Various “Exemptions”! Before the U.S. Supreme Court hearing in November, the Trump administration “adjusts” tariff strategy

Various “Exemptions”! Before the U.S. Supreme Court hearing in November, the Trump administration “adjusts” tariff strategy

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The Trump administration is quietly adjusting its signature tariff policy.

As the Supreme Court is set to hold a hearing on "reciprocal tariffs" in early November, the Trump administration has recently exempted dozens of goods from tariffs and has proposed tariff exemptions for hundreds of products during trade agreement negotiations with various countries.

On October 17, according to media reports citing informed sources, this shift reflects an emerging consensus within the administration: the U.S. should lower tariffs on goods not produced domestically. Meanwhile, the Trump team is expanding its use of Section 232 of the Trade Expansion Act of 1962, which has a stronger legal basis, currently using it as the basis for tariffs on metals and automobiles, and this month announcing a new round of tariffs on heavy trucks, pharmaceuticals, and furniture.

This strategic adjustment comes at a critical moment. If the Supreme Court rules against the administration, the White House may be forced to refund a large amount of previously collected tariffs. Informed sources revealed that the advance of the exemption policy reflects the Trump team's hedging strategy in the face of legal risks.

Substantial Expansion of Exemption Scope

Last month, Trump exempted tariffs on dozens of products, from gold to LED lights, through the Annex II list, covering various minerals, chemicals, and metal products. Many of these products are or will be subject to Section 232 tariffs.

Notably, he has also hinted at the possibility of hundreds more exemptions in the future. According to his signed executive order, a list of products that may be called "Annex III" outlines hundreds of goods that may receive zero-tariff treatment in the future. The list targets "products that cannot be grown, mined, or naturally produced in the United States," including certain agricultural products, aircraft and aircraft parts, and non-patented items used for pharmaceuticals.

The September executive order also authorizes the Department of Commerce and the Office of the U.S. Trade Representative to independently approve tariff exemptions without requiring Trump to sign an executive order each time. White House officials say this move will streamline the implementation of tariff policy and help fulfill the more than a dozen trade agreements Trump has announced.

While adjusting the "reciprocal tariffs" exemption policy, the Trump administration is stepping up the use of Section 232. This section has a stronger legal foundation than "reciprocal tariffs," and Trump has already used it to impose tariffs on metals and automobiles.

On Friday, Trump announced a 25% tariff on trucks and truck parts and a 10% tariff on buses under Section 232, effective November 1. The action also expands the tariff reduction plan for auto manufacturers, allowing them to apply for tax credits to partially offset the cost of tariffs on automobile and truck parts, with the period extended from 2027 to 2030.

Pro-protectionist Trump allies believe that Section 232 tariffs will ultimately more effectively push manufacturing back to the United States. Nick Iacovella, Executive Vice President of the Coalition for a Prosperous America, noted:

"It makes no sense to impose tariffs on products America has no capacity to produce. Section 232 is the most effective tool."

The adjustment of tariff policy demonstrates a clear softening of policy stance. For several months earlier, U.S. Secretary of Commerce Howard Lutnick insisted there were "no exemptions and no exceptions" for "reciprocal tariffs." But in a television interview at the end of July, he softened his stance, saying:

"If you grow something and we don't, then it can be imported tariff-free."

Enterprises Actively Seek Exemptions

Enterprises are getting exemptions in response to requests for tariff relief. In March of this year, the Consumer Brands Association wrote to the Trump administration urging officials to exempt goods such as coffee, oats, cocoa, spices, tropical fruits, and tin-plated steel sheets used for food cans from tariffs. Many such goods have now been included in Annex III and may be eligible for exemptions in countries signing trade agreements with the U.S.

Confectionery giant Hershey said in May it was "engaging with the U.S. government" to seek an exemption for cocoa. Cocoa tariffs have exacerbated the difficulties for the Pennsylvania-based chocolate manufacturer, which has been coping with high raw material prices and said it is taking every possible measure to seek changes to cocoa tariffs.

Some food companies have said they will raise prices to offset the cost increases brought by tariffs, but others have tried to keep prices stable. Andy Mecs, President of Chicken of the Sea, a seafood company under Thai Union Group, said that despite extremely sensitive tuna prices and facing tariffs, the company is still working to hold the price of core canned tuna products.

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