On April 2, President Donald Trump issued an executive order (EO) to impose reciprocal tariffs on select countries. ECA's public policy counsel, Brownstein Hyatt Farber Schreck, LLP, has prepared the following detailed analysis of this development and what it means for the business and professional events industry and beyond.

Executive Order Imposing Reciprocal and Baseline Tariffs (Executive Order, Fact Sheet)

• Imposed Under IEEPA. The president invoked the International Emergency Economic Powers Act (IEEPA, 50 U.S. Code § 1701) to levy the reciprocal tariffs, citing “conditions reflected in large and persistent annual U.S. goods trade deficits.” IEEPA was also the mechanism used to impose the existing fentanyl- and immigration-based tariffs levied on Mexico, Canada and China in February.
• Initial 10% Tariff. Starting on April 5 at 12:01 a.m. EDT, the EO imposes a baseline across-the-board 10% tariff on all countries; as noted below, these are imposed on top of all existing duty rates with the exception of goods from Mexico and Canada.
• Country-Specific Tariff Rates. Starting on April 9 at 12:01 a.m. EDT, a country-specific reciprocal tariff regime will replace the baseline 10% tariffs for certain countries. The reciprocal tariffs regime effectively identifies a tariff charged to the United States by a specific country that includes “currency manipulation and trade barriers”; that rate is halved to determine the “discounted reciprocal tariff” that the United States will impose on the country on April 9. Country-specific rates are outlined in Annex I.
  • After the EO’s release, the White House later confirmed that the reciprocal tariffs are based on the large trade deficits these countries run with the United States; trade analysts argue that the formula is simply the trade deficit with a specific country divided by the country’s exports to the United States. The Office of the U.S. Trade Representative (USTR) subsequently released a methodology for calculating reciprocal tariffs, indicating that “the tariff rates that would drive bilateral trade deficits to zero were computed.”

• Exemptions. The reciprocal/baseline tariff regime currently does not apply to the following:
  • Services. Reciprocal tariffs currently do not apply to services contracts (e.g., professional services) or similar arrangements. The administration’s focus on goods over services reflects President Trump’s broader goal of revitalizing U.S. manufacturing.
  • Canada and Mexico. The two countries are not subject to the reciprocal or baseline tariffs. For both nations, the existing fentanyl-based tariffs — and United States-Mexico-Canada Agreement (USMCA) exemptions — continue to apply. If the fentanyl-based tariffs are revoked, the reciprocal EO states that non-USMCA goods will be subject to a 12% tariff.
  • Steel, aluminum, autos, and other sectors subject to current or future Section 232 “Reshoring” tariffs. The EO exempts products subject to current and future sector-specific “reshoring” tariffs implemented under Section 232 of the Trade Expansion Act of 1962. This currently includes steel, aluminum, and autos. Copper, pharmaceuticals, lumber, and semiconductors are also not subject to these tariffs, heavily implying that they will be subject to tariffs under Section 232 in the future. The EO also states that other goods subjected to Section 232 tariffs in the future will be exempted from these reciprocal/baseline tariffs.
  • Annex II. The EO also exempts goods listed in an “Annex II.” These are largely agricultural, pharmaceutical, and industrial inputs.

• Layering Existing Tariffs. The reciprocal tariffs will be applied in addition to all existing duty rates on foreign imports. For example, a 20% tariff is in effect on all goods imported from China. Thus, the minimum duty rate applied to Chinese imports on April 9 will be 54%. Select Chinese goods are also subject to Section 301 tariffs, which will further increase duty rates.

• Outlook. The secretary of commerce and USTR can recommend additional action if the tariffs are not considered effective in resolving the “emergency conditions,” and the tariffs can also be altered by the president via additional executive actions.

Outlook for Tariff Actions

This executive action does not mark the end of tariff announcements, and the duties outlined in the chart below may shift in response to negotiations between the United States and impacted companies over the coming days and weeks. On March 24, President Donald Trump issued an executive order (EO) to direct the secretary of state, in consultation with other agency heads, to impose a 25% tariff on all goods from countries that import Venezuelan oil “directly or indirectly.” The imposition of tariffs will be based on an investigation conducted by the secretary of commerce; however, the secretary of state is granted the authority to impose tariffs “in his discretion.” 

In addition, President Trump has indicated he will announce sector-specific tariffs intended to force manufacturers to shift production of targeted goods to the United States. These tariffs will target specific goods or industries, like pharmaceuticals and semiconductors, and are expected in the coming months. The sector-specific tariffs will likely be levied under Section 232 of the Trade Expansion Act of 1962 and either amend an existing tariff or direct a Commerce Department investigation.

Below outlines the tariffs charged by each country on U.S. goods and the reciprocal tariffs levied by the United States: