New U.S. Tariffs in 2025: What Businesses Need to Know About Costs & Compliance

As an accounting professional, I'm seeing clients scramble to adapt to these changes that affect over $18 billion in annual imports. Here's what you need to understand about the new trade landscape.

Breaking Down the 2025 Tariff Changes

The White House announced four key adjustments taking effect August 1, 2025:

1. Steel & Aluminum Tariffs Jump to 25% (from 7.5%)

2. Chinese EVs Face 100% Duties (up from 25%)

3. Semiconductor Tariffs Triple to 50%

4. New 10% Levy on Mexican Auto Imports

Financial Impacts You Can't Ignore

Direct Cost Increases

• Auto dealers sourcing Mexican vehicles face immediate 10% price hikes

• Construction firms report steel costs rising 18% since the announcement

Hidden Accounting Consequences

1. Inventory Valuation Challenges
   Tariffs paid at import must be capitalized into inventory costs under IRS Code Section 263A, potentially creating:

• Higher COGS when sold

• Phantom profits if prices can't be raised

2. Cash Flow Crunches
   Unlike sales taxes, tariffs are due immediately upon customs clearance. Many businesses don't realize they need to:

• Pre-fund customs bonds

• Adjust quarterly tax payments for higher expenses

3 Strategic Responses We're Recommending

1. Supply Chain Audits

• Identifying non-tariffed alternative suppliers

• Reclassifying Harmonized Tariff Schedule (HTS) Codes 

• Qualifying for Section 321 de minimis exceptions

2. Duty Recovery Opportunities

• Claim retroactive refunds for misclassified imports

• Apply for exclusions (new process opens October 2025)

• Use Foreign Trade Zones to defer payments

3. Tax Planning Adjustments

• Accelerating equipment purchases before tariff-driven price hikes

• Restructuring entities to optimize customs valuation

• Documenting tariff impacts for potential casualty loss claims

Compliance Pitfalls to Avoid

The CBP has announced enhanced enforcement focusing on:

• Origin Fraud (new penalties up to $500K per violation)

• Valuation Manipulation (strict new transfer pricing reviews)

• EEI Filing Errors (required for all shipments over $2,500)

Case Example: A Chicago distributor faced $287K in penalties after incorrectly declaring goods as "assembled in Thailand" when 51% of components came from China.

Next Steps for Business Leaders

1. Conduct a Tariff Impact Assessment
   Map all imported items against the new schedules

2. Review Customs Compliance
   Ensure proper:

• HTS classifications

• Country of origin documentation

• Customs bond coverage

These changes require immediate attention - the businesses that adapt fastest will maintain their competitive edge.