Modifying Reciprocal Tariff Rates to Reflect Discussions with the People’s Republic of China

5/12/2025

Executive Orders

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Action Summary

Purpose & Context: Modify reciprocal tariff rates following discussions with the People’s Republic of China to address long‐standing trade deficits and associated national security and economic concerns.
Background Reference: Builds on Executive Order 14257 (declaring a national emergency due to persistent U.S. trade deficits), along with amendments in EO 14259 and EO 14266 aimed at responding to retaliatory trade measures by the PRC.
Tariff Suspension & Adjustment: Suspends 24 percentage points of the additional ad valorem duties on PRC articles for 90 days (effective May 14, 2025) and imposes a flat 10% rate on imports from the PRC (including Hong Kong and Macau), while removing prior modifications from related orders.
HTSUS Modifications: Adjusts specific tariff headings and subdivisions within the Harmonized Tariff Schedule (e.g., revisions to headings 9903.01.25 and 9903.01.63) and temporarily suspends particular duty provisions for 90 days.
De Minimis Tariff Adjustments: Decreases the ad valorem rate on low-value imports from 120% to 54% and maintains a per postal item duty of $100, ensuring consistency with the overall trade policy objectives.
Implementation Measures: Directs the Secretaries of Commerce and Homeland Security, as well as the United States Trade Representative (in consultation with other key agencies), to take all necessary actions including regulatory adjustments to effectuate this order.
General Provisions: Affirms that the order does not impinge on statutory departmental authorities, is subject to available appropriations, and does not create enforceable rights for any party against the United States.

Risks & Considerations

The modification of reciprocal tariff rates with the People’s Republic of China (PRC) could lead to fluctuations in the cost of goods imported from China, impacting the supply chain and operational costs for departments at Vanderbilt University that rely on imported materials or equipment.
There is a potential risk of increased costs for research projects that depend on imported scientific equipment or materials from China, which could affect the budget and timelines of ongoing and future research initiatives.
The suspension and modification of tariffs may lead to temporary instability in trade relations, which could impact partnerships and collaborations with Chinese institutions or researchers.
Vanderbilt University may need to reassess its procurement strategies and explore alternative suppliers to mitigate the impact of fluctuating tariffs on essential goods and services.

Impacted Programs

Vanderbilt’s Research Departments may face challenges in budgeting and planning for projects that require imported materials from China, necessitating adjustments in project scopes or timelines.
The Office of Global Strategy might need to evaluate and potentially renegotiate partnerships with Chinese institutions to ensure continued collaboration amidst changing trade policies.
Supply Chain Management within the university will need to closely monitor tariff changes and adjust procurement strategies to minimize cost increases and ensure the availability of necessary resources.

Financial Impact

The imposition of a 10 percent ad valorem duty on imports from China could lead to increased costs for departments that rely on Chinese goods, potentially affecting their operational budgets.
Research funding may need to be reallocated to cover additional costs associated with tariffs, which could impact the scope and scale of research projects.
Vanderbilt University may need to explore alternative funding sources or cost-saving measures to offset the financial impact of increased tariffs on imported goods.

Relevance Score: 3 (The executive order presents moderate risks involving compliance and potential financial impacts on university operations.)

Key Actions

Vanderbilt’s Office of Federal Relations should monitor the changes in tariff rates and trade policies with China, as these could impact research funding and international collaborations. Understanding these changes will help the university navigate potential cost increases for imported research materials and equipment.
The Department of Economics should conduct an analysis of the potential economic impacts of the modified tariff rates on the U.S. economy and share insights with the university community. This research can inform strategic decisions related to international partnerships and economic policy advocacy.
Vanderbilt’s International Student and Scholar Services should assess how changes in trade relations with China might affect international students and scholars, particularly those from China. Providing support and resources to this community will be essential in maintaining a welcoming and inclusive environment.
The Vanderbilt Center for International Business should explore opportunities for new partnerships and collaborations with Chinese institutions, leveraging the ongoing discussions between the U.S. and China to enhance academic and research exchanges.

Opportunities

The executive order presents an opportunity for Vanderbilt’s Owen Graduate School of Management to develop case studies and courses on international trade policy and its implications for business strategy. This can enhance the school’s curriculum and attract students interested in global business dynamics.
Vanderbilt can capitalize on the evolving trade landscape by hosting conferences and workshops on U.S.-China trade relations, positioning itself as a leader in international economic policy discussions and fostering dialogue among academics, policymakers, and industry leaders.
The emphasis on addressing non-reciprocal trade arrangements offers an opportunity for Vanderbilt’s Law School to engage in policy analysis and advocacy. By providing legal expertise and recommendations, the school can influence how trade policies are shaped and implemented.

Relevance Score: 3 (Some adjustments are needed to processes or procedures due to potential impacts on research funding and international collaborations.)

Average Relevance Score: 3.2

Timeline for Implementation

May 14, 2025 at 12:01 a.m. EDT: All tariff modifications and suspension measures become effective for goods entered for consumption.
90-Day Suspension Period: The additional ad valorem duties on PRC-imported articles (including those from Hong Kong and Macau) are suspended for an initial period of 90 days starting on May 14, 2025.

Relevance Score: 2

Impacted Government Organizations

Department of Commerce: Tasked with implementing and effecting the modifications to the Harmonized Tariff Schedule of the United States (HTSUS) and publishing any necessary regulatory updates.
Department of Homeland Security: Designated to help enforce the order through customs and border security measures for goods entering the United States.
United States Trade Representative (USTR): Charged with overseeing trade-related aspects of the order, particularly regarding adjusted tariffs on imports from the People’s Republic of China.
Department of State: Consulted for matters related to international discussions and trade negotiations with China.
Department of the Treasury: Involved by consultation to support economic security and enforce financial implications of tariff adjustments.
Office of the Assistant to the President for National Security Affairs: Consulted to ensure that national security concerns are addressed in the trade actions.
Office of the Assistant to the President for Economic Policy: Consulted to ensure that economic policy considerations are integrated into tariff modifications.
Senior Counselor to the President for Trade and Manufacturing: Provides expert advice on trade and manufacturing concerns linked to the order.
United States International Trade Commission: Represented by its Chair to support the trade analysis and recommendations appropriate for adjusting tariffs.

Relevance Score: 3 (A moderate number of Federal Agencies and related bodies are directly impacted by the order.)

Responsible Officials

Secretary of Commerce – Charged with implementing tariff modifications and customs regulation changes outlined in the order.
Secretary of Homeland Security – Responsible for adjusting security and customs operations in line with the modified tariff measures.
United States Trade Representative – Tasked with coordinating trade policy actions and ensuring the modifications to the Harmonized Tariff Schedule are applied effectively.
In consultation with:
- Secretary of State
- Secretary of the Treasury
- Assistant to the President for National Security Affairs
- Assistant to the President for Economic Policy
- Senior Counselor to the President for Trade and Manufacturing
- Chair of the United States International Trade Commission

Relevance Score: 5 (Directives affect Cabinet-level and White House officials central to national economic and security policies.)