US Customs and Border Protection (CBP) has released updates to its FAQ section on the application of reciprocal tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The revised guidance clarifies the treatment of in-transit goods and expands considerations for feeder vessel shipments under the reciprocal tariff provisions.
What is the applicability of transit provisions for reciprocal duties under IEEPA?
| Date Goods Loaded onto a Vessel at the Port of Loading and in Transit on the Final Mode of Transport | Date Goods Entered for Consumption or Withdrawn from Warehouse for Consumption into the U.S. | Secondary HTSUS Classification for Reciprocal Tariff | Reciprocal Tariff Duty Rate | Notes |
| Before April 5, 2025 | On and after April 5, 2025, and before May 27, 2025 | 9903.01.28 | Excepted from reciprocal tariffs | |
| On or after April 5, 2025, through April 8, 2025 | Prior to May 27, 2025 | 9903.01.25 | 10% | Applies unless the shipment qualifies for another exception from the reciprocal tariffs |
| April 9, 2025 | Prior to May 27, 2025 | 9903.01.25 | 10% | Only applies to products of China, including products of Hong Kong and Macau, unless the shipment qualifies for another exception from the reciprocal tariffs |
This table provides additional guidance concerning applicability of the in-transit provisions. The in-transit provisions for reciprocal tariffs only apply to the vessel mode of transportation; they do not apply to other modes of transportation such as air, rail, truck, etc. As defined in 19 U.S.C. 1401 and 19 CFR 4.0, vessel includes every description of water craft or other contrivance used or capable of being used as a means of transportation on water, but does not include aircraft. The in-transit provisions do not apply when the shipment begins by vessel and then arrives in the United States using a different final mode of transportation, often referred to as transloading. For information on the use of feeder vessels, please refer to the FAQ below.
For entries transported other than by vessel that were filed using HTS 9903.01.28, filers should take immediate action to correct such entries, as necessary, as soon as possible. For those entries that have been filed with CBP erroneously using HTS 9903.01.28, importers should correct the entry summary by filing a post summary correction.
How are feeder vessel scenarios impacted by the in-transit guidance for reciprocal entries?
ANSWER – SCENARIO A: Prior to the cutoff date for the reciprocal tariff in-transit provision, U.S. bound cargo is loaded onto a vessel destined for the U.S. En route to the U.S., this vessel stops at foreign ports to load/offload other cargo, or refuel, but the U.S. bound cargo remains onboard. This vessel arrives at a U.S. port of entry to unload the U.S. bound cargo and make entry.
The cargo in this scenario does qualify for the exception from reciprocal tariffs pursuant to the in-transit provision because prior to the cutoff date, the U.S. bound cargo was laden onto a vessel destined for the U.S. upon departure from the original port of loading and was never unladen or transferred onto another vessel.
Consequently, this vessel constitutes the “final mode of transit” for the laden goods.
ANSWER – SCENARIO B: Prior to the cutoff date for the reciprocal tariff in-transit provision, U.S. bound cargo is loaded onto a vessel destined for a foreign port prior to shipment to the U.S. At this foreign port, after the cutoff date, the U.S. bound cargo is transferred onto a different vessel that is destined for the U.S. This new vessel then arrives at a U.S. port of entry to unload the U.S. bound cargo and make entry.
The cargo in this scenario does not qualify for the in-transit exception for reciprocal tariffs because the U.S. bound cargo was laden onto a vessel destined for the U.S. after the cutoff date irrespective of when it departed from the original port of lading; it was thus not loaded onto a vessel that was the final mode of transit prior to the cutoff date for the reciprocal tariff in-transit exception.
The Cost of Uncertainty
Although the reciprocal tariff Executive Order was issued with immediate implications, CBP did not publish formal guidance to the trade community until six weeks later, via its updated FAQs on May 15, 2025. This significant delay created confusion and uncertainty, particularly around the Administration’s intent regarding duty applicability based on the mode of transportation and date of export.
From the day of publication, industry stakeholders sought clarification, especially on the ambiguous language around in-transit shipments. In the absence of timely guidance, many importers relied on their interpretations, which led to inadvertent entries under the in-transit provision. In several cases, this resulted in unanticipated duties being assessed, increasing compliance costs and administrative burdens for importers of record.
In exercising Reasonable Care, importers should conduct a thorough audit of affected shipments based on the updated CBP guidance. Corrections can be made to your transaction via the Post Summary Corrections (PSC) process allowing for a revised entry summary to be presented to CBP along with the payment of additional applicable duties.
Protecting American businesses is a priority of the Trump Administration, and we encourage you to share your challenges with your representatives. The rapidly changing tariff environment requires consistent monitoring of updated policy. As tariff negotiations continue and vague directions in Presidential policies are challenged, Mohawk is committed to keeping you updated on these changes. CBP’s updated FAQ serves as a reminder that precision in recordkeeping is essential when navigating the complexities of reciprocal tariff enforcement—and that delayed regulatory clarity can carry real financial consequences. We can help you navigate and decode these tariff changes, reach out today.