Suspending Duty-Free De Minimis Treatment for All Countries

7/30/2025

Executive Orders

View Original

Action Summary

Authority and Background: Issued under Presidential authority (IEEPA, National Emergencies Act, Trade Act, etc.) with reference to previous Executive Orders addressing emergencies at the northern and southern borders, the synthetic opioid supply chain from the PRC/Hong Kong, and large U.S. goods trade deficits.
Emergency Declarations:
- Northern Border: Addressing illicit drug flows and related safety threats (Executive Order 14193, amended by EO 14226).
- Southern Border: Responding to similar threats from Mexico (Executive Order 14194, amended by EO 14227).
- China/Hong Kong: Targeting the synthetic opioid supply chain linked to the PRC (Executive Order 14195, amended by EOs 14200, 14228, and 14256).
- Global Basis: Responding to conditions underlying persistent U.S. trade deficits (Executive Order 14257).
Suspension of Duty-Free De Minimis Treatment:
- The duty-free de minimis exemption under 19 U.S.C. 1321(a)(2)(C) is suspended for shipments (except international postal network shipments) to prevent evasion of tariffs and ensure the effectiveness of emergency tariffs.
- Specific suspensions apply independently for certain Canadian, Mexican, and Chinese/Hong Kong goods, as well as a global suspension for non-postal shipments.
International Postal Shipments:
- Maintained duty-free for postal shipments until a new entry process is established by CBP.
- Establishment of two duty assessment methods:
  - An ad valorem duty based on the effective IEEPA tariff rate.
  - A specific duty based on tariff rate thresholds ($80, $160, or $200 per item) available for a 6‑month period.
- Requirement to declare the country of origin for all postal shipments.
Implementation and Enforcement:
- Effective for goods entered or withdrawn for consumption beginning August 29, 2025.
- CBP and the Secretary of Homeland Security authorized to implement necessary regulations, modify tariff schedules, and ensure bond requirements for compliance.
Definitions and Severability:
- Defines “effective IEEPA tariff rate” as the stacked tariff rate addressing each declared emergency.
- Ensures that if any provision is invalidated, the suspension of duty-free treatment remains in effect for the respective emergencies.
General Provisions:
- Affirms that the order does not impair authority of executive agencies or create enforceable rights against the United States.
- Costs for publication borne by the Department of Homeland Security.

Risks & Considerations

The suspension of duty-free de minimis treatment for imports could lead to increased costs for goods entering the United States, affecting supply chains and potentially increasing operational costs for Vanderbilt University if it relies on imported goods for research or educational purposes.
This executive order may impact international collaborations and partnerships, particularly with institutions in Canada, Mexico, China, and Hong Kong, due to increased tariffs and trade barriers. This could affect joint research projects and student exchange programs.
The increased duties and tariffs could lead to a rise in the cost of materials and equipment necessary for research, potentially impacting the budget and financial planning of various departments within the university.
There is a risk of disruption in the availability of certain goods and services, which could affect the university’s operations, particularly in areas that depend on timely and cost-effective international shipping.
Vanderbilt University may need to reassess its procurement strategies and explore alternative suppliers or domestic options to mitigate the impact of increased import duties.

Impacted Programs

Research Departments that rely on imported materials and equipment may face budgetary constraints and delays due to increased costs and potential supply chain disruptions.
The Office of International Affairs may need to navigate new challenges in maintaining and establishing international partnerships, particularly with institutions in affected countries.
Financial Planning and Procurement Offices will need to adjust their strategies to account for the increased costs associated with imports and explore alternative sourcing options.
The Global Education Office may need to consider the implications of these trade policies on student exchange programs and international collaborations.

Financial Impact

The increased tariffs and duties could lead to higher operational costs for the university, particularly in areas that depend on imported goods and services.
Budget adjustments may be necessary to accommodate the increased costs of research materials and equipment, potentially affecting funding allocations for various programs and initiatives.
There may be a need to explore additional funding sources or grants to offset the financial impact of these trade policies on the university’s operations.
Vanderbilt University might experience changes in its financial planning and procurement strategies to mitigate the impact of increased import duties and tariffs.

Relevance Score: 4 (The order presents a need for potential major changes or transformations of programs.)

Key Actions

Vanderbilt’s Office of Federal Relations should closely monitor the implementation of the suspension of duty-free de minimis treatment, as it may impact the cost of imported goods and materials used in research and educational programs. Understanding these changes will be crucial for budget planning and procurement strategies.
Vanderbilt’s Supply Chain Management should evaluate the potential impact of increased duties on international shipments, particularly those from Canada, Mexico, and China. This evaluation will help in adjusting procurement processes and exploring alternative suppliers to mitigate cost increases.
Vanderbilt’s Research Departments should assess the potential impact on research collaborations and partnerships with international institutions, especially those in countries affected by the suspension of duty-free de minimis treatment. Identifying alternative collaboration models or funding sources may be necessary to continue international research efforts.
Vanderbilt’s Financial Planning Office should consider the broader economic implications of the executive order, including potential impacts on tuition, fees, and financial aid, as increased costs may affect the university’s financial health and student affordability.

Opportunities

The executive order presents an opportunity for Vanderbilt’s Policy Research Institute to conduct studies on the economic and trade impacts of the suspension of duty-free de minimis treatment. This research can provide valuable insights to policymakers and enhance Vanderbilt’s reputation as a thought leader in economic policy analysis.
Vanderbilt’s International Business Programs can leverage the changes in trade policies to develop new curriculum and case studies, providing students with real-world examples of international trade dynamics and policy impacts.

Relevance Score: 4 (The order necessitates major process changes due to its impact on international trade and procurement strategies.)

Average Relevance Score: 3.8

Timeline for Implementation

Effective for goods entered for consumption on or withdrawn from warehouse for consumption on or after 12:01 a.m. EDT on August 29, 2025.

Relevance Score: 4

Impacted Government Organizations

U.S. Customs and Border Protection (CBP): Charged with processing entries, enforcing new duty collection procedures, and managing bonds for import shipments.
Department of Homeland Security (DHS): Directed to implement and effectuate the order using its authority, including rulemaking and regulatory amendments.
Department of Commerce: The Secretary of Commerce is responsible for notifying the President when adequate systems are in place to process and collect duties, affecting policy adjustments.
United States International Trade Commission (ITC): To be consulted by the Secretary of Homeland Security regarding potential modifications to the Harmonized Tariff Schedule of the United States.
Department of State: Consulted as part of the interagency coordination to implement the order’s trade measures.
Department of the Treasury: Involved in ensuring compliance with duty remittances and financial oversight under the order.
Department of Justice (Attorney General): Consulted for legal enforcement and ensuring the suspension of duty-free de minimis treatment is implemented consistently with law.
United States Trade Representative (USTR): Engaged in discussions regarding trade practices and the broader implications on U.S. goods trade deficits.
Postmaster General: Consulted regarding the procedures and collection of duties on international postal shipments.

Relevance Score: 3 (A moderate number of Federal Agencies are impacted by the executive order.)

Responsible Officials

Secretary of Homeland Security – Directed and authorized to take all necessary actions to implement and effectuate the order, including amending regulations and coordinating with other agencies.
U.S. Customs and Border Protection (CBP) – Empowered to enforce entry requirements, require importation bonds, and implement the procedures outlined in the order.
Secretary of Commerce – Tasked with notifying the President regarding the readiness of systems to process and collect duties for shipments previously eligible for duty-free de minimis treatment.

Relevance Score: 4 (Directives affect key agency heads responsible for implementing significant trade and customs policies.)