Overview
This article is current at the time of posting.
On September 5, 2025, President Trump issued an Executive Order (the Order) to modify the scope of "reciprocal tariffs" previously imposed under the International Emergency Economic Powers Act (IEEPA) and to identify those products that might be subject to no reciprocal tariffs whatsoever in the event a trade agreement is reached. Background on the reciprocal tariffs can be found in our previous blog post.
While the Order signals a willingness to accommodate requests for tariff relief, particularly where domestic alternatives to these imports do not exist, the scope of exclusions remains narrow and targeted, primarily benefiting sectors tied to manufacturing and national security.
Modification of Scope of Reciprocal Tariffs
The Order modifies the tariff regime established under Executive Order 14257 (the Reciprocal Tariff Executive Order) to exclude some raw materials and inputs critical to US manufacturing, energy, and national security. Specifically, the Order modifies Annex II of the Reciprocal Tariff Executive Order, which lists the Harmonized Tariff Schedule (HTSUS) line items that are exempt from reciprocal tariffs.
The Order adds 39 new HTSUS codes to Annex II, including minerals and ores such as graphite, tin, thorium, unroasted molybdenum concentrates, nickel, zinc, ferronickel, as well as certain chemicals, gold and other precious metals, some types of pulp, and light emitting diodes. The Order underscores that only products "properly classified" under the listed HTSUS provisions qualify for exclusion, further underscoring the need for importers to take care with their entry procedures.
Additionally, the Order removes eight HTSUS product lines from Annex II, meaning these products will now be subject to either a country-specific reciprocal tariff or a 10% baseline tariff. The items include certain chemicals, plastics, and resins used in industrial processes.
Imports for Which the Reciprocal Tariff Rate Could Be Eliminated Through Negotiation
The Order also identifies goods in Annex III which the US might be willing to reduce the reciprocal tariff rate to zero for countries that enter into a trade agreement with the United States. This list consists of products that are not available in the US or not available in sufficient quantities. The Order notes that the imports that might receive a reciprocal tariff rate of zero percent may be different depending on the trading partner.
Implementation of Trade and Security Agreements with Partners
Separate from these tariff rate modifications, the Order provides structure for the development of trade agreements with US trading partners, which have been developing on a purely ad hoc basis since the imposition of the reciprocal tariffs. Specifically, the Order delegates to various officials the ability to employ all powers granted to the President, including those granted by IEEPA and Section 232, to implement any trade and security agreements the US enters into with its trading partners. The Order also tasks various government officials with advising the president on the need for additional action that will more effectively deal with the emergency declared in the Reciprocal Tariff Executive Order.
Additionally, the Order distinguishes between "Framework Agreements" and "Final Agreements" on trade, with Framework Agreements being the precursor to Final Agreements. The Order notes that "except in rare circumstances," the US will not narrow reciprocal tariffs or modify any tariffs imposed under Section 232 of the Trade Expansion Act of 1962 absent a Final Agreement.
The Order identifies the Framework Agreement with the EU as an example of a rare circumstance in which implementation of tariff modifications contemplated in the Framework Agreement was appropriate prior to conclusion of a Final Agreement.
For more information on these actions, assistance with compliance, or questions on how the tariffs may impact your business, please contact a member of Steptoe's Trade Policy practice.
