Executive Order on Reciprocal Tariff Adjustments

Published: Aug 1, 2025 10:57
President Trump has issued a new executive order imposing reciprocal tariffs on imports from key trading partners, with a 10% baseline duty taking effect seven days after the order for non-compliant nations. The order establishes a minimum 15% tariff on EU goods where current duties fall below that threshold, while maintaining previously announced 50% tariffs on Brazil starting August 6 and potentially increasing China tariffs from 30% to 54%. Goods already in transit will be exempt from new duties if entered by October 5, 2025, with energy commodities remaining duty-free. The order introduces strict anti-circumvention measures including 40% punitive tariffs on transshipped goods and requires biannual publication of circumvention-prone entities. The Commerce Department, DHS and USTR will lead implementation, monitoring the national emergency declared in April 2025 regarding trade deficits. The policy aims to pressure trading partners into fairer agreements while protecting U.S. industries, though it may lead to higher consumer prices. Countries finalizing trade deals with the U.S. may avoid the tariff increases.

By the authority vested in the President of the United States, Donald J. Trump, by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), section 604 of the Trade Act of 1974, as amended (19 U.S.C. 2483), and section 301 of title 3, United States Code, President Trump hereby determines and orders:

Section 1. Background

In Executive Order 14257 of April 2, 2025 (Regulating Imports With a Reciprocal Tariff To Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits), President Trump found that conditions reflected in large and persistent annual U.S. goods trade deficits constitute an unusual and extraordinary threat to the national security and economy of the United States that has its source in whole or substantial part outside the United States. President Trump declared a national emergency with respect to that threat and imposed additional ad valorem duties deemed necessary and appropriate.

President Trump has received additional information and recommendations from senior officials regarding the lack of reciprocity in bilateral trade relationships, the impact of foreign tariff disparities and non-tariff barriers on U.S. exports, domestic manufacturing, critical supply chains, and the defense industrial base. The President has also reviewed updates on foreign relations, economic matters, national security concerns, ongoing trade negotiations, retaliatory actions against the United States, and efforts by foreign nations to align with U.S. economic and security policies.

Some trading partners have agreed to—or are close to finalizing—meaningful trade and security commitments with the United States, demonstrating their intent to permanently address trade barriers contributing to the national emergency declared in Executive Order 14257. Others, despite negotiations, have proposed terms that, in President Trump’s judgment, fail to sufficiently correct trade imbalances or align with U.S. economic and national security interests. Certain trading partners have refused to engage in negotiations or take adequate steps toward alignment.

After reviewing this information, President Trump has determined it necessary and appropriate to impose additional ad valorem duties on goods from certain trading partners at the rates specified in Annex I of this order, subject to applicable exceptions under Executive Order 14257, as amended.

Section 2. Tariff Modifications

(a) The Harmonized Tariff Schedule of the United States (HTSUS) shall be modified as provided in Annex II. These changes shall take effect for goods entered for consumption (or withdrawn from warehouse for consumption) on or after 12:01 a.m. EDT, seven (7) days after the date of this order, except for goods already loaded for transit before that time, which shall remain subject to prior duties if entered before October 5, 2025, at 12:01 a.m. EDT.

(b) Trading partners listed in Annex I that are finalizing trade and security agreements with the U.S. shall remain subject to the duties specified until agreements are concluded and formalized in subsequent orders.

(c) For EU goods, the additional duty shall ensure a minimum 15% total ad valorem rate (no additional duty if the existing rate is already ≥15%).

(d) All other trading partners not listed in Annex I shall face a 10% additional duty, effective seven (7) days after this order.

(e) Certain HTSUS headings (9903.01.43–9903.01.62, 9903.01.64–9903.01.76) and subdivisions shall remain suspended until Annex II modifications take effect, after which they will be replaced by new trade partner-specific headings.

(f) Except as specified in (a)–(d), the terms of Executive Order 14257 (as amended) remain in force.

(g) This order does not alter Executive Order 14298 (May 12, 2025) on U.S.-China tariff adjustments.

(h) The Secretary of Commerce and U.S. Trade Representative, in consultation with CBP and the ITC Chair, may issue further HTSUS modifications via the Federal Register to implement this order.

Section 3. Transshipment

(a) Goods found by CBP to be transshipped to evade duties shall face:

  • A 40% punitive duty (replacing standard rates),

  • Fines under 19 U.S.C. 1592, and

  • All other applicable charges.
    No penalty mitigation shall be permitted.

(b) Every six (6) months, the Commerce Secretary and DHS (via CBP) shall publish a list of circumvention-prone countries and facilities for procurement and security reviews.

Section 4. Implementation

The Commerce Secretary, DHS Secretary, and U.S. Trade Representative—in coordination with State, Treasury, NEC, NSC, and ITC—are authorized to execute this order, including via regulatory adjustments and IEEPA powers. All agencies shall comply within their authority.

Section 5. Monitoring & Recommendations

(a) The Commerce Secretary and USTR shall monitor the national emergency and advise President Trump on needed actions or foreign compliance.

(b) If current measures prove insufficient, they shall recommend further steps.

(c) If trading partners retaliate or refuse cooperation, they shall propose additional countermeasures.

Section 6. Severability

If any provision is invalidated, the remainder of this order remains enforceable.

Section 7. General Provisions

(a) This order does not limit lawful agency authority or OMB budgetary functions.

(b) Implementation is subject to appropriations and applicable law.

(c) No private legal rights are created.

(d) The USTR shall cover publication costs.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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