Reciprocal tariffs explained: Impact on your business

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President Donald J. Trump imposed “reciprocal tariffs” on a host of countries on 5 April 2025, following his 2 April “Liberation Day” announcement. Since then, he has adjusted many reciprocal tariffs, increasing rates for some countries and lowering them for others.

The president established the reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA). On 20 February 2026, the Supreme Court of the United States ruled that IEEPA does not authorize the president to impose tariffs.

During a White House press briefing following the decision, President Trump said he would replace the IEEPA tariffs with a 10% global tariff under the authority of Section 122. He later issued a proclamation establishing the 10% tariff effective 24 February 2026, for a period of 150 days.

On 21 February, the president said via Truth Social that he would increase the Section 122 tariff to 15%. He has yet to make that official.

Key takeaways

President Trump established sweeping reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA). On 20 February 2026, the U.S. Supreme Court ruled that IEEPA does not authorize the president to impose tariffs.
Following the Supreme Court decision, President Trump established a 10% global tariff under the authority of Section 122, effective 24 February 2026. He also said his administration would initiate Section 301 investigations.
Noting that the Supreme Court did not mention refunds, Trump said he would fight IEEPA tariff refunds in court.

What is the meaning of reciprocal tariff?

If a tariff is a tax on goods imported from other countries, what is a reciprocal tariff?

Reciprocal means “consisting of or functioning as a return in kind” or “mutually corresponding.” So, a reciprocal tariff is a tariff on a country that matches the tariff imposed by that country. Should Country A impose a 14% tariff on Country B, Country B’s reciprocal tariff for Country A would be 14% or the equivalent.

Reciprocal tariffs are designed to combat unfair trade practices and fix trade imbalances.

What are US reciprocal tariffs?

In February 2025, President Trump announced the coming of a “Fair and Reciprocal Plan” to “counter non-reciprocal trading arrangements with trading partners by determining the equivalent of a reciprocal tariff with respect to each foreign trading partner.”

In addition to existing tariffs on U.S. goods, the plan considered such factors as value-added tax (VAT), nontariff barriers, and other practices judged to impose “any unfair limitation on market access or any structural impediment to fair competition with the market economy of the United States.”

The White House unveiled its reciprocal tariff plan on 2 April 2025, during a “Liberation Day” Rose Garden event. The plan established:

An additional 10% ad valorem rate of duty on all imports from all trading partners starting 5 April 2025
Higher rates of duty for trading partners listed in Annex 1, starting 9 April 2025

The baseline 10% tariff on all countries took effect as planned on 5 April. However, on 9 April, President Trump suspended the higher country-specific reciprocal tariffs for all nations except China, Canada, and Mexico.

The 90-day pause was to end 9 July 2025, but on 7 July, President Trump delayed implementation of the country-specific reciprocal tariffs until 1 August. He also started sending letters to his counterparts in other countries; the Trump tariff letters announced the rate of duty that will take effect starting 1 August but left the door open to adjusting the tariff. (See a sample tariff letter.)

On 31 July, the White House published a list of modified reciprocal tariffs. The new duties take effect seven days after the date of the order, at 12:01 a.m. ET, instead of 1 August.

On 5 September 2025, President Trump issued an executive order modifying the scope of reciprocal tariffs. The order exempts 39 HTS codes from the reciprocal tariffs and subjects another eight HTS codes to those tariffs. It also provides a list of HTS codes for which the president may be willing to provide a 0% reciprocal tariff rate.

Which countries were affected by US reciprocal tariffs?

President Trump imposed a 10% tariff on virtually all countries effective 5 April 2025. Canada, Mexico, and China were the only exceptions; different tariff policies apply to them. Read more about the Canada tariffs and China tariffs.

Most countries later became subject to a higher rate of duty.

The tariffs announced in April and subsequent adjusted tariffs are listed below. If column one is blank, it’s because that country was not listed on the April version of Annex 1.

On 20 February 2026, the Supreme Court ruled that IEEPA does not grant the president the authority to establish tariffs. Per a 20 February 2026 executive order, the ad valorem duties imposed pursuant to IEEPA that are listed below, “shall no longer be in effect and, as soon as practicable, shall no longer be collected.”

Another proclamation invoked Section 122 to impose a temporary import surcharge of 10% “on articles imported into the United States, effective 24 February 2026.” This 10% tariff will be in effect for 150 days.

The tariffs listed below are no longer in effect but are provided for historical purposes.

Country	Reciprocal tariff announced 2 April 2025	IEEPA tariff rate as of 23 February 2026	Section 122 tariff effective 24 February 2026
Afghanistan		15%	10%
Algeria	30%	30%	10%
Angola	32%	15%	10%
Australia	10%	10%	10%
Bangladesh	37%	20%	10%
Bolivia		15%	10%
Bosnia and Herzegovina	35%	30%	10%
Botswana	37%	15%	10%
Brazil	10%	10% (plus 40% additional duty)	10%
Brunei	24%	25%	10%
Cambodia	49%	19%	10%
Cameroon	11%	15%	10%
Canada		35%; 10% for energy and potash; 0% for USMCA-compliant goods (Read our blog for updates and details on Canada tariffs)	10%
Chad	13%	15%	10%
China		10%+ (plus 10% “fentanyl” tariff; read our blog for updates and details on China tariffs)	10%
Costa Rica		15%	10%
Côte d’Ivoire	21%	15%	10%
Democratic Republic of the Congo	11%	15%	10%
Ecuador		15%	10%
Equatorial Guinea	13%	15%	10%
European Union	20%	15%	10%
Falkland Islands	41%	10%	10%
Fiji	32%	15%	10%
Ghana		15%	10%
Guyana	38%	15%	10%
Iceland		15%	10%
India	26%	25%	10%
Indonesia	32%	19%	10%
Iraq	39%	35%	10%
Israel	17%	15%	10%
Japan	24%	15%	10%
Jordan	20%	15%	10%
Kazakhstan	27%	25%	10%
Laos	48%	40%	10%
Lesotho	50%	15%	10%
Libya	31%	30%	10%
Liechtenstein	37%	15%	10%
Madagascar	47%	15%	10%
Malawi	17%	15%	10%
Malaysia	24%	19%	10%
Mauritius	40%	15%	10%
Mexico		25% for most goods; 10% for energy and potash; 0% for USMCA-compliant goods	10%
Moldova	31%	25%	10%
Mozambique	16%	15%	10%
Myanmar (Burma)	44%	40%	10%
Namibia	21%	15%	10%
Nauru	30%	15%	10%
New Zealand		15%	10%
Nicaragua	18%	18%	10%
Nigeria	14%	15%	10%
North Macedonia	33%	15%	10%
Norway	15%	15%	10%
Pakistan	29%	19%	10%
Papua New Guinea		15%	10%
Philippines	17%	19%	10%
Serbia	37%	35%	10%
South Africa	30%	30%	10%
South Korea	25%	15%	10%
Sri Lanka	44%	20%	10%
Switzerland and Liechtenstein	31%	15%	10%
Syria	41%	41%	10%
Taiwan	32%	20%	10%
Thailand	36%	19%	10%
Trinidad and Tobago		15%	10%
Tunisia	28%	25%	10%
Turkey		15%	10%
Uganda		15%	10%
United Kingdom		10%	10%
Vanuatu	22%	15%	10%
Venezuela	15%	15%	10%
Vietnam	46%	20%	10%
Zambia	17%	15%
Zimbabwe	18%	15%

Tariff letters address transshipping

Transshipping is the practice of sending goods from one country to another country before shipping them to the final port of destination, or transferring cargo from one vessel to another while en route. It’s a way to sidestep tariffs imposed on the country of origin.

The Trump tariff letters specify that “goods transshipped to evade a higher tariff will be subject to that higher tariff.”

Ordinarily, this would mean the higher tariff on the country of origin would apply, rather than the lower tariff on the country the goods passed through. But that may not be what President Trump means. “Vietnam will pay the United States a 20% tariff on any and all goods sent into our territory,” he wrote on Truth Social on 2 July, “and a 40% tariff on any transshipping.”

The “40% on transshipping,” Commerce Secretary Howard Lutnick later explained on X, means “if another country sells their content through products exported by Vietnam to us, they’ll get hit with a 40% tariff.”

So, there are questions about what this transshipping tariff means and how it will be enforced.

What reciprocal tariffs mean for your business

Tariffs have been in flux since 1 February 2025, when President Trump revealed his intention to impose new tariffs on China, Canada, and Mexico. New tariffs for many countries and specific products have been announced, implemented, paused, increased, and decreased, often within a matter of hours. We tracked tariff changes in this blog post and are tracking 2026 tariff changes here.

This is a challenging environment for businesses, both for planning and compliance, especially given the 20 February 2026, Supreme Court decision. When we don’t know what trade policies tomorrow will bring, it’s difficult to forecast future costs and revenue or rework supply chains.

How Avalara helps with tariff compliance

Fortunately, technology can help businesses reduce the burden of international compliance. Avalara Cross-Border automates tariff code classification, which is key to determining tariff rates, and delivers real-time calculation of customs duties and import taxes. We stay on top of regulatory changes worldwide, so our customers can focus on other aspects of their business.

To learn how Avalara can help you comply with international tax requirements, contact us today.

Reciprocal tariff FAQ

Reciprocal tariffs are tit for tat: They’re tariffs on imports that match the tariffs imposed by the country of export. Countries impose reciprocal tariffs to improve trade barriers and imbalances.

After the Supreme Court issued its IEEPA decision on 20 February 2026, President Trump pointed out that the court did not address refunds. “We’ll end up being in court for the next five years,” he said during a press briefing.

A reciprocal tariff matches another country’s tariff to balance trade between the two countries. A retaliatory tariff is a tax on imports from a country to punish that country for certain actions, such as setting high tariffs of its own or dumping.

In trade, dumping means exporting goods to another country at a price lower than the actual cost of production or the domestic price in the country of import.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.