Implementation of the US-Japan Agreement: On 4 September, the White House published an Executive Order (EO) on the framework for the US-Japan Agreement. The agreement follows similar language/tariff treatment of goods from the US-EU joint statement.
Into the US: The EO confirms rather than stacking IEEPA tariffs on MFN, the 15% reciprocal tariff is a flat rate. (If MFN is higher than 15%, MFN will apply.) US MFN rate on packaging machinery of 8422 is duty free and food processing machinery of 8438 ranges from 0%-2.8%. As such, the tariff on imported machinery is 15%.
Into Japan: Japan is expected to provide preferential market access for several U.S. goods. However, Japan’s tariffs on U.S. manufactured equipment and machinery under HS codes 8422 and 8438 are already MFN-duty free, so no expected tariff benefits for US exporters to Japan under the announced agreement.
Executive Order modifying scope of reciprocal tariffs: On 5 September, the White House released an Executive Order outlining that certain goods may be potentially eligible for removal of IEEPA tariffs through conclusion of country-specific/bilateral agreements. The EO includes a list of tariff codes for products that cannot be grown, mined, or naturally produced in the United States or in sufficient quantities to satisfy domestic demand, certain agricultural products; aircraft and aircraft parts; and certain articles for use in pharmaceutical applications. The EO delegates consideration of these exemptions to Commerce. We see no direct impact for PMMI members given no PMMI tariff codes on the list and the EO does not limit the scope of Section 232 tariffs. Sharing this for informational purposes as this action may provide future tariff relief to US food manufacturers that source spices, cocoa, and other certain ag products, and from the industrial side, limited to aircraft and pharma industries for now.
Department of Justice Appeals IEEPA ruling to the Supreme Court: On 3 September, in filing their appeal, DOJ submitted a request for an expedited timeline for the case and a decision by Wednesday, 10 September on whether the Supreme Court will hear the case. The plaintiffs have agreed a final decision on the validity of IEEPA tariffs is essential. The requested timeline, if accepted by the Court, oral arguments would be expected in the first week of November with a decision anticipated in late 2025/early 2026.
Preparation for trilateral review of USMCA to begin: Meetings between US, Canada and Mexico are required under USMCA to review at the 6 year mark whether the agreement is working for all trading partners, so 1 July 2026. USTR is expected to publish its request for public comments on USMCA as soon as this week with a public hearing to be scheduled in January 2026.
U.S. Department of Justice launches Trade Fraud Task Force: On Friday, 29 August, the DOJ released a statement announcing the cross-agency Trade Fraud Task Force partnering with Customs and Border Protection and Homeland Security Investigations in an effort to “to aggressively pursue enforcement actions against any parties who seek to evade tariffs and other duties”. This is one mechanism to enforce the new trans-shipment provisions included in the EO implementing the new reciprocal tariffs on 7 August.
Status of US Bilaterial Negotiations and Discussions: Please see the chart below for the latest on how certain countries are engaging with the United States in effort to reduce reciprocal tariffs and conclude bilateral deals.
Trade Policy Actions by Other Countries
India Challenges US Tariffs at the World Trade Organization: On 2 September, the WTO circulated the Indian Trade Delegation’s notification seeking consultations on US Section 232 tariffs of 50% on copper implemented on 1 August.
Mexico proposes levying tariffs on China: As reported on 4 September, Mexico’s President Claudia Sheinbaum intends to increase tariffs on imports from China in a budget proposal later this month. Certain industries are concerned that imports from China and other countries into Mexico are taking advantage of USMCA to lower tariff costs for imports into the United States. It is anticipated this is one of multiple actions the Mexican government may take to more closely align with the Administration on economic security and border measures.
BRICS countries continue increased cooperation: On 3 September, China’s President Xi Jinping hosted Russian President Vladimir Putin and India’s Prime Minister Narendra Modi at the Shanghai Cooperation Organization. On 8 September, Brazil’s President Lula da Silva convened an online emergency summit focused on US trade policies in which Presidents Putin and Xi attended.
