Not everything gets hit: Donald Trump’s additional 25% tariff order hides key exemptions
25% ad valorem duty—which comes into effect 21 days after the August 6 announcement—won’t apply universally, giving U.S. importers and Indian exporters some breathing room.
- Aug 6, 2025,
- Updated Aug 6, 2025 9:10 PM IST
While President Trump’s August 6 executive order triggered global headlines by slapping an additional 25% tariff on all Indian imports, a lesser-known but crucial detail buried in the order reveals that not all goods will be affected.
Specific product exemptions could blunt the impact for key sectors like pharmaceuticals, electronics, and raw materials.
According to the official text of the executive order, certain categories of imports are exempt from the newly announced tariff hike. These exemptions include:
Goods covered under existing or future tariff orders under Section 232 of the Trade Expansion Act of 1962.
Items excluded by law (under 50 U.S.C. 1702(b)), which generally includes humanitarian goods, informational materials, and specific categories of agricultural products.
Articles listed in Annex II of Executive Order 14257, a previous Trump order targeting large trade deficits with reciprocal tariff logic.
This means the 25% ad valorem duty—which comes into effect 21 days after the August 6 announcement—won’t apply universally, giving U.S. importers and Indian exporters some breathing room.
The exemption clauses also clarify that goods shipped before the effective date (and arriving before September 17, 2025) will be spared the hike, creating a logistical rush to clear in-transit inventory. Additionally, foreign trade zones must treat impacted goods under privileged foreign status, a move that limits duty deferral tactics post-entry.
For Indian exporters, this could be critical. Sectors like IT services, pharmaceuticals, auto components, and engineering goods—which make up a significant chunk of India’s $80 billion U.S. export basket—may still remain competitive depending on classification and eligibility under the exemptions.
The catch? Tariff stacking is still possible. If an item is hit by the new 25% tariff and also listed under other executive actions, both could apply simultaneously unless explicitly exempted—intensifying pressure.
With U.S. negotiators expected in New Delhi on August 25, the exemptions serve as both a carrot and a stick—offering room for compromise while maintaining leverage. India, meanwhile, has called the tariff move “unfair, unjustified and unreasonable” and vowed to “take all actions necessary” to protect its interests.
While President Trump’s August 6 executive order triggered global headlines by slapping an additional 25% tariff on all Indian imports, a lesser-known but crucial detail buried in the order reveals that not all goods will be affected.
Specific product exemptions could blunt the impact for key sectors like pharmaceuticals, electronics, and raw materials.
According to the official text of the executive order, certain categories of imports are exempt from the newly announced tariff hike. These exemptions include:
Goods covered under existing or future tariff orders under Section 232 of the Trade Expansion Act of 1962.
Items excluded by law (under 50 U.S.C. 1702(b)), which generally includes humanitarian goods, informational materials, and specific categories of agricultural products.
Articles listed in Annex II of Executive Order 14257, a previous Trump order targeting large trade deficits with reciprocal tariff logic.
This means the 25% ad valorem duty—which comes into effect 21 days after the August 6 announcement—won’t apply universally, giving U.S. importers and Indian exporters some breathing room.
The exemption clauses also clarify that goods shipped before the effective date (and arriving before September 17, 2025) will be spared the hike, creating a logistical rush to clear in-transit inventory. Additionally, foreign trade zones must treat impacted goods under privileged foreign status, a move that limits duty deferral tactics post-entry.
For Indian exporters, this could be critical. Sectors like IT services, pharmaceuticals, auto components, and engineering goods—which make up a significant chunk of India’s $80 billion U.S. export basket—may still remain competitive depending on classification and eligibility under the exemptions.
The catch? Tariff stacking is still possible. If an item is hit by the new 25% tariff and also listed under other executive actions, both could apply simultaneously unless explicitly exempted—intensifying pressure.
With U.S. negotiators expected in New Delhi on August 25, the exemptions serve as both a carrot and a stick—offering room for compromise while maintaining leverage. India, meanwhile, has called the tariff move “unfair, unjustified and unreasonable” and vowed to “take all actions necessary” to protect its interests.