Navigating Executive Orders From the Oval Office

Their publication and oft-confusing language define the Administration’s approach to managing intricate and burdensome customs legal and operational issues through the use of these EOs. They are a bold, and perhaps risky government procedural endeavor. These developments continue to be released amidst a flurry of media reports and administrative challenges, leading to heightened uncertainty and operational pauses.

What happened on Friday through today?

• Section 232 tariffs for steel and aluminum products were set at 25% for a start date of March 12, increasing the previous 10% tariff on aluminum and eliminating previous country exemptions, quotas, and product exclusions on these tariffs, while also expanding the scope to certain derivatives of steel and aluminum.
• The White House issued a policy reversal of a previous instruction regarding imports from China and low value shipments, or de minimis entries. This was not a minor change but rather one that affects a huge swatch of imports from China and one which might well be mirrored in trade actions against other trading partners.
• The White House is expected to release an EO on “reciprocal tariffs” this week.

For these reasons, this alert describes this Administration’s circumvention of traditional trade policy decisions and tariff applications.

A Chaotic Process

To say the situation is fluid may be an understatement. On Day One, the newly inaugurated president signed a trove of Executive Orders, including his America First Trade Policy. These were widely anticipated given the president’s campaign pledge that tariffs would be imposed “on day one.” That did not happen.

Later that day, news was again made from President Trump’s remarks that tariffs on Mexico and Canada might be launched on February 1. Similarly, long-awaited news on tariffs for imports from China came the following day. As these reports were persisting, on January 26, the president announced immediate tariffs on Colombia. These tariffs were rescinded within a few hours through negotiations with that country’s leadership.

In the following days, further escalated discussions regarding the February 1 tariffs for Mexico and Canada led to a penultimate January 31 report moving the tariffs to March 1. Within the hour, presidential remarks rebuffed the March 1 reports as false, affirming the February 1 timeline. Consequently, on February 1, the president signed three EOs imposing 25% tariffs on Canada and Mexico and 10% on imports from China. The Canada EO was promptly published on the White House website the same day, while the remaining EOs were made public between Sunday and Monday morning of February 3.

Prior to their official release, the text of these alerts was leaked and widely circulated, creating a buzz before the White House’s formal posting. Proclamations on the EOs were subsequently published in the Federal Register on February 3. However, shortly thereafter, the implementation of the Canada and Mexico tariffs were paused.

That takes us to the present, where between last Friday and today, more EOs were announced, amending the EO on China with respect to De Minimis shipments, increasing and expanding the Section 232 tariffs on steel and aluminum, and introducing reciprocal tariffs.

The historic process for implementing Special Tariffs through Executive Orders

• Declaration and Notification: whether following a formal investigation (e.g., for Section 301 and 232 tariffs) or more recently through declaration of a national emergency under the International Emergency Economic Powers Act (IEEPA), the president is traditionally expected to declare and formally notify Congress of the special tariff measure via an EO or similar Presidential Action, with the notification published shortly after in the official Federal Register. This latter process cannot be completed until the notice is submitted for public inspection a day before publication.
• Implementation Timeline: The proclamation describing tariff changes must be released before the International Trade Commission (ITC) can compile the new tariff numbers covering the range of affected imports, (Chapter 99 numbers). This administrative process, including distribution through US Customs and Border Protection (CBP) systems, typically takes three to five days, though it can be expedited if necessary. Because of the technical and programming nuances that these changes can require, it may be a question of whether quick implementation leads to administrative delays or errors in the Automated Commercial Environment (ACE) system.

Final Thoughts

Timeline and Process

Understanding the timeline from EO issuance to final publication in the Federal Register is crucial and historically have provided both US Congress and the trade community with sufficient time to review the policy decision and prepare a compliance strategy. Yet the speed of these announcements since Inauguration Day has already led to procedural confusion and possible errors.

• Companies will want to pay close attention to decisions emanating from Washington and determine what is “official” versus a media headline. High-level counsel should be sought.
• The announcement on Section 232 tariffs on steel and aluminum has only been released for the steel EO, and we are still waiting the aluminum EO, as well as the floating-rate notes for both EOs. Because the country exemptions, quotas and product exclusions will be terminated as of March 12, other tariff mitigation solutions will need to be sought.
• De Minimis Provision: While the specifics of how the de minimis provision will be applied remain unclear, it is essential to consider the potential impact on imports from China during the affected dates.
• A new EO concerning reciprocal tariffs is anticipated but has not yet been issued. Details remain unclear, including the specific targets of this order. Stakeholders should prepare for potential changes in tariff structures and consider the implications for their supply chains and US customer base.

Watch This Space

We will continue to monitor the situation closely and provide updates as more information becomes available. Should you have any questions or require assistance, please do not hesitate to contact our team of former senior attorneys from CBP and the US Treasury Department.

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