Trump Shields Key Allies From Tariffs in Bid to Strengthen Trade Ties

U.S. President Donald Trump has signed an executive order that provides tariff exemptions for trading partners who strike deals on industrial exports such as nickel, gold, and other metals, as well as pharmaceutical compounds and chemicals.

During his first seven months in office, Trump has been working to reorder the global trading system, reduce U.S. trade deficits, and extract concessions from trading partner countries by implementing significant tariff increases. His most recent order outlines more than 45 categories for zero import tariffs from “aligned partners” who secure framework agreements to reduce Trump’s “reciprocal” tariffs and duties imposed under the Section 232 national security statute.

Friday’s order aligns U.S. tariffs with its commitments in pre-existing framework deals, including those with allies such as Japan and the European Union. The exemptions for countries with U.S. trade deals are set to commence at 12:01 a.m. EDT/0401 GMT on Monday.

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The order states that the President’s willingness to reduce tariffs relies on the “scope and economic value of a trading partner’s commitments to the United States in its agreement on reciprocal trade” and the U.S.’s national interests. These cuts cover items that “cannot be grown, mined, or naturally produced in the United States” or produced in sufficient volume to meet domestic demand.

A White House official disclosed that it also creates new carve-outs for certain agricultural products, aircraft and parts, and non-patented articles for use in pharmaceuticals. In situations where a country has negotiated a “reciprocal” trade deal with the United States, the U.S. Trade Representative, the Commerce Department, and customs can waive tariffs on covered imports without requiring a new executive order from Trump.

Among the zero-tariff items listed in the order are graphite and multiple forms of nickel, a crucial ingredient in stainless steel manufacturing and electric vehicle batteries. Compounds used in generic pharmaceuticals, including the anesthetic lidocaine and reagents used in medical diagnostic tests, are also covered.

The order covers various types of gold imports, from powders and leaf to bullion, a key import from Switzerland, which is grappling with U.S. tariffs of 39% as it has not yet reached a trade deal. It also permits tariffs to be scrapped on natural graphite, neodymium magnets, light-emitting diodes (LEDs), and abolishes previous tariff exemptions on specific plastics and polysilicon, a key component of solar panels.

The repercussions of this order on international trade relationships and the economy will be seen in the coming weeks.