By: Brian Walczyk, Compliance Manager, TradeInsights, LCB, CCS

On Thursday, September 4, the White House issued an executive order adjusting the treatment of Japanese origin goods with respect to IEEPA Reciprocal rates.

The rates are retroactive for goods entered for consumption, or withdrawn from warehouse for consumption, on August 7, 2025, at 1201 EST or later. Refunds will be handled “pursuant to applicable laws and CBP’s standard procedures for such refunds.”

The updates to the US HTS, with modifications likely to chapter 99, are to be published within 7 days for the executive order.

Goods with a General, most favored nations (MFN), rate of 15% or more will have a 0% IEEPA Reciprocal Rate.

Goods with a General, MFN, rate of less than 15% will face an IEEPA Reciprocal rate by the following formula: 15% – MFN = IEEPA Reciprocal

Goods with a specific or compound rate will be handled as outlined in Annex II of Executive Order 14326 (EU provisions).

Goods subject to Section 232 Automotive and Auto Parts will also benefit from the 15% all-inclusive rate. They will follow the same logic as when determining the IEEPA Reciprocal Rate for the Sec 232 Auto rate.

Aerospace products as defined in the WTO Trade in Civil Aircraft Agreement, except unmanned aircraft, will no longer be subject to IEEPA Reciprocal or Section 232 Steel, Aluminum, and Copper orders.

The order does outline an option for duty free treatment on specific natural resources unavailable at sufficient scale in the U.S., and for generic drugs, ingredient and chemical precursors – at the discretion of the Secretary of Commerce. These duty free offerings are contingent on the actions of Japan in implementation of their commitments in the deal.

We will continue to monitor this situation and issue updates as needed. Please contact your V. Alexander account team, or you may also contact our Trade Compliance team at tradeinsights@valexander.com with any questions, and you can always follow us on our website www.valexander.com for updates on this and other topics.