Further Modifying the Reciprocal Tariff Rates
This Executive Order (EO 14326) updates and expands the reciprocal tariff actions the President began in EO 14257 to address what the administration describes as a national emergency caused by large and persistent U.S. goods trade deficits. It directs changes to the Harmonized Tariff Schedule of the United States (HTSUS) to impose additional ad valorem (percentage) duties on imports from specified foreign trading partners (listed in Annex I) and establishes default and special rules for other countries (including the European Union). The order also strengthens anti‑circumvention enforcement (transshipment), assigns agencies authority to implement the changes, and directs continued monitoring and potential further action. The stated purpose is to pressure trading partners to remove discriminatory trade barriers, restore reciprocity, protect U.S. manufacturing and critical supply chains, and safeguard national security. The policy will raise duties on a range of imports, increase customs enforcement and compliance obligations, and could affect prices, supply chains, international trade relations, and negotiations with impacted countries.
Key Points
- 1Modifies tariffs via the HTSUS: The HTSUS will be changed as described in Annex II so that goods entered for consumption (or withdrawn from warehouse) on or after 12:01 a.m. eastern daylight time 7 days after the EO's date are subject to the new duties. There is an exception for goods already loaded and in transit that are entered before 12:01 a.m. EDT on October 5, 2025 — those remain subject to the prior EO 14257 duties.
- 2- Plain language: new tariff rates go into effect one week after the order, but shipments already on the way and entered by Oct 5, 2025, are grandfathered under the older rates.
- 3Country‑specific duties (Annex I) and default rate: Certain countries named in Annex I will be subject to the specific additional ad valorem rates listed there. Any trading partner not listed in Annex I will face an additional ad valorem duty of 10% (the default) unless the order says otherwise.
- 4- Plain language: some countries get specifically set duties; all other countries face a 10% surcharge.
- 5European Union special rule (Column 1 floor to 15%): For goods from the European Union, the additional duty is calculated so that the sum of the U.S. "Column 1" duty (the base statutory rate in the HTSUS) plus the new additional duty equals at least 15% when a product’s Column 1 rate is below 15%. If the Column 1 duty is already 15% or higher, no additional duty is added.
- 6- Plain language: the EO ensures EU imports face at least a 15% total ad valorem tariff unless the normal U.S. base duty is already 15% or more.
- 7Anti‑circumvention (transshipment) and penalties: CBP may find imports transshipped (rerouted through other countries) to evade duties. Those goods are subject to a 40% additional ad valorem duty (in place of the country‑of‑origin rate under section 2), plus any other fines/penalties (including under 19 U.S.C. 1592) and applicable U.S. charges. The EO directs that mitigation or remission of such penalties should not be allowed when legally consistent. The Secretary of Commerce and DHS (CBP) will publish a list every six months of countries and specific facilities used in circumvention schemes.
- 8- Plain language: intense penalties (40% duty) and no leniency for imports caught evading the tariffs; government will name known circumvention hubs twice a year.
- 9Implementation, monitoring, and further action authorities: The Secretary of Commerce, Secretary of Homeland Security (through CBP), and the U.S. Trade Representative are tasked with implementing these changes, modifying regulations and the HTSUS as needed, and monitoring whether trading partners take adequate steps to resolve the underlying emergency from EO 14257. They must recommend further steps if necessary. The order invokes authorities including IEEPA and the Trade Act, and it preserves other executive authorities and previously issued EOs (notably does not alter EO 14298 on China).