U.S. modifies reciprocal tariffs, sets procedures to implement trade and security agreements
Date of publication: September 10, 2025
On September 5, 2025, the White House issued a new Executive Order (EO) modifying the scope of the United States’ reciprocal tariffs regime and establishing procedures to implement current and future trade and security agreements with key partners. Building on the national emergency declared in Executive Order 14257 (April 2, 2025) regarding large and persistent U.S. goods trade deficits, the order adjusts tariff coverage globally, outlines how “framework agreements” and “final agreements” will be operationalized, and updates the Harmonized Tariff Schedule of the United States (HTSUS).
Background
The September 5th order represents the latest evolution in what has become known as "Liberation Day" tariffs. The original policy imposed a 10% baseline tariff on imports from nearly all countries beginning April 5, with additional country-specific tariff rates scheduled to begin April 9th. Since April, the tariff regime has undergone multiple modifications and have been postponed on numerous occasions with most coming into force finally on August 7th.
Key provisions of the new executive order
Updates to product exemption list
The new EO modifies Annex II to Executive Order 14257, updating the list of goods exempt from reciprocal tariffs. The changes include
the addition of numerous new product categories
to the exemption list. The newly exempted products span across several major HTSUS chapters, with chemicals and chemical products being particularly prominent in Section VI of the Harmonized System, which covers "Products of the Chemical or Allied Industries" including Chapters 28 (inorganic chemicals) and 29 (organic chemicals).These exemptions suggest the administration is prioritizing access to raw materials, industrial inputs, and specialized components that may be critical for U.S. manufacturing while maintaining tariff pressure on finished consumer goods.
HTSUS Code | Chapter | General Product Category |
|---|---|---|
2504.10.10 | 25 | Salt; Sulphur; Earths & Stone; Plastering Materials; Lime & Cement |
2604.00.00 / 2609.00.00 2612.20.00 / 2613.90.00 | 26 | Ores, Slag and Ash |
2825.40.00 / 2833.24.00 | 28 | Inorganic Chemicals; Compounds of Precious Metals |
2903.51.10 / 2924.29.01 2924.29.03 / 2924.29.23 2924.29.26 / 2924.29.28 2924.29.33 / 2924.29.57 2924.29.80 / 2926.90.50 2933.29.05 / 2933.29.60 | 29 | Organic Chemicals |
4703.11.00 / 4703.21.00 4703.29.00 | 47 | Pulp of Wood or Other Fibrous Cellulosic Material |
7108.11.00 / 7108.12.50 7108.13.10 / 7108.13.55 7108.13.70 / 7108.20.00 7115.90.05 / 7115.90.30 | 71 | Natural or Cultured Pearls, Precious Stones, Precious Metals |
7202.60.00 | 72 | Iron and Steel |
7501.10.00 / 7502.10.00 / 7502.20.00 / 7503.00.00 / 7504.00.00 | 75 | Nickel and Articles Thereof |
7903.90.30 | 79 | Zinc and Articles Thereof |
8505.11.0070 | 85 | Electrical Machinery and Equipment |
8541.41.00 | 85 | Electrical Machinery and Equipment |
Additionally, a number of product categories are being
removed from the exemption list
, meaning they will now be subject to reciprocal tariffs.HTSUS Code | Chapter | General Product Category |
|---|---|---|
2818.30.00 | 28 | Inorganic Chemicals; Compounds of Precious Metals |
3824.99.93 | 38 | Miscellaneous Chemical Products |
3907.29.00 | 39 | Plastics and Articles Thereof |
3907.30.00 | 39 | Plastics and Articles Thereof |
3907.61.00 | 39 | Plastics and Articles Thereof |
3907.69.00 | 39 | Plastics and Articles Thereof |
3907.99.50 | 39 | Plastics and Articles Thereof |
3910.00.00 | 39 | Plastics and Articles Thereof |
The removal of these exemptions primarily affects chemical manufacturers importing specialized inorganic compounds, the plastics industry — significantly impacted with six of the removed codes relating to various plastic resins and polymers, and manufacturing sectors that rely on these plastic materials as inputs for production.
This shift suggests the administration is prioritizing protection of domestic chemical and plastics manufacturing while maintaining exemptions for raw materials and critical inputs that cannot be easily sourced domestically (as seen in the new exemptions added).
Companies in affected industries should prepare for increased input costs and may need to evaluate domestic sourcing alternatives or factor the new tariff costs into their pricing strategies.
The White House published an updated Annex II reflecting the above changes. A copy may be found here.
Framework for trade agreements
The EO establishes formal procedures for implementing two types of agreements:
- Framework Agreements:These are preliminary agreements that signal a trading partner's willingness to negotiate. The order allows for limited tariff modifications during these preliminary stages, but generally maintains that "except in rare circumstances, I (Trump) will refrain from narrowing the scope of the reciprocal tariff or any relevant section 232 tariff before the conclusion of a final trade and security agreement."
- Final Agreements:These comprehensive agreements can include more substantial tariff modifications, including potential zero-percent reciprocal tariff rates for specific products.
The EU framework agreement
The order specifically references the recently announced "Framework on an Agreement on Reciprocal, Fair, and Balanced Trade" between the United States and the European Union. Under this framework:
- The United States commits to apply the higher of either the U.S. Most Favored Nation (MFN) tariff rate or a tariff rate of 15 percent on originating goods of the European Union
- The European Union intends to eliminate tariffs on all U.S. industrial goods and to provide preferential market access for a wide range of U.S. seafood and agricultural goods.
- The European Union intends to procure U.S. liquified natural gas, oil, and nuclear energy products with an expected offtake valued at $750 billion through 2028.
- A more detailed overview of the agreement can be found in Regulatory Insights here.
Potential zero-tariff categories
The order outlines specific product categories that may receive zero-percent reciprocal tariff rates in final agreements:
- Products that cannot be grown, mined, or naturally produced in the United States in sufficient quantities.
- Certain agricultural products
- Aircraft and aircraft parts
- Non-patented articles for pharmaceutical applications
Implementation authority
The order delegates broad implementation authority to the Secretary of Commerce and the United States Trade Representative, who are directed to:
- Monitor conditions underlying the declared national emergency.
- Determine when framework or final agreement conditions have been met.
- Take the necessary actions to implement agreements.
- Modify the Harmonized Tariff Schedule as needed.
Business implications
Companies should prepare for continued volatility in tariff structures as the administration implements this framework. The ability to modify tariffs based on ongoing negotiations means businesses may face changing cost structures with relatively short notice.
The order creates incentives for trading partners to negotiate comprehensive agreements with the United States. As countries have made agreements with the U.S. to avoid higher tariffs, a common element has been economic investments into the U.S. As examples, Japan agreed to a $550 billion investment in the U.S., while South Korea agreed to $100 billion.
The updated exemption lists will have varying impacts across industries. Companies in sectors where exemptions were removed should expect increased costs, while those in newly exempted categories may see relief from tariff pressures.
Finally, it should be noted that there are numerous court cases in process now that challenge President Trump's use of the IEEPA to impose tariffs on imports, arguing that these tariffs are unlawful and unconstitutional, claiming the IEEPA does not authorize the President to impose tariffs and that the tariffs violate the nondelegation doctrine. Depending on the outcome of the court cases, we could see this approach change in the future.
Conclusion
The September 5th Executive Order establishes a more systematic approach to trade negotiations while maintaining the administration's focus on addressing trade deficits through reciprocal measures. The success of this strategy will depend on the administration's ability to negotiate meaningful agreements with major trading partners while managing the economic impacts of sustained tariff pressure on American businesses and consumers.
For businesses operating in international markets, the EO underscores the importance of closely monitoring trade negotiations and preparing for continued policy evolution as the administration pursues its vision of "reciprocal" trade relationships.
For more information on how ONESOURCE Global Trade solutions can assist you in managing supply chain risk and regulatory compliance, contact your Account Manager or Client Success Manager.