I check your settings and your checkout and everything is ok.
When I use an overseas address, the overseas shipping method is used, and when I use a US address, the domestic shipping method is used.
See here:
In your message, you talked about having the 35% as an extra on top of the domestic shipping charges.
In that case, you will have to create one overseas shipping method per domestic shipping method and configure each the same expect for the zone restriction (of course!) and the percentage field where you can add the 35% fee for each overseas shipping method.