Clarification of Exceptions Under Executive Order 14257 of April 2, 2025, as Amended
President Trump issued a memorandum clarifying exceptions under Executive Order 14257, concerning tariffs imposed to rectify trade deficits.
The memorandum specifically defines 'semiconductors' under the order, listing the relevant Harmonized Tariff Schedule of the United States (HTSUS) headings and subheadings, to ensure that this critical industry is not affected by the tariffs.
The memorandum further mandates the modification of the HTSUS to reflect these exceptions and directs the refund of any duties already collected on these exempted items.
Finally, the memorandum reiterates the authorization given to appropriate agencies to utilize necessary powers under the International Emergency Economic Powers Act to ensure the proper execution of the executive order.
Arguments For
Protecting a Critical Industry: The exemption of semiconductors aims to safeguard the U.S. semiconductor industry, which is crucial for national security and economic competitiveness.
Addressing Trade Imbalances Strategically: The original executive order attempted to address trade deficits, with the semiconductor exemption representing a targeted approach to avoid harming a vital sector.
Promoting Economic Growth: Protecting the semiconductor industry helps retain jobs, stimulate innovation, and ensure a stable supply of semiconductors for various sectors.
Maintaining National Security: A robust domestic semiconductor industry is essential for national defense and technological leadership.
Arguments Against
Potential for Abuse: The broad definition of “semiconductors” might lead to unintended loopholes and exemptions, potentially hindering the effectiveness of trade policies.
Complexity of Implementation: Clarifying exceptions and ensuring accurate tariff application requires significant administrative effort and resources from relevant agencies.
Unfair Competition Concerns: Critics might argue that the exemption creates an unfair advantage for domestic semiconductor producers compared to foreign competitors.
Impact on International Relations: The executive order, and its exceptions, could strain relations with trading partners who might see it as protectionist and retaliatory.
MEMORANDUM FOR THE SECRETARY OF STATE
THE SECRETARY OF THE TREASURY
THE SECRETARY OF COMMERCE
THE SECRETARY OF HOMELAND SECURITY
THE UNITED STATES TRADE REPRESENTATIVE
THE ASSISTANT TO THE PRESIDENT FOR ECONOMIC POLICY
THE ASSISTANT TO THE PRESIDENT FOR NATIONAL SECURITY AFFAIRS
THE SENIOR COUNSELOR TO THE PRESIDENT FOR TRADE AND MANUFACTURING
THE CHAIR OF THE UNITED STATES INTERNATIONAL TRADE COMMISSION
SUBJECT: Clarification of Exceptions Under Executive
Order 14257 of April 2, 2025, as Amended
This section lists the recipients of the memorandum, including key cabinet officials and advisors involved in trade, economic, and national security policy.
The subject line clearly states the purpose: to clarify exceptions related to Executive Order 14257.
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), I declared a national emergency arising from conditions reflected in large and persistent annual U.S. goods trade deficits, and imposed additional ad valorem duties that I deemed necessary and appropriate to deal with that unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security and economy of the United States.
This paragraph provides context by referring to Executive Order 14257, which declared a national emergency due to persistent U.S. goods trade deficits and imposed tariffs.
The order aimed to address perceived threats to national security and the economy.
In Executive Order 14257, I stated that certain goods are not subject to the ad valorem rates of duty under that order. One of those excepted products is “semiconductors.” The subsequent orders issued in connection with Executive Order 14257 — i.e., Executive Order 14259 of April 8, 2025 (Amendment to Reciprocal Tariffs and Updated Duties as Applied to Low-Value Imports from the People’s Republic of China), and the Executive Order of April 9, 2025 (Modifying Reciprocal Tariff Rates to Reflect Trading Partner Retaliation and Alignment), (Subsequent Orders) — incorporate the exceptions in Executive Order 14257, including for “semiconductors.”
This paragraph explains that Executive Order 14257 included exceptions for certain goods, including semiconductors.
Later orders related to 14257 also maintained this exception.
That term’s meaning includes the products classified in the following headings and subheadings of the Harmonized Tariff Schedule of the United States (HTSUS):
· 8471
· 847330
· 8486
· 85171300
· 85176200
· 85235100
· 8524
· 85285200
· 85411000
· 85412100
· 85412900
· 85413000
· 85414910
· 85414970
· 85414980
· 85414995
· 85415100
· 85415900
· 85419000
· 8542
This section lists the specific Harmonized Tariff Schedule of the United States (HTSUS) codes that define what products are considered 'semiconductors' and thus exempt from the tariffs.
To the extent that the HTSUS does not currently fully reflect the products listed above as excepted from the ad valorem duties imposed under Executive Order 14257 and the Subsequent Orders, the HTSUS shall be modified by inserting in numerical order the headings and subheadings listed above into subdivision (v)(iii) of U.S. note 2 to subchapter III of chapter 99, effective as of 12:01 a.m. eastern daylight time on April 5, 2025. Any duties that were collected at or after 12:01 a.m. eastern daylight time on April 5, 2025, pursuant to Executive Order 14257 and the Subsequent Orders, on imports that are excepted under Executive Order 14257 and the Subsequent Orders because they are “semiconductors,” as explained in this memorandum, shall be refunded in accordance with U.S. Customs and Border Protection’s standard procedures for such refunds.
This paragraph mandates a modification of the HTSUS to accurately reflect the semiconductor exemptions.
It also directs the refund of any tariffs inappropriately collected on semiconductors after April 5, 2025.
As explained in Executive Order 14257 and the Subsequent Orders, the Secretary of Commerce and the United States Trade Representative, in consultation with the Secretary of State, the Secretary of the Treasury, the Secretary of Homeland Security, the Assistant to the President for Economic Policy, the Assistant to the President for National Security Affairs, the Senior Counselor to the President for Trade and Manufacturing, and the Chair of the United States International Trade Commission, are authorized to employ all powers granted to the President by the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) as may be necessary to implement Executive Order 14257 and the Subsequent Orders. Measures taken to implement Executive Order 14257 and the Subsequent Orders shall be done in accordance with this memorandum.
This paragraph reiterates the authority of specified officials to utilize powers under the International Emergency Economic Powers Act to implement the Executive Orders.
All actions are to be consonant with this memorandum's clarifications.
DONALD J. TRUMP
This is the presidential signature.