Trump Administration's Tariff Puzzle: Treating Transshipped Goods

The Trump administration's new tariffs on transshipped goods, which pass through multiple countries before arriving in the US, have created confusion among importers. A 40% penalty is imposed on transshipped goods, but the administration is also exploring new rules to apply higher tariffs on components that come from one country, are incorporated into a product in another, and then shipped to the US. Trade lawyers and supply chain professionals are seeking clarification from the Office of the US Trade Representative, but have received no satisfactory answers.

The Trump administration's new tariffs on transshipped goods, which pass through multiple countries before arriving in the US, have sparked confusion among importers. A 40% penalty is imposed on these goods, but the administration is also exploring new rules to apply higher tariffs on components that come from one country, are incorporated into a product in another, and then shipped to the US. Trade lawyers and supply chain professionals are seeking clarification from the Office of the US Trade Representative (USTR), but have received no satisfactory answers.

According to the Trump administration's "America First Trade Policy" memorandum, the USTR is directed to review various tariff- and tariff-adjacent levers to further the new trade policy. The latest developments in tariff enforcement, including the new rules on transshipped goods, have been tracked by Reed Smith’s International Trade and National Security team [1].

The current tariff status is complex and ever-changing. As of August 6, 2025, the Court of International Trade (CIT) permanently enjoined two sets of tariffs: the "fentanyl" tariffs on Canadian-, Chinese-, and Mexican-origin goods and the reciprocal tariffs. The government has filed notice of its appeal and asked to stay enforcement of the ruling pending the outcome of the appeal. The Federal Circuit heard oral argument in the case on July 31, 2025, and the tariffs remain in effect due to the stay [1].

The 40% penalty on transshipped goods, effective August 7, 2025, is part of a broader effort to address transshipment practices that evade US tariffs. However, the administration is also considering higher tariffs on components that pass through multiple countries before reaching the US. The proposed changes aim to address the complex nature of global supply chains and ensure that tariffs are applied consistently [1].

Trade lawyers and supply chain professionals have expressed concerns about the lack of clarity and consistency in the new tariff rules. They have sought clarification from the USTR but have not received satisfactory answers. The uncertainty surrounding the new rules has led to confusion and difficulty in planning and executing trade strategies [1].

In conclusion, the Trump administration's new tariffs on transshipped goods have created confusion among importers. While the 40% penalty on these goods is clear, the proposed higher tariffs on components that pass through multiple countries before reaching the US remain uncertain. Trade lawyers and supply chain professionals are seeking clarification from the USTR, but the lack of clear guidance has made it challenging to navigate the new rules. The situation highlights the need for more transparency and consistency in US trade policy.

References:
[1] https://www.tradecomplianceresourcehub.com/2025/08/06/trump-2-0-tariff-tracker/