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On April 2, Eastern Standard Time, U.S. President Donald Trump signed two executive orders related to "reciprocal tariffs," announcing a 10% "minimum benchmark tariff" on all trading partners and imposing higher tariffs on dozens of countries and regions, including China. Specifically, the U.S. will impose a 34% "reciprocal tariff" on China (including Hong Kong and Macau), effective for goods entering consumption or being withdrawn from warehouses after 12:01 AM on April 9, 2025. However, goods already in transit before that time will be exempted.
According to the executive orders, the U.S. will impose an additional 34% tariff on Chinese goods on top of the existing 20% tariff, resulting in an effective tariff rate of 54%. This is the largest tariff measure announced by the Trump administration since taking office on January 20, 2025, with the stated goal of "preventing other countries from exploiting the U.S."
Notably, the executive orders include a 37-page list of tariff exemptions, detailing nearly 1,000 products, including silicone products (primary forms of polysiloxane, HTS code 39100000). Other exempted products include polysilicon, silicon carbide, pharmaceuticals, semiconductors, wood products, specific critical minerals, and energy products. Additionally, products from Mexico and Canada that comply with the U.S.-Mexico-Canada Agreement (USMCA) are also exempted.
In response, China's Tariff Commission of the State Council issued a notice on April 4, announcing that starting from 12:01 AM on April 10, 2025, all imported goods originating from the U.S. will be subject to an additional 34% tariff on top of the current applicable tariff rates. The newly imposed tariffs will not be eligible for exemptions, but goods shipped before 12:01 AM on April 10, 2025, will not be subject to the new tariffs.
On April 3, the Hong Kong Special Administrative Region (HKSAR) government strongly opposed and expressed dissatisfaction with the U.S. decision to impose tariffs on Hong Kong products. In a commentary titled "Steady Response, Seizing Opportunities" on April 6, Financial Secretary Paul Chan reiterated that Hong Kong will continue to maintain its status as a free port, implementing a free trade policy and ensuring the free and convenient flow of goods, capital, and information. This means that despite the U.S. announcement of tariffs on Hong Kong products, the HKSAR government currently has no plans to impose tariffs on U.S. goods.
The changes in tariff policies have significantly impacted the U.S.-China trade landscape. The exemption of silicone products provides a certain degree of relief for the industry. However, the overall increase in tariff rates will still impose significant pressure on trade, especially for companies relying on imported raw materials and export-oriented businesses.
The future of U.S.-China trade relations remains uncertain. While silicone products have been temporarily exempted, other industries may face higher tariff burdens. Companies need to closely monitor policy changes and adjust their supply chains and market strategies accordingly.
