Regulating Imports With a Reciprocal Tariff To Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits
Executive Order 14257 declares a national emergency due to large and persistent U.S. goods trade deficits and directs a broad, reciprocal tariff policy aimed at rebalancing global trade. The core idea is to impose an additional import duty on most goods entering the United States, starting at 10 percent, with higher country-specific duties set out in Annex I. The order also shifts the U.S. tariff system by modifying how duties are applied (including a “U.S. content” requirement and various exemptions) and gives the President authority to adjust the tariffs over time in response to partner behavior. The stated goals are to strengthen domestic manufacturing and the defense-industrial base, reduce exposure to supply-chain disruption, and restore greater reciprocity in international trade. Implementation involves the Department of Commerce, the U.S. Trade Representative, and other federal agencies, with ongoing reporting to Congress. In short, it creates a sweeping, enforceable tariff tool to push trading partners toward reciprocal practices, while reserving power to raise, lower, or tailor duties as conditions change. It also embeds guardrails on who pays, how rates apply, and when certain exemptions expire or change, and it ties the policy to U.S. manufacturing, national security, and supply-chain resilience goals.
Key Points
- 1National emergency and reciprocal tariff framework: The order cites a national emergency caused by non-reciprocal trade practices and large U.S. goods trade deficits, and establishes a policy to rebalance trade via additional import duties on all imports from all trading partners, with higher duties for partners listed in Annex I.
- 2Initial and partner-specific duties: An initial 10 percent ad valorem duty applies to most imported goods, followed by partner-specific rates specified in Annex I. These duties stay in force until the President determines the underlying conditions are resolved.
- 3Implementation dates and scope: The general 10 percent duty takes effect for goods entered for consumption on or after April 5, 2025 (with a transitional exception for goods in transit). On April 9, 2025, country-specific rates from Annex I apply for imports from those partners. The order also modifies the Harmonized Tariff Schedule (HTSUS) to implement these rates via Annexes I and II.
- 4Exemptions and special rules: Annex II lists goods not subject to the general duties (e.g., items covered by other security or law-enforcement authorities, certain steel/aluminum products under existing 232 measures, and other enumerated categories). There are special rules for Canada and Mexico under USMCA-related provisions, including how certain border-related duties apply and when USMCA-originating goods may be treated differently.
- 5U.S. content and value rules: For most articles, the additional duties apply to non-U.S. content unless the article meets a 20 percent U.S. origin threshold (the value of components produced in the United States or substantially transformed there). CBP is empowered to collect documentation to determine U.S. content and the degree of U.S. finishing.
- 6Privileged foreign status and de minimis treatment: Articles that qualify for “privileged foreign status” (under specified domestic-status rules) may be treated differently. Duty-free de minimis treatment remains available for certain articles described in subsection (a) for a period, but the Secretary of Commerce must notify when processing capacity is adequate to collect duties, at which point de minimis treatment for those articles may end.
- 7Modification and enforcement authority: The Secretary of Commerce and USTR, with other senior officials, are authorized to propose additional actions if the measures do not resolve the emergency. The President may further modify HTSUS rates in response to retaliation, progress by trading partners toward reciprocity, or worsening manufacturing capacity, among other factors.
- 8Implementation and oversight: The order directs federal agencies to use all powers available under IEEPA and NEA to implement the policy, and requires recurring and final reports to Congress about the national emergency and the tariff program.