The United States has intensified its trade conflict with China by implementing a new wave of tariffs that took effect on March 4, 2025. These include an additional 10% duty on all Chinese goods under the International Emergency Economic Powers Act (IEEPA), applied on top of existing tariffs. In addition, China has lost its duty-free treatment under Section 321 de minimis entry, which previously allowed small shipments under $800 to enter the U.S. tariff-free, and businesses can no longer claim duty drawbacks for tariffs paid on Chinese imports. These measures build upon previous tariff hikes and have been justified by the administration as necessary to address national security concerns, illegal migration, and the fentanyl crisis.

Scope and Impact of the New Tariffs

This latest round of tariffs marks a fundamental shift in US trade policy, reinforcing a protectionist stance that extends beyond traditional economic disputes and delves into broader geopolitical considerations. The measures implemented on March 4, 2025, build upon the tariff increases from February 2025, which imposed an additional 10% duty on Chinese imports. The latest escalation raises the tariff rate to 20%, further increasing pressure on Chinese trade practices. Unlike previous tariffs that were often levied in response to concerns over trade deficits or intellectual property theft, these latest measures are far-reaching and impose restrictions that curb the ability of businesses to absorb or offset costs through mechanisms like duty drawbacks or tariff exclusions. Essentially, the previous loopholes are now closing.