as imposing new tariffs, potentially under Section 301.
  • Revise Existing Section 301 Actions against China: USTR will assess the Four-Year review of the Section 301 investigation into China’s Technology Transfer, Intellectual Property, and Innovation practices and policies that was recently completed by the Biden administration.  Following its review, USTR will consider modifications to the existing tariffs, especially in regard to industrial supply chains and circumvention through third countries.  USTR will also update estimated costs imposed by China’s unfair trade practices.
  • Identify Potential Additional Section 301 Actions against China: USTR will investigate and recommend actions in response to other practices and policies from China that could be unreasonable or discriminatory and that may burden U.S. Commerce.
  • Review of China’s IP Policies: The Department of Commerce will review the status of U.S. intellectual property rights granted to PRC persons and recommend actions for a reciprocal treatment of IP rights with China.

Section 232

The Memorandum addresses several “additional economic security matters” and signals that the President may utilize Section 232 of the Trade Expansion Act (which grants the President the authority to impose tariffs or other trade restrictions on imports that threaten national security) remedy several of these economic security matters.

  • Review of Industrial and Manufacturing Imports: The Secretary of Commerce, in collaboration with the Secretary of Defense and other relevant agencies, will conduct a comprehensive review of the U.S. industrial and manufacturing base to determine if investigations are needed to adjust imports that may threaten national security, and evaluate the effectiveness of current exclusions, exemptions, and import adjustments on steel and aluminum and recommendations based on these findings.
  • Illegal Migration and Fentanyl: The Memorandum further requires an assessment of illegal migration and fentanyl flows from Canada, Mexico, PRC, and any other relevant jurisdictions.  In related breaking news, President Trump stated in a White House press conference on January 21 that he is considering applying a 10% tariff “on China” as early as February 1 in connection with illicit fentanyl smuggling. 
  • Foreign Government Subsidies: The Director of the Office of Management and Budget will assess the impact of foreign government subsidies on U.S. Federal procurement programs and propose guidance to mitigate any distorting impact.

Re-Evaluate Section 321 De Minimis Treatment

The Department of Treasury, Commerce, Homeland Security, and the Senior Counselor for Trade and Manufacturing will assess losses in tariff revenues and risks in importing counterfeit products and contraband drugs resulting from the current de minimis exemption (Section 321), which allows imported shipments valued below $800 to enter the U.S. duty-free.

Trade Remedies

The Presidential Memorandum addresses several issues related to trade remedies proceedings, which encompass antidumping and countervailing duty investigations under the authority of the Department of Commerce.  

  • Evaluating Exchange Rate Manipulation: The Department of Treasury will lead an investigation on policies and practices regarding major U.S. trading partners’ exchange rates between their home currencies and the U.S. dollar.  The investigation may identify countries that could be currency manipulators and provide recommendations on actions to counter currency manipulation or misalignment accordingly.  Such investigations could have a significant impact on countervailing duty proceedings, specifically.  For example, in 2021, the Department of Commerce announced its first and only affirmative finding of currency-related subsidies relating to certain imports from Vietnam and imposed a countervailing duty on these products.
  • Reviewing Regulations Regarding AD/CVD Laws and Verification Procedures: The Department of Commerce will review policies and regulations pertaining to the application of antidumping and countervailing duty (“AD/CVD”) laws, including transnational subsidies, cost adjustments, and affiliations.  Commerce is also tasked with reviewing procedures related to the verification of questionnaire responses to assess whether such procedures adequately prompt compliance on behalf of foreign respondents and governments involved in AD/CVD proceedings, and if not, the Department of Commerce will provide modifications to the procedures and regulations as necessary.

Suspending China PNTR

The Memorandum also instructions the Department of Commerce and the USTR to assess legislative proposals regarding Permanent Normal Trade Relations with China.  Crowell has published an in-depth summary of these proposals, which were introduced prior to Trump’s inauguration.

Export Controls

The Memorandum instructs governmental reviews of the current export control system and its enforcement policies, which regulate the transfer of goods, technology, software, and services from the U.S. to foreign entities.

  • Review of Existing Export Controls: The Departments of State and Commerce will review the current export controls and advise on potential modifications, with a special focus on maintaining domestic technology innovation and eliminating loopholes in existing export controls that may enable transfer of strategic goods, software, services and technology to strategic rivals and their proxies.
  • Review of ICTS’s Role: The Department of Commerce will review and recommend actions on rulemaking by the Office of Information and Communication Technology (ICTS) regarding connected vehicles (defined in recent final rulemaking as vehicles driven or drawn by mechanical power and manufactured primarily for use on public streets, roads and highways, that integrate onboard networked hardware with automotive software systems to communicate via dedicated short-range communication, cellular telecommunications connectivity, satellite communication, or other wireless spectrum connectivity with any other network or device), and potentially other connected products.
  • Review of EO 14105: The Departments of Treasury and Commerce will review Executive Order (“EO”) 14105 (Addressing U.S. Investments in Certain National Security Technologies and Products in Countries of Concern), which found that advancement by countries of concern in sensitive technologies/products critical for the military, intelligence, surveillance or cyber-enabled capabilities of such countries constituted a threat to U.S. national security, and declared a national emergency to deal with this threat.  The Departments will assess whether the final implementing rule includes sufficient controls to address the national security threats, and potentially modify the Outbound Investment Security Program, which regulates outbound investments by U.S. persons.

On January 21, 2025, U.S. Customs and Border Protection (CBP) published a notice of proposed rulemaking that would make goods subject to tariffs under Sections 232, 201, and 301 ineligible for the de minimis duty exemption under the Section 321 Program, which allows imported shipments not exceeding $800 to enter the United States duty-free.  To help CBP identify and ensure that such goods would not claim 321 de minimis exemption, the proposed rule would require goods entered under this program to enter with a 10-digit HTSUS classification.

This January 21 proposed rule follows an earlier notice of proposed rulemaking by CBP, also on low-value shipments, published on January 14, 2025. The January 14 proposed rule aims to establish a new “enhanced entry process” for low-value shipments subject to partner government agency regulations. The enhanced entry process would require the submission of advance electronic data about the contents (including 10-digit HTSUS classification), origin, and destination of the shipments. CBP also proposed modifications to the existing entry process, renamed as the “basic entry process.”

Currently, CBP processes approximately 4 million de minimis shipments per day. The proposed rules address administrative pressures faced by CBP to effectively enforce trade laws, particularly with identifying high-risk shipments of illegal drugs and counterfeit goods. The January 21 proposed rule also addresses growing concerns over the use of the de minimis exemption to circumvent certain trade remedies and national security actions, such as tariff actions under Sections 232, 201, and 301.

There is an opportunity for public comment for both proposed rules, but the comment windows are closing soon. CBP will accept public comments in connection with the January 14 proposed rule (developing and modifying processes for entering de minimis shipments) by March 17, 2025, and in connection with the January 21 proposed rule (excluding from the de minimis exemption any goods subject to trade or national security actions under Section 232, 201 or 301 tariff regimes) by March 24, 2025.