26 August 2025 Trade Talking Points | Latest insights from EY's Trade Strategy team (August 2025)
On 31 July, the Trump Administration released an Executive Order, announcing "Further Modifying the Reciprocal Tariff Rates" to revise and reinstate the President Trump's Reciprocal Tariff Policy applicable to US trading partners, first announced on 2 April 2025. (See EY Global Tax Alert, US imposes additional tariffs on imports from trading partners, dated 1 August 2025.) The revised tariff rates announced on 31 July become applicable to goods entered for consumption, or withdrawn from a warehouse for consumption, beginning 7 August 2025. Goods loaded for shipment before 7 August and in transit on the final mode of transportation before 5 October 2025 will not be subject to the revised rates. In an Executive Order issued on 6 August, "Addressing Threats to the United States by the Government of the Russian Federation," the Administration announced revisions to the US tariffs announced in April applicable to Indian-originating goods. The 6 August revised rates will increase to 50% the original 25% tariff rate on Indian-originating goods, applicable to goods entered for consumption, or withdrawn from a warehouse for consumption beginning 27 August. If goods are loaded for shipment before 27 August and in transit on the final mode of transportation before 17 September, they will not be subject to the revised rates. (See EY Global Tax Alert, US imposes additional tariffs on India for buying oil from Russia, dated 6 August 2025.) As Illustrated by the table below, listed countries will now be subject to a country-specific tariff rate. If a country is not listed below, it will remain subject to the 10% US tariff it has faced since April. For example, Australia is not listed — therefore, a 10% tariff rate on Australian-origin goods will continue to apply, regardless of the current Australia-United States Free Trade Agreement (AUSFTA). The 35% rate shown for Canada came into effect on 1 August.
The table above reflects all bilateral "deals" with the US negotiated and agreed to prior to 31 July, including the European Union, Indonesia, Japan, South Korea, Philippines and Vietnam. The Executive Order also recognizes that some countries in the above table are on the verge of concluding a "deal" with the Trump Administration, however, until an agreement is reached and published in the US Federal Register, the originating-goods of that country will remain subject to the additional ad valorem duties (e.g., South Africa at 30%). The Executive Order also extends a warning to businesses that intend to transship their goods via a third country in an attempt to minimize or circumvent their tariff exposure. Goods that the US Customs and Border Protection (CBP) finds to have been transshipped for the purposes of evading duties will be subject to an additional 40% tariff rate, in addition to other applicable fines or penalties. On 30 July, the Trump Administration announced the removal of the de minimis exemption for packages valued at less than US$800. From 29 August, packages sent to the US that would historically have qualified for the exemption will now be subject to tariffs. (See EY Global Tax Alert, US suspends duty-free de minimis treatment for low-value shipments, dated 1 August 2025.) The new process will become effective with respect to packages (goods) entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Time (ET) on 29 August 2025. If packages are sent through the international post network, the tariff rate must now be calculated according to two approaches from which importers may choose for the next six months (with this six-month period starting from 29 August):
On 24 July, the United States Trade Representative (USTR) announced the end of negotiations with the Australian Government to unlock market access for US-origin beef. USTR negotiations on beef are one of many active negotiations with US trading partners that align to the USTR's policy agenda to identify and reduce alleged "unfair" trading practices undertaken by US trading partners. US-origin beef had been restricted for export to Australia after a neurodegenerative disease outbreak in 2003. Limited access was later granted in 2019 for cattle that was born and raised in the US (not of mixed origin from Canada or Mexico), and able to meet certain biosecurity requirements. Negotiations on the introduction of US-origin beef to the Australian market began in 2015, along with reviews into the suitability to permit access to other non-Australian-origin beef. According to the Australian Bureau of Statistics, in 2024, Australian-origin beef exports were Australia's second largest export, accounting for AU$4.4b (£2.14b) in current prices. Imports of US-origin beef into Australia in 2024 were valued at AU$2.5m (£1.2m) in current prices. On 18 August, the US Department of Commerce, through the Bureau of Industry and Security (BIS), added 407 new Harmonized Tariff Schedule (HTS) codes to the list of products considered steel or aluminum derivative products. This means tariffs based on Section 232 of the Trade Expansion Act 1962 (S232) will apply to the steel and aluminum content. Any non-steel and non-aluminum content will remain subject to applicable tariffs announced in April 2025 and later. The S232 tariffs became applicable to products that were entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. ET on 18 August 2025. The US introduced a new "Inclusions Process" on 10 February 2025, pursuant to Presidential Proclamations 10895 and 10896, and required the US Secretary of Commerce to establish a process for including additional derivative aluminum and steel articles within the scope of the ad valorem duties. This process was implemented on 30 April and established two-week submission windows within which businesses may seek to "include" steel and aluminum derivative products that were not initially captured in the original S232 tariffs. Two-week submission windows are opened every four months in the first two weeks of May, September and January. The current (second) window will be open for businesses to submit "inclusion requests" during the first two weeks of September 2025. The next submission window will then open in January 2026. Businesses should consider their exposure to the newly included HTS codes and consider whether they would like to participate in the process. On 31 July, Secretary of State for Business and Trade Johnathan Reynolds presented the "Backing Your Business" plan to Parliament. The plan outlines the UK Government's long-term strategy to support small and medium-sized enterprises (SMEs) to compete effectively and contribute to the UK economy. According to the statistics released by the Department of Business and Trade (DBT) in October 2024, SMEs comprise 99.8% of UK businesses, and provide 60% of private sector jobs. Through the plan, the government projects that a 1% increase in annual growth for SMEs could contribute up to £320b to the UK economy by 2030. The plan establishes five key areas that will support UK SMEs to expand their capabilities, including initiatives that will:
From 1 August 2025, British-origin steel will benefit from the restoration of a Country Specific Quota (CSQ) applicable to construction-specific steel products. The European Commission's decision to increase market access for UK steel producers will permit exports of up to 27,000 tons per quarter to benefit from duty free treatment. This change is expected to reduce costs and potentially save UK steel producers millions of pounds annually, in line with the Government's Plan for Change aimed at recovering Britain's industrial strength. On 5 August, the UK and Switzerland agreed on the recognition of professional qualifications between the two countries. This means that qualified professionals from both countries in regulated sectors have a clear and streamlined process for their qualifications to be recognized in the other. The agreement also allows both UK and Swiss professional regulatory bodies to retain their independence and authority in the following ways:
On 12 August, the UK Government announced that the Egyptian Government will not impose mandatory halal certification requirements for the import UK-origin dairy products. This decision affects UK-originating cheese, milk and butter. These products were originally scheduled to be subject to Halal certification from January 2026. This revision is expected to reduce administrative burdens for British exporters, saving them more than £1,000 in certification fees per shipment. The UK is one of the largest exporters of dairy products to Egypt, with £26m worth of dairy products exported in 2024. The UK Government has published the remaining sector plans outlined in the Industrial Strategy published on 23 June 2025. On 31 July, the UK Trade Remedies Authority (TRA) launched the Trade Remedies Advisory Service to help UK businesses navigate trade remedy investigations. The service aims to simplify the process for businesses, particularly SMEs, who seek to engage with the TRA on potential trade issues. The service will offer increased guidance for businesses through webinars, factsheets, workshops, enhanced data monitoring to identify trade concerns, and streamlined application procedures with interactive guidance tools and dedicated industry support. On 31 July, the UK TRA published findings recommending that an anti-dumping measure on bicycles and certain bicycle parts imported from China be upheld until 30 August 2029. This measure is aimed at protecting the UK's bicycle industry, which is comprised mostly of SMEs. The TRA imposed duties ranging from 19.2% to 48.5% on imports of Chinese bicycles and bicycle parts. The TRA found that without the measure, the dumping activities identified at the time of its implementation would likely resume, potentially resulting in losses for UK producers of up to £9m per year. A period of consultation on the finding is now open until 25 August 2025, during which stakeholders can comment through the TRA's public file and provide additional evidence before a final recommendation is submitted to the Secretary of State. On 28 July, the European Commission imposed anti-dumping duties on imports of epoxy resins — a chemical product used to improve adhesion, resistance to corrosion and insulation — from Mainland China, Taiwan and Thailand. The Commission stated that dumping activities from these three countries were causing harm to the EU industry. The duties range from 17.3% to 33% for Mainland China, 10.8% to 11% for Taiwan, and 29.9% for Thailand. Epoxy resins are utilized in construction, transportation and the production of adhesives, paint and coatings. On 6 August, the European Commission (EC) implemented duties ranging from 26.4% to 26.9% on imports of décor paper from China. This type of paper is commonly used for coating furniture during production, as well as in the construction and renovation sectors. The Commission stated that these imports were being sold at dumped prices, which negatively affected the EU industry. This measure aims to improve the competitiveness of EU producers of décor paper, which collectively employ more than 2,000 individuals across the EU. On 12 August, China implemented a preliminary anti-dumping duty on Canada's canola seed imports at a rate of 75.8%, which took effect on 14 August 2025. This action was in response to Canadian tariffs on electric vehicles of Chinese origin. China is Canada's largest importer of canola seed, making up 67% of total canola seed exports worth approximately CA$4b. On 15 August 2025, China filed a complaint with the WTO against Canada's steel tariffs.
Document ID: 2025-1754 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
