Trump's tax and spending bill would raise some tariffs as well

WASHINGTON: The massive tax and spending bill that has passed the House of Representatives would also further another priority of President Donald Trump: higher tariffs.

AI Brief

The bill ends tariff exemptions for cheap imports and raises ship entry fees by 125%.
It limits tax refunds on re-exported tobacco and caps claims on similar products.
Sugar quotas will be adjusted to allow more low-tariff imports if some countries underdeliver.

The bill would codify into law several key elements of the executive actions Trump has taken on tariffs, making it more difficult for a future administration to unwind them.

Here is a breakdown of the tariff-related elements in the package, which also must pass the Senate before Trump can sign it into law.

CLOSING LOOPHOLE FOR CHEAP IMPORTS

Currently, shipments entering the United States that are worth less than $800 are generally exempt from tariffs. The bill would end that exemption for commercial shipments starting on July 1, 2027.

Trump ended this "de minimus" exemption in February and since has used it as a bargaining chip in trade talks with China and other countries. His administration agreed earlier this month to lower tariffs on such shipments from China from 145% to 30%.

This legislation would end that separate treatment for low-value shipments, subjecting them to the same duties and inspection requirements as more expensive imports.

INCREASE VESSEL TAXES

The bill would increase entry fees for ships arriving at U.S. ports.

Those fees are charged by the ton, and they vary depending on where it is coming from. The bill would increase those fees "in general" by 125%, according to an official summary.

LIMIT TOBACCO TAX REFUNDS

The bill would also limit some tax and tariff refunds for tobacco products.

Currently, companies can get a refund on tariffs, taxes or fees they pay for products that are imported to the United States and then shipped on to another country. Companies can also claim this "drawback" for similar goods, even if they are not identical to the products that had been imported.

The legislation would cap that refund for similar products so it would not exceed the taxes and tariffs paid.

CHANGE SUGAR QUOTAS

The legislation aims to allow more sugar to enter the United States at lower tariff rates.

Currently, the United States sets country-specific quotas that allow a certain amount of sugar to be imported before higher tariff rates kick in. If a country does not meet its quota, U.S. authorities would allocate that amount to another country that has already hit its threshold.