The United States continues to refine its reciprocal tariff regime. On September 5, President Trump issued an executive order modifying the list of goods exempted from tariffs under Executive Order 14257. Eight tariff classifications—including aluminum hydroxide, crystals, epoxide and phenolic resins, polyethylene terephthalate (PET) resin, and silicones—were removed from Annex II. These products are now subject to ad-valorem duties. At the same time, 40 new HTS codes were added to Annex I, exempting goods such as nickel, tin, thorium ores, certain chemicals, permanent magnets, and LEDs from reciprocal tariffs.
On September 8, United States Customs and Border Protection (CBP) implemented the order. In bulletin CSMS #66151866, CBP clarified that Annex II identifies exempted products and that the September 5 order both added and removed items. Importers must now report secondary classification under subheading 9903.01.32, within ten days from cargo release to correct pre-filed entry summaries for affected products. Goods removed from Annex II, such as PET resin, default to the country-specific reciprocal tariff rate.
Spotlight on Plastic Resins
The change drew particular attention because PET resin—a key input for beverage bottles, textiles, and packaging—lost its exemption from the 2025 tariff list. President Trump’s order extends duties to both virgin and recycled PET (rPET), raising costs for products imported under the Harmonized Tariff Schedule of the United States (HTSUS) codes 3907.61.00 and 3907.69.00. PET previously faced a 6.5 percent duty; it now falls under the country-specific reciprocal tariff.
For Vietnam, the removal of PET and epoxy/phenolic resins means exports of bottle-grade resin, polyester fiber precursors, and resin-based adhesives will now incur a 20 percent duty in the United States market. Vietnamese plastics manufacturers, who had benefitted from duty-free access, must decide whether to absorb the tariff, renegotiate with United States buyers, or seek alternative markets. The move signals the administration’s willingness to extend tariffs into plastics and packaging, pressing companies in the region to reassess contracts and supply-chain strategies.
Transshipment
CBP has not updated its guidance on transshipped goods; the August rules remain in effect. Goods deemed transshipped to evade duties continue to face a 40 percent ad-valorem penalty. While CBP has warned of increased enforcement, it has not published detailed criteria for “substantial transformation.” Businesses must therefore rely on traditional rules of origin and maintain thorough supply-chain documentation.
Trade Effects and Economic Indicators
Vietnamese customs data show that exports to the United States fell 2 percent in August, as compared to July, reaching $13.94 billion, while imports from China also dipped 2 percent. Despite the monthly decline, Vietnam’s exports to the United States in the first eight months of 2025 climbed 26.4 percent year-over-year to $99.05 billion. These numbers suggest that the 20 percent tariff has slowed but not reversed export growth.
Sector-Specific Impacts Are Emerging
- Textiles & apparel: Thin margins leave this sector highly exposed. United States buyers are demanding price concessions, and garments made with Chinese fabrics risk the 40 percent transshipment penalty.
- Electronics: Assembly in Vietnam must add sufficient value to qualify under the 20 percent rate. Heavy reliance on Chinese semiconductors increases reclassification risk, prompting investors to eye alternatives such as Thailand or India.
- Furniture: Bulky, cost-sensitive goods lose competitiveness under a 20 percent duty, accelerating shifts toward United States or third-country suppliers.
- Plastics & packaging: New tariffs on PET and epoxy/phenolic resins raise costs for United States importers and squeeze Vietnamese margins. United States buyers may turn to domestic producers, while rPET now faces the same duty, discouraging trade.
On the import side, Vietnam has tentatively agreed to remove tariffs on United States goods under a provisional deal. If enacted, this would make United States exports more competitive in Vietnam. However, the bilateral agreement remains unfinished, with publication still pending.
Legal Status: Litigation and Policy Developments
On August 29, the United States Court of Appeals for the Federal Circuit ruled that broad tariffs imposed under IEEPA exceed presidential authority, casting legal uncertainty over the current regime. As of mid-September, the Department of Justice has sought review, and importers must continue paying tariffs pending resolution. A Supreme Court reversal would have profound implications for United States trade policy and bilateral negotiations.
Meanwhile, no progress has been reported on the United States–Vietnam framework agreement announced in July. That deal envisioned reducing Vietnam’s tariff from 46 percent to 20 percent in exchange for eliminating tariffs on United States goods and adopting stricter rules on origin, currency, and market access. The September 5 executive order’s adjustments, made without finalizing the framework, suggest ongoing negotiations that may expand to additional sectors.
Practical Considerations for Businesses
Given the evolving tariff structure and unsettled legal landscape, companies should:
- Classify accurately: Update HTSUS codes for affected products and apply subheading 9903.01.32 correctly.
- Document supply chains: Demonstrate substantial transformation to avoid the 40 percent penalty and maintain audit-ready records, ideally with third-party certifications.
- Revise contracts: Allocate tariff risks, add duty-change provisions, and renegotiate cost-sharing where needed.
- Monitor policy: Track the Supreme Court appeal, CBP enforcement priorities, and new executive actions, particularly for plastics and transshipment.
- Diversify sourcing: Explore ASEAN or United States manufacturing to reduce tariff exposure and strengthen resilience.
