Modifications to Scope
On Friday, September 5th, 2025, President Trump announced via Executive Order a large number of modifications to the scope of the reciprocal tariffs, which were initially announced on April 2, 2025, under the International Emergency Economic Powers Act (IEEPA). The Executive Order released on September 5thmodified the scope of the tariffs by amending Annex II to cover additional products under exclusion, as well as remove some products from exclusion. The newly-added products that are excluded from reciprocal tariffs effective September 8th, 2025, include certain critical minerals and pharmaceutical products that are currently under Section 232 investigation, as well as precious metals such as gold and silver. Products that have been removed from Annex II and are now subject to reciprocal tariffs effective September 8th, 2025, include certain aluminum hydroxide, resin, and silicone products.
Previously, the reciprocal tariffs applied to nearly all imports, apart from certain products such as:
- Articles subject to 50 U.S.C. § 1702(b), which covers various forms of communication not involving any transfer of value, donations, informational materials, ortransactions generally occurring with respect to travel to or from any country;
- Articles potentially subject to other tariff authorities, such as products subject to certain Section 232 investigations or tariffs; and
- Articles listed in Annex IIof the Executive Order 14257.
Potential Tariff Adjustments for Aligned Partners (PTAAP)
Further, the September 5th, 2025, Executive Order created a framework to guide both future and existing trade deals. The Potential Tariff Adjustments for Aligned Partners (PTAAP) Annex lays out which products the President may be willing to reduce reciprocal tariffs on by applying only the Most-Favored-Nation (MFN) tariff in the event of a concluded future deal with a trading partner. In determining which products apply for a tariff reduction, the President and other senior officials, such as the Secretary of Commerce and the United States Trade Representative, will consider the extent of a trading partner's commitments to addressing United States trade concerns when implementing a deal. The products included in the PTAAP Annex cover the following categories:
- Certain aircraft and aircraft parts;
- Certain generic pharmaceuticals and their ingredients;
- Unavailable natural resourced and closely related derivative products; and
- Certain agricultural products not grown or produced in sufficient quantity in the United States to meet domestic demand.
The PTAAP Annex and framework closely resembles the United States-Japan deal, which was signed into effect on September 4th, 2025 via Executive Order. This agreement was first announced on July 22, 2025, and allowed U.S. importers to pay 15% reciprocal tariffs on Japanese products, while Japan was required to invest $550 billion dollars into the U.S. This tariff rate of 15% included automobiles and automobile parts, marking Japan as the first nation to achieve reduction of tariffs on automobiles and automobile parts without volume restrictions, which was a significant feat in light of the levies on this sector as a result of a Section 232 investigation culminating in a 25% duty rate.
The inclusion of the PTAAP framework in the Executive Order represents a carrot for trade partners in the context of the tariff sticks, offering those countries negotiating trade deals a framework that is less daunting than the current tariff landscape. The efficacy and the applicability of the newest Executive Orders on reciprocal tariffs remains to be seen as the appeal of the IEEPA tariffs is considered by the Supreme Court.
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