301 Tariff Extension with Product List; EU and U.S. Move Toward Mutual Tariff Cuts; “Reciprocal Tariffs” Ruled Illegal?

Introduction

① On August 28, 2025 (local time), the Office of the U.S. Trade Representative (USTR) announced an extension of the Section 301 tariff exemption originally set to expire on August 31, now extended to November 29, 2025.

② On August 21, 2025 (local time), the European Commission announced the elimination of import tariffs on all U.S. industrial products. In return, the U.S. pledged to lower tariffs on EU automobiles and auto parts from 27.5% to 15%.

③ On August 29, 2025 (local time), the Federal Court once again ruled that the U.S. government’s “fentanyl tariffs” and “reciprocal tariffs” were illegal. On September 2, Trump responded that an appeal would be filed the following day.

Section 301 Tariff Extended to November 29

[Notice]

On May 31, 2025, the USTR announced exemptions for 178 tariff lines, valid until August 31, 2025.

On August 28, 2025, the USTR decided to extend these 178 exemptions for another 90 days (until November 29, 2025). During this period, no additional tariffs under the Section 301 investigation will be imposed, meaning a suspension of 7.5%–25% duties.

[Exemption Period]

From 00:01 a.m. ET on September 1, 2025 to 11:59 p.m. ET on November 29, 2025, covering imports or withdrawals for consumption.

[Exemption Rules]
The exclusions listed in the annex of this notice apply to all products that meet the exclusion descriptions. Each exclusion’s scope is defined by the 10-digit statistical codes and product descriptions under subchapter III of Chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS), notes 20(vvv)(i), 20(vvv)(ii), 20(vvv)(iii), 20(vvv)(iv), and 20(www).

[Exempted Products]
Products listed under HTSUS Chapter 99, subchapter III, notes 20(vvv)(i), 20(vvv)(ii), 20(vvv)(iii), 20(vvv)(iv), and 20(www).

EU and U.S. Mutual Tariff Cuts

[EU Measures]

On August 21 (local time), the European Commission announced that it would eliminate import tariffs on all U.S. industrial products and expand market access for U.S. agricultural goods.

All tariffs on U.S. industrial products will be abolished, while U.S. seafood and some “non-sensitive” agricultural products will gain more favorable access. Another separate proposal grants duty-free treatment to U.S. lobsters (including processed products).

These measures are part of the joint statement released by the EU and the U.S. last week.

[U.S. Measures]

According to the statement, the U.S. pledged to reduce tariffs on EU automobiles and auto parts from 27.5% to 15%. Starting September 1, the U.S. will also impose zero or near-zero tariffs on products such as lumber, aircraft and parts, generics, and chemical precursors.

EU governments largely accepted the deal, describing it as “the lesser of two evils,” since failure to reach an agreement would have resulted in Trump imposing 30% tariffs on nearly all EU imports.

In reality, eliminating tariffs on U.S. industrial products may have limited impact, as two-thirds of such products are already duty-free. According to think tank data, the EU’s average tariff on U.S. industrial goods is just 1.35%, but tariffs on automobiles remain at 10%.

Federal Appeals Court Rules “Reciprocal Tariffs” Illegal

[Ruling Again Illegal]

On August 29 (local time), the U.S. Court of Appeals for the Federal Circuit ruled in a 7–4 vote that Trump wrongly invoked emergency powers to impose tariffs on imports from dozens of trading partners.

Previously in May, the U.S. Court of International Trade had ruled that the International Emergency Economic Powers Act (IEEPA) did not authorize Trump to implement “fentanyl tariffs” and “reciprocal tariffs.”

The ruling does not affect tariffs imposed under other legal authorities, such as Trump’s tariffs on steel and aluminum imports.

[Presidential Appeal]

In response, the Trump administration has appealed to the Supreme Court. The recent court ruling will remain stayed until October 14 to allow time for Supreme Court review.

On September 1 (local time), U.S. Treasury Secretary Bessent expressed confidence that the Supreme Court would uphold Trump’s use of the 1977 emergency powers law to impose broad tariffs on most trading partners.

“I believe the Supreme Court will support it—upholding the president’s authority under IEEPA. There are other powers available, but none as effective or as strong,” Bessent said.

Bessent also noted he was preparing a legal brief for the U.S. Attorney General, who will oversee the government’s Supreme Court appeal, stressing the urgency of addressing decades-long trade imbalances and stopping deadly fentanyl from entering the U.S.

On September 2 (local time), President Trump stated that his administration would request the Supreme Court to fast-track its ruling in order to overturn federal court decisions declaring many of his tariffs unlawful.

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