US President Donald Trump has signed an executive order that will allow tariff exemptions from Monday for countries that agree on industrial export deals with the US. This new move aims to support trade partners who commit to reducing tariffs under a framework agreement.
What Does the Order Cover?
The order applies to over 45 categories of goods. Key materials like nickel, gold, pharmaceutical compounds, and chemicals will now qualify for zero import tariffs if the trading partner agrees to the terms set by the US. This includes items that the US cannot produce itself or where domestic production is not enough.
Goals Behind the New Tariff Policy
Since becoming president, Trump raised tariffs sharply to reduce the US trade deficit and encourage partner countries to make trade concessions. With this order, the US aligns its tariffs with existing agreements with allies such as Japan and the European Union. The goal is to balance trade and protect US national interests while supporting global cooperation.
How Will the Exemptions Work?
Once a reciprocal trade deal is reached, the US trade representative, the Commerce Department, and customs can waive tariffs on approved goods without needing new executive orders each time. This streamlined approach speeds up trade and reduces hurdles.
Key Products Affected
The zero-tariff list features crucial industrial and medical materials:
- Nickel and graphite for stainless steel and electric vehicle batteries
- Pharmaceutical compounds like lidocaine and reagents for medical tests
- Gold in various forms such as bullion, leaf, and powders
- Neodymium magnets and LED components
Important Changes and Exceptions
Interestingly, the new order removes previous exemptions for some plastics and polysilicon, a material important for solar panels. Countries like Switzerland, which had a 39% tariff due to no trade deal, stand to benefit if they secure agreements soon.
