Late afternoon yesterday, President Trump announced reciprocal tariff action on imports into the United States. The Executive Order (EO) was published soon after, along with a Fact Sheet. Below is a summary and initial analysis on potential tariff costs on U.S. imports of food processing and packaging machinery.
10% baseline tariff on all imports from all trading partners beginning 5 April at 12:01 am (except if loaded prior to the date and in transit).
Tariffs will increase to the individual rates noted by country in Annex I on 9 April at 12:01 am (except if loaded prior to the date and in transit) including on imports from FTA partners. Countries that are not noted will retain the 10% tariff.
Tariffs are in addition to any other duties, fees, taxes (e.g., on top of MFN/non-preferential rates and Section 301 tariffs).
The EO and Fact Sheet indicate that reciprocal tariffs will not be applied on products as noted below.
For imports from Canada and Mexico: the existing US tariffs on non-USMCA compliant goods remain at 25% until the IEEPA-related actions on fentanyl and immigration are terminated. Once those IEEPA actions are terminated, non-USMCA compliant goods will be subject to the reciprocal tariff regime and reduce to 12%. USMCA-compliant goods will remain duty-free.
Steel and aluminum tariffs: 25% Section 232 tariffs remain in place on imports from all countries on steel and aluminum products and certain derivatives.
Energy from Canada and non-USMCA compliant potash from Canada: 10% tariffs remain
Autos and auto parts subject to Section 232 tariffs: 25% tariffs remain
A 37-page list of exceptions related to copper, pharmaceuticals, semiconductors, lumber, energy and certain minerals as found in Annex II. PMMI machinery codes under Chapter 84 are not included in the list of exceptions.
Additional duties will apply only on non-U.S. content so long as 20% of the value of the good is US-originating. “U.S. content” refers to the value of an article attributable to the components produced entirely, or substantially transformed in, the United States. CBP is authorized to require information and documentation, including with the entry filing, to enable CBP to ascertain and verify the value of the U.S. content of the article, as well as to ascertain and verify whether an article is substantially finished in the United States.
Duty-free de minimis exemption allowed until Commerce determines adequate system is in place to process and collect duties. A separate EO eliminates the duty-free de minimis exemption for imports from China beginning 2 May, and applies 30% tariff or $25 per item (increasing to $50 per item on 2 June).
Tariffs may increase or scope of products may be expanded if any trading partner retaliates. (For expanded scope, we interpret this to mean, for instance, that USMCA-compliant products could be hit with tariffs if Canada or Mexico retaliate.)
Tariffs may be reduced or limited in scope if trading partners take action to remedy the tariffs.
There is currently no process to request tariff exclusions.
No specific retaliation announced by U.S. trading partners.
Based on 2024 full year data for the top 10 sourcing markets for PMMI-related machinery, the reciprocal tariffs are estimated to result in additional tariff costs of $1.3 B on $6.1 B of imports, or an average of 21%. Below is a breakdown of the top 10 markets. A full tariff analysis on the total impact is in process.
