Trade

President Trump signed an executive order that keeps the 10% additional International Emergency Economic Powers Act tariff rate on China until Nov. 10 while negotiations continue.

The background: On March 5, IEEPA Fentanyl tariffs of 20% went into effect on goods from China. An additional IEEPA Reciprocal tariff rate of 10% was imposed on goods from China on April 9, which quickly escalated to 125% as China retaliated and the U.S responded in tit-for-tat announcements.

• In mid-May, the U.S. agreed to reduce its additional IEEPA Reciprocal tariff rate on China to 10% from 125%. China also reduced its retaliatory rate to 10%.

Other tariffs: The U.S. will retain all tariffs imposed on China prior to April 2, including Section 301 tariffs, Section 232 tariffs, IEEPA Fentanyl tariffs and Most Favored Nation tariffs.

CBP Guidance: U. S. Customs and Border Protection has already issued guidance which can be accessed here.

The Federal Circuit Court of Appeals held oral arguments last Thursday in the leading challenge to President Trump’s International Emergency Economic Powers Act tariffs.

The background: In this consolidated case, V.O.S. Selections v. Trump and Oregon v. Trump, the question before the court is whether President Trump’s global reciprocal tariffs and fentanyl tariffs exceed his authority under IEEPA.

• The appeal follows a May decision by the Court of International Trade to enjoin the tariffs after concluding that IEEPA “does not authorize the president to impose unbounded tariffs”—a decision that the Federal Circuit put on ice pending appeal.

The arguments: The Federal Circuit argument focused on the text of IEEPA, which does not expressly mention tariffs and limits the exercise of executive power to address “extraordinary and unusual” threats.

• Although the court appeared split on whether IEEPA allows the president to impose tariffs, most of the 11-judge panel seemed unwilling to accept that IEEPA authorizes the sweeping global tariffs at issue here.

The precedent: The government’s case relied heavily on the closest relevant precedent—the 1975 decision in U.S. v. Yoshida International—which upheld President Nixon’s use of the Trading with the Enemy Act (IEEPA’s predecessor) to place a 10% ad valorem tariff on all imports after the U.S. withdrew from the gold standard.

• The judges accused the administration of “ignoring the parts of Yoshida” it doesn’t like, including the Yoshida court’s express limitations on the president’s tariff authority.
• The court in that case carefully distinguished between a time-limited tariff “as a temporary measure calculated to help meet a particular national emergency, which is quite different from imposing whatever tariff rates he deems desirable.”

What’s next: “Although it is always difficult to predict judicial outcomes, we expect a decision against the Trump administration though not unanimous,” said NAM Vice President and Deputy General Counsel Erica Klenicki.

• “Nearly two dozen amicus briefs were filed in the case, including by members of Congress, legal scholars and think tanks from across the country. Given the high stakes and novel legal questions involved, we fully expect this case to end up before the U.S. Supreme Court next term.”

President Trump issued a new executive order imposing an additional 25% tariff on U.S. imports from India, in response to India’s continued purchase of Russian oil.

The background: In an EO issued March 8, 2022, shortly after Russia invaded Ukraine, the Biden administration prohibited U.S. imports of certain products from Russia, including crude oil, petroleum and related products.

• This new action cites that EO in imposing an additional ad valorem duty on imports from India, “which is directly or indirectly importing Russian Federation oil.”

Tariff stacking: The secondary tariffs are in addition to the 25% modified International Emergency Economic Powers Act reciprocal tariffs on India.

Timing: Secondary tariffs will take effect 21 days after the date of the EO, on Aug. 27.

• The EO includes an “on the water” exception for products loaded and in transit on the final mode of transit prior to that date and that enter the U.S. by Sept. 17.

Other details: The secondary tariff will not apply to goods subject to “existing or future actions under Section 232.”

• It will also not apply if the good is identified in Annex II to EO 14257 of April 2, 2025.

Further action? The EO suggests other countries purchasing Russian oil may become subject to similar secondary tariffs.

• It directs the Department of Commerce to coordinate with other agencies to “determine whether any other country is directly or indirectly importing Russian Federation oil,” and recommend whether to impose an additional 25% tariff on that country. Indirect importation is described as “through intermediaries or third countries.”
• Top importers of Russian oil—which the EO defines as both crude oil and petroleum products extracted, refined or exported from the Russian Federation—include China, Türkiye, Brazil and the European Union.

India responds: The government of India responded  in an official statement: “It is extremely unfortunate that the U.S. should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest.”

Late last week, Customs and Border Protection issued new guidance on Canada, Brazil and the changes to the International Emergency Economic Powers Act reciprocal tariff rates that take effect on Aug. 7 per the Further Modifying the Reciprocal Tariff Rates Executive Order.

Exemptions: The guidance covers classification of in-transit goods, USMCA-qualifying goods and goods identified as exemptions in Annex II of EO 14257.

Articles subject to Section 232 tariffs: The guidance also includes classification of articles subject to Section 232 tariffs, including iron, steel or aluminum and covered derivatives; passenger vehicles, light trucks and parts; and semifinished copper and intensive copper derivative products.

U.S.-originating content: The guidance also details classification of articles in which at least 20% of the value of the article is U.S. originating. The U.S. content will not be subject to the reciprocal tariff. The reciprocal tariff will be assessed on the non-U.S. content.

Transshipment: The guidance explains the procedure by which CBP will assess an additional ad valorem duty of 40% on goods determined by the agency to have been transshipped.

HTSUS reporting sequence: This guidance details the sequence for entering multiple HTSUS numbers, which may include a Section 301 tariff, an IEEPA tariff and/or a Section 232 or 201 tariff/quota.

Sources: You can find the three guidance documents below:

• Canada rates effective Aug. 1: CBP Guidance on Canada
• Brazil rates and exemptions effective Aug. 7: CBP Guidance on Brazil
• Reciprocal tariff rates effective Aug. 7: CBP Guidance on Reciprocal Tariffs

President Trump imposed a Section 232 tariff of 50% on semifinished copper and certain derivatives by presidential proclamation yesterday.

The reasoning: The proclamation cites Commerce Department findings that foreign competitors have used “state subsidies and overproduction” to outcompete domestic U.S. suppliers and that dependence on foreign sources has created “strategic vulnerabilities and jeopardizes the U.S. defense industrial base.”

What’s in scope: This proclamation does not list specific products, but a White House fact sheet describes the scope broadly as:

• Semifinished copper products like copper pipes, wires and sheets; and
• Copper-intensive derivative products like pipe fittings, cables and electrical components.

What’s not in scope: According to the White House fact sheet, copper input materials such as copper ores, concentrates, mattes, cathodes and anodes and copper scrap are not subject to 232 “or reciprocal tariffs.” Customs and Border Protection guidance will be critical to understanding this aspect of the proclamation.

Timing: The tariff goes into effect on Friday, Aug. 1.

Going forward: The proclamation directs the Commerce Secretary to establish a process within 90 days to consider adding derivative copper products to the scope of the tariff, similar to the process established for aluminum and steel.

• The Department of Commerce will also monitor imports of copper and derivatives going forward and will “from time to time” inform the president of further necessary action.

Domestic use: This proclamation invokes the Domestic Production Act to authorize the Commerce Secretary to require a certain percentage of U.S.-produced inputs be sold in the U.S. According to the fact sheet, this includes requirements that:

• 25% of high-quality copper scrap produced in the U.S. be sold in the U.S. to “improve access to this important feedstock for domestic fabricators and secondary refiners”; and
• 25% of copper input materials produced in the U.S. be sold in the U.S. by 2027, increasing to 30% in 2028 and 40% in 2029.

Brazil: Meanwhile, the president also released an executive order yesterday imposing an increased International Emergency Economic Powers Act tariff on imports from Brazil, citing concerns about violations of free expression rights and human rights in that country, as well as the “political persecution” of Brazil’s former president.

50%: The July 30 EO imposes an additional 40% tariff to be stacked with the 10% IEEPA “reciprocal” tariff issued on April 2, bringing the IEEPA tariff to 50%.

• This adjustment will go into effect seven days after the EO (not including the day itself).

Exemptions and adjustments: The EO includes a list of products not subject to this increase and also states that if a Section 232 tariff applies to the goods, the IEEPA tariff will not apply.

Going forward: As previewed in the president’s letter, the EO states that should Brazil retaliate, the U.S. tariff will be increased by the same amount.

• This EO directs the Secretary of State to monitor and recommend any additional actions under IEEPA.

The U.S. and European Union have announced a trade deal, but no joint statement or official order has been released, though the White House issued a broad fact sheet. The president must issue an executive order or other legal document amending his April 2 EO that established “reciprocal” tariff rates to make the terms of the new trade deal official.

15% tariff: President Trump said that U.S. goods would gain access to European markets without tariffs, but the specific terms of that arrangement are not yet known.

• Meanwhile, the EU agreed to a 15% tariff by the U.S. on its products, which it regards as a “clear ceiling.”
• The 15% tariff on EU goods will apply “across most sectors, including cars, semiconductors and pharmaceuticals,” according to a statement issued by EU President Ursula von der Leyen.
• President Trump and EU leaders also made differing statements about metals, with the EU statement saying that metal “tariffs will be cut. A quota system will be put in place.” President Trump, however, said the 50% tariff on steel and aluminum would remain.

Zero-for-zero: According to the EU statement, the U.S. and EU agreed on zero-for-zero tariffs on many strategic products, including all aircraft and component parts, certain chemicals, certain generics, semiconductor equipment, certain agricultural products, natural resources and critical raw materials.

• This agreement, if verified, would reflect in part the NAM’s longstanding advocacy of zero-for-zero tariffs on industrial trade.
• The EU has also said it is working to get other products added to this list.

EU investments in the U.S.: President Trump suggested the EU would purchase $750 billion in U.S. liquefied natural gas, oil and nuclear fuels; buy U.S. military equipment; and increase its foreign direct investment into the United States by $600 billion. The EU statement references energy and U.S. AI chips.

Stay tuned: These statements represent an uncertain sketch of an eventual deal, and the NAM will report on the official terms of the agreement once they become available.

• Meanwhile, President Trump indicated in a press conference that other countries might soon receive tariff letters outlining new rates, though these too require EOs to become official policy.

The Trump administration has released the text of a framework agreement with Indonesia yesterday, also announcing a deal with Japan that has not been made public yet.

Framework agreement with Indonesia: The document released yesterday is a framework for negotiating an “Agreement on Reciprocal Trade.” It includes some commitments but also lays the groundwork for more negotiations.

U.S. exports to Indonesia: Indonesia will “eliminate tariff barriers” on approximately 99% of U.S. industrial and agricultural exports.

• For context, U.S. manufacturing exports to Indonesia in 2024 were $6.5 billion of the $10.2 billion total. Manufacturing imports from Indonesia in 2024 were $25.4 billion of the $28 billion total.

U.S. imports from Indonesia: This agreement would reduce the U.S. tariff on imports from Indonesia to 19% from the 32% rate imposed by the Trump administration on April 2.

• Significantly, the agreement suggests the U.S. “may identify certain commodities not naturally available or domestically produced for further reduction in the reciprocal tariff rate.”
• This type of approach is exactly what the NAM has pushed for in its proposed U.S. Manufacturing Investment Accelerator Program, and it will continue advocating for such policies in subsequent trade agreements.

Critical minerals: Indonesia, which had previously banned exports of nickel, will also remove restrictions on exports to the U.S. of industrial commodities, including critical minerals.

Other key components: The agreement also achieves commitments by Indonesia on other key trade issues.

• Nontariff barriers: Indonesia will accept U.S. standards and certifications for vehicles, medical devices and pharmaceuticals, exempt certain U.S. products from local content requirements and also allow the import of U.S.-remanufactured goods.
• Digital trade: The country will also now support the World Trade Organization’s e-commerce moratorium on tariffs on electronic transmissions—something it had opposed previously and that is essential to manufacturers seeking to move information across borders.
• Steel: Indonesia pledged to join the Global Forum on Steel Excess Capacity, an approach the NAM supports to address unfair subsidization and excess production, particularly by China, that distort global markets.
• China: Indonesia will work with the U.S. to address the unfair practices of other countries and to cooperate on export controls, investment security and combatting duty evasion.
• Purchases: Indonesia has agreed to purchase U.S. aircraft, agricultural products and energy products.

More to come: President Trump has previewed agreements with the Philippines and Vietnam on social media, while Japanese officials have announced an agreement on tariffs at a press briefing. The NAM will report on the official details once they are available.

The bigger picture: Here are some other trade developments that the NAM is tracking:

• U.S. Treasury Secretary Scott Bessent will meet his Chinese counterpart in the coming days.
• President Trump will travel to Scotland for discussions on “finalizing” details in the U.K. deal.
• Talks with the EU, Canada and Mexico continue.
• And lastly, the president has signaled he may send letters setting a flat rate of 10–15% tariffs to some 150 countries.

There’s a lot for manufacturers in the U.S. to celebrate right now, starting with the historic passage of the One Big Beautiful Bill Act with pro-growth tax provisions—but they are still seeking more policy fixes to help them grow and compete, the NAM said last week at the 14th annual John Hazen White Manufacturing Forum at The Brookings Institution.

Starting with tax policy: “When we think about the president’s manufacturing strategy, his manufacturing policies, you really have to start with tax policy,” NAM Managing Vice President of Policy Charles Crain said about manufacturing under the Trump administration.

• “We know from the 2017 Tax Cuts and Jobs Act the impact that pro-growth tax policy [had] on manufacturing in 2018 and 2019. Coming out of the TCJA, we saw record capital investments in the manufacturing industry. We saw record job increases. We saw record wage increases.”
• The One Big Beautiful Bill Act, signed into law on the Fourth of July, “prevents … tax increases, and it really should support manufacturers’ efforts to drive manufacturing growth,” Crain continued, adding that the OBBBA included incentives for capital equipment purchases, research and development, factory building and more.
• The legislation is “a big win” for manufacturing and “a real credit to the president,” he said.

Reaching a shared goal: Even if the U.S. were “operating at full capacity,” manufacturing in the country would still require imports from other nations—making a commonsense trade policy a necessity, Crain said.

• In practice, manufacturing in the U.S. is only making about 67% of inputs required for finished goods, Crain said.
• “So we really need to solve for that 30-ish percent of outstanding inputs that we need to make things here. … Manufacturers need inputs to make things, and we need export markets to sell things. And so we think that a commonsense trade policy can allow for the president to achieve [the administration’s] trade policy goals without preventing manufacturers from investing here in America, which is a goal we all share.”

Giving manufacturers certainty: In the latest quarterly NAM Manufacturers’ Outlook Survey, just 55% of manufacturers—the lowest reading since the global pandemic in 2020—reported feeling positive about their companies’ outlook, Crain said. The top reason for the optimism drop? Trade uncertainty, something that a comprehensive U.S. trade policy can help remedy.

• Not knowing what to expect next when it comes to trade “makes it more difficult to make long-term investment decisions that we know drive manufacturing growth,” according to Crain.
• While tax uncertainty has now “been taken off the table” thanks to the passage of the OBBBA, “we’re still facing additional barriers to those long-term decisions that we need to create jobs here in America.”
• It’s also critical to manufacturing in the U.S. that the current corporate tax rate be maintained, Crain said. “[I]f we have a 35% corporate rate as opposed to the current 21[%], it’s going to be really difficult to onshore domestic manufacturing.”

Fewer regulations needed: Manufacturing in the U.S. also needs more balanced regulations—and fortunately, that’s something the administration began doing on day one.

• “[M]anufacturers, in our experience, have been very encouraged to see the administration taking a second look at some of the rules that were finalized in recent years … finding ways to maintain reliable rules of the road, but [also] to make those rules less costly.”

Open jobs in manufacturing: Manufacturers also remain committed to filling the 400,000 open manufacturing jobs in the U.S., Crain said, addressing an audience question.

• Manufacturers “are really focused on providing competitive benefits, having flexible work schedules, having onsite child care” as well as “partnering with local community colleges to implement training programs [and] partnering with the military to bring folks coming out of active duty into manufacturing shop floors.”

The takeaways: The OBBBA “delivers for manufacturers in America by making pro-growth tax provisions permanent,” Crain wrote on X following the event.

• But “[t]o ensure we can continue to grow manufacturing in America, policymakers must pursue a comprehensive manufacturing strategy that will provide manufacturers the tools, and the certainty, needed to make long-term investments,” he wrote in a second post.

President Trump issued more tariff letters late last week, warning major U.S. trading partners of the tariffs that will go into effect if negotiations do not lead to agreements by Aug. 1. Tariffs on Canadian imports will be assessed at 35%, while Mexican and European Union imports will see new tariffs of 30%.

Canada: The letter to Canada accuses the country of failing to stop the flow of fentanyl drugs into the U.S., while also citing tariff and nontariff trade barriers, including dairy policies.

• Canada is subject to an International Emergency Economic Powers Act fentanyl tariff rate of 25%. According to an April 2 executive order, if IEEPA fentanyl tariffs are withdrawn, a 12.5% IEEPA “reciprocal” tariff rate would replace them.
• USMCA-compliant goods are exempt from the existing Canada tariffs. The July 10 letter does not specify whether goods that qualify for an exception under the USMCA will continue to be exempt. It also does not say whether energy and energy resources from Canada will still be subject to the lower 10% tariff.
• The letter also warns that goods that are transshipped will be subject to an unspecified, higher tariff, and that an additional 35% tariff will be imposed should Canada retaliate.

Mexico: The letter to Mexico cites the country’s “failure to stop the Cartels,” while also mentioning trade barriers.

• Mexico is subject to the same arrangement as Canada under the April 2 executive order—IEEPA fentanyl tariffs of 25%, which if withdrawn would be replaced by a 12.5% “reciprocal” tariff.
• The letter to Mexico is likewise unclear about the USMCA exceptions and contains similar warnings about transshipment penalties and an additional 30% tariff in the case of retaliation.

EU: The European Commission also received a letter, which threatens the EU with a 30% tariff, a number “far less than what is needed to eliminate the trade deficit.” The letter also says that the U.S. expects “complete, open market access.”

• EU retaliatory tariffs were set to take effect this week but have been suspended pending negotiations.

The response: In a  post on X, Canadian Prime Minister Mark Carney said, “We are committed to continuing to work with the United States to save lives and protect communities in both our countries. … We are strengthening our trading partnerships throughout the world.”

• In a statement, EU Commissioner Ursula von der Leyen said the EU is “working towards an agreement by August 1,” adding that the EU “will take all necessary steps … including the adoption of proportionate countermeasures if required.”

President Trump signed more individual country letters this week, following his extension to Aug. 1 of the pause on “reciprocal” tariffs over 10%.

A quick recap: The president had delayed tariffs on individual countries, which had been announced on April 2, until July 9. He imposed a flat 10% tariff until then on all countries except Mexico, Canada and China.

• This week, he extended that pause until Aug. 1. If new trade deals are not reached by then, individual country rates will go into effect.

More letters: The president had issued letters on July 7, assigning tariff rates to imports from more than a dozen countries and followed those up with more letters to other countries on July 9. The second round included Libya, Iraq, Algeria, Moldova, Brunei and the Philippines.

• The letters also warned that if countries impose retaliatory tariffs, U.S. levies will rise as well. The increases cited in the letters range from 25% to 50%.
• You can find a full chart here of the countries that have received letters, as well as those that were included in the April 2 order but have not yet received letters.

Targeting Brazil: The U.S. ran a trade surplus with Brazil in 2024, which means it was not included in President Trump’s imposition of tariffs in April.

• Decrying the legal proceedings against former Brazilian president Jair Bolsonaro along with social media censorship policies (as well as trade barriers), President Trump announced that the U.S. is imposing a 50% additional tariff on Brazil, which will rise another 50% should Brazil retaliate.
• President Trump also ordered the United States Trade Representative to open a Section 301 investigation into Brazil’s “attacks on the digital trade activities of American companies” and other unfair trade practices, which could result in other tariffs.

Section 232: In a Truth Social post, the president mentioned plans for Section 232 tariffs on copper.

• The administration will have to issue a proclamation and provide documents defining the scope of the tariffs, including which products are subject to them, so details are yet to come.

The NAM is monitoring the administration’s actions on Section 232 closely and has been detailing manufacturers’ interests and concerns for the administration. You can read about its advocacy here.