"US Reciprocal Tariffs": What Annex II actually excludes—and what it does not

Affected Goods and Distinction from Supposedly Excluded Products

The US tariffs coming into effect from April 2025 under the "Reciprocal Tariff" policy are causing significant uncertainty among exporting companies in the EU and Switzerland.

While the majority of product groups will be subject to additional tariffs, Annex II of the official Executive Order offers a glimmer of hope for the first time: A list of customs tariff numbers that are explicitly excluded.

But be cautious: the listed headings are only seemingly clear. Relying solely on the four-digit HS heading risk inaccurately assuming an exception. Many positions contain explicit exclusions in the HS notes and explanatory notes, which are not immediately apparent.

In this series, we exemplify individual HS headings from Annex II and demonstrate which products are not covered by the exception.

HS Heading 3824: Prepared Binders for Molds or Cores; Other Chemical Products and Preparations, n.e.c.

Heading 3824 is a catch-all heading for various chemical products not otherwise specified. It generally excludes isolated chemically defined elements or compounds – with few exceptions.

The products falling under this category are either not chemically uniform (e.g., as by-products such as naphthenic acids) or preparations in the form of mixtures, emulsions, dispersions, or solutions.

Preparations under heading 3824 can consist entirely of chemical substances or exclusively of natural products.

However, they do not include aqueous solutions of chemical products from chapters 28 or 29, as these remain in their original chapters. Solutions of these products in other solvents are deemed – with few exceptions – to be preparations and may fall under heading 3824.

However, mixtures of chemical substances with nutritional value, intended for the preparation of foods, such as baking aids, are not included under heading 3824. These are typically classified under heading 2106 (see the General Explanatory Notes to Chapter 38).

❌ Not excluded from reciprocal tariffs are:

✅ Excluded from reciprocal tariffs are:

• Chemical intermediates without specific orientation (not mentioned above)

• Industrial preparations with no assigned detailed HS headings in the nomenclature (not mentioned above)

In Brief about Heading 3824:

This heading does not include products that are specifically included in other headings of chapter 38 or other chapters. Heading 3824 is a catch-all heading. Once a product can be described more clearly, it is no longer classified under this heading.

Not included in heading 3824, for example, are:

• Separate chemical elements or compounds, except for products of Section VI.

• Mixtures, as far as they are specifically covered in other headings of chapter 38 or in other chapters of the customs tariff.

• Goods of chapters 28 or 29 (except for products of Section VI).

• Organic solvents, even if used as cleaning agents, degreasers, adhesive removers, etc.

• Prepared additives for mineral oils or fuels (Pos. 3811)

• Diluted or stabilized peroxides (Pos. 2847

• Unmixed additives for lubricants (Chapter 29).

• Cosmetics or personal care products of chapter 33.

• Soaps, detergents, or cleaning products (Pos. 3401 to 3402)

• Enzymes or enzymatic preparations (Pos. 3507)

• Food preparations of chapter 21.

• Photographic products of (Pos. 3707 or 3701)

• Reagents on carrier materials (e.g., test strips) (Pos. 3822)

• Biocides (Pos. 3808)

• Chemically modified polymers (Pos. 3901 to 3911)

• Fireworks or other pyrotechnic articles (Pos. 3604)

HS Heading 8541: Semiconductor Devices, Light Emitting Diodes (LED), Mounted or Fitted Piezoelectric Crystals

The explanatory notes to heading 8541 of the HS describe semiconductor devices such as diodes, transistors, and semiconductor-based transducers in more detail.

These components are based on the electrical properties of doped semiconductor materials like silicon or gallium arsenide.

Transistors are subdivided into, among others, bipolar transistors, MOSFETs, and IGBTs.

Semiconductor-based transducers convert physical or chemical signals into electrical signals and include sensors, actuators, resonators, and oscillators. The doping of the materials influences whether they are n- or p-type semiconductors.

Light-sensitive devices such as photodiodes or solar cells react to light and are also included under this heading.

Light-emitting diodes (LED) and their assemblies are used to produce visible or infrared light.

Fitted piezoelectric crystals are included under this heading when they are mounted for electrical connection. Simple doped semiconductor materials, integrated circuits, and other electronic assemblies are not included. The power dissipation of transistors is also relevant for tariff classification.

❌ Not excluded from reciprocal tariffs are:

✅ Excluded from reciprocal tariffs are:

In Brief about Heading 8541:

This heading does not include products that are more than just a semiconductor device. The more complex the unit, the more likely another heading is applicable.

Not included in heading 8541, for example, are:

• Doped chemical elements (e.g., silicon, selenium) in drawn form or as wafers/sheets (Chap. 28 or Pos. 3818).

• Doped chemical compounds (e.g., CdSe, InAs) with additions such as germanium or iodine, in cylindrical or cut form (Pos. 3818).

• Doped crystals in wafer/sheet form, even if polished or epitaxially coated, if not selectively doped (Pos. 3818).

• Integrated electronic circuits (Pos. 8542; see below).

• Microassemblies such as molded modules or micromodules with interconnected components (generally Chap. 84, 85, or 90).

HS Heading 8542: Electronic Integrated Circuits (ICs)

Electronic integrated circuits of heading 8542 are defined by note 12 (b) to chapter 85.

They consist of closely arranged passive and active elements, considered as one unit.

Discrete components, on the other hand, have only a single active or passive electrical function. They are deemed essential and indivisible parts of an electronic system.

Electronic components with multiple electrical functions are not considered discrete components. The concept of active and passive components is guided by the explanatory notes to heading 8534.

Electronic integrated circuits also include memory devices such as DRAMs and EEPROMS. Further examples are microcontrollers, logic circuits, and interface chips. They fulfil multiple functions within a single unit.

❌ Not excluded from reciprocal tariffs are:

• Equipped circuit boards with additional components (see 8473, 8537, or 9030)

• End devices with integrated chips but primarily other main functions (e.g., sensors)

✅ Excluded from reciprocal tariffs are:

• ICs in casings

• Microchips without carrier boards

In Brief about Heading 8542:

This heading does not cover electronic assemblies considered functional units. Only the bare "brain" of the system is properly classified here.

Not included in heading 8542, for example, are:

• Circuitries with only passive components are not included under this heading.

• Excluded are non-volatile semiconductor memories, “Smart Cards” as well as other sound or data carriers (see Position 8523 and note 6 to this chapter).

Assemblies are not classified under this heading if they:

• consist of discrete elements on a carrier,

• contain microcircuits with additional components such as diodes or resistors,

• are merely combinations of discrete components or microcircuits (except multichip circuits),

• combine integrated circuits with unmentioned elements such as transformers or magnets.

Such assemblies are classified as follows:

• If they form a complete machine or device: under the appropriate machine/device heading of chapters 84, 85, or 90.

• Others: according to the rules for machine parts (e.g., Section XVI, notes 2 (b) and 2 (c)).

Example: Memory modules such as SIMMs and DIMMs are classified under Section XVI.

HS Heading 3002: Human and Veterinary Substances (Blood, Antisera, Immunological Products, etc.)

Heading 3002 includes blood and blood components of human or animal origin, provided they are prepared for therapeutic, prophylactic, or diagnostic purposes.

This includes, among other things, antisera, immunoglobulins, modified blood fractions, and products such as thrombin, fibrinogen, and recombinant hemoglobins. Immunological products like monoclonal antibodies, antibody fragments or conjugates, and interleukins and interferons are also included.

Vaccines, including mRNA and DNA-based variants, fall under this category, along with toxins, toxoids, and antitoxins. Cultures of microorganisms (except yeasts), viruses, bacteriophages, and antiviral agents are included unless specifically excluded.

Cell therapy products, such as stem cells or immunological cell preparations, are included if substantially manipulated. Exclusions include "physiological sera" based on chemicals and blood albumin prepared for non-medical purposes.

The distinction with headings like 3502 (albumins and their derivatives) or 3504 (peptones and derivatives; other protein substances and derivatives, n.e.c.; skin powder, even chrome-tanned) is based on purpose and biotechnological properties.

❌ Not excluded from reciprocal tariffs are:

• Blood collection kits with medical accessories

• Cosmetic plasma products

• Diagnostics of Position 3822

✅ Excluded from reciprocal tariffs are:

• Purified immunological products

• Antisera, vaccines

• Diagnostics of microbial origin, unless covered by Position 3822

In Brief about Heading 3002:

This heading does not include cosmetic products unless intended for therapeutic use. Origin (biological), form (e.g., lyophilizate), and medical purpose must be clear.

Not included in heading 3002, for example, are:

HS Heading 3004: Medicinal Products in Dosage Form

Medicinal products of heading 3004 are mixed or unmixed products provided they are dosed or made up for retail sale for therapeutic or prophylactic purposes.

These include, for example, tablets, capsules, patches, or solutions with corresponding application instructions.

Crucial is whether the presentation and amount of active ingredient suggest a therapeutic or preventive effect. Even foods with medicinal additives only fall under this heading if they have a clear medicinal character.

This heading deliberately excludes other classifications like 3003 (not dosed), 2106 (food preparations), or 3307 (cosmetics).

Court judgments and regulations emphasize classification based on active ingredient content, application, and presentation. Veterinary medicines with therapeutic functions can also be classified here. The application of the General Agreement 1 and 6 is decisive for classification in all examples.

❌ Not excluded from reciprocal tariffs are:

• Dietary supplements without therapeutic effects

• Cosmetics with pharmaceutical active ingredients

• Combined sets (e.g., with medical devices)

✅ Excluded from reciprocal tariffs are:

• Approved medicinal products

• Active ingredient combinations with a clear indication for therapy

In Brief about Heading 3004:

This heading does not include cosmetic products, even if they contain medicinal active ingredients. Approval, dosage form, and indication are crucial for classification. Marketing alone is not sufficient.

Not included in heading 3004, for example, are:

• dietary supplements, food preparations, certain herbal teas, and products where the medicinal purpose is absent or not proven.

• Medicinal products that are not dosed or not made up for retail sale (Pos. 3003)

• Unmixed substances of Positions 2843 to 2846 and 2852, even if dosed or featured

• Food and drinks, even with medicinal additives, only providing nutrients or flavoring functions

• Plant mixtures or preparations for teas advertised for health benefits (Pos. 2106)

• Dietary supplements for general health maintenance, performance improvement, or prevention of nutrient deficiency (mostly belong to Position 2106 or chapter 22)

• Products with nicotine for quitting tobacco such as gum or patches (Pos. 2404)

• Snake or bee venom, unless packaged as medicinal (Pos. 3001)

• Products of Positions 3002, 3005, or 3006, regardless of their packaging

• Distilled aromatic waters, essential oils, and their preparations (Pos. 3303 to 3307)

• Medicinal soaps (Pos. 3401)

• Disinfectants, insecticides, etc., when not presented as medicines for internal or external use (Pos. 3808)

• Lozenges or cough sweets with aroma-containing medicinal substances, primarily made of sugar (Pos. 1704)

• Bone cement, e.g., with hardener and activator for fixation of prosthetics (Pos. 3006)

HS Heading 4911: Other Printed Matter, n.e.c.

Heading 4911 covers all printed matter (including photographs) not already covered by other headings in Chapter 49.

This includes advertising prints, program booklets, calendar backings, schematic maps, teaching charts, tickets, microreproductions, certain grid sheets, and decorative stickers.

Not included are printed smart cards, dials, playing cards, decorative mirrors, or illuminated signs, which fall into other chapters.

Notes and explanatory notes to subheadings specify, for example, the distinction between promotional materials, color samples, and combined products with textile elements.

Classification often depends on General Rules 1, 3b, and 6, where the predominant character (e.g., through print or advertising purpose) is crucial.

Sample cards and finished goods with print generally do not fall under 4911 if the textile or functional aspect predominates.

Self-adhesive, decorative stickers, or promotional items with a low use value of the content remain classifiable under 4911.

The distinction to Chapter 48 or chapters with finished goods is based on purpose and the relevance of the print.

❌ Not excluded from reciprocal tariffs are:

• Printed packaging (possibly Chap. 48 or 39)

• Pictures, designs, and photographs (4911 91)

✅ Excluded from reciprocal tariffs are:

• Advertising material for trade, commercial catalogs, and the like (4911 9980)

In Brief about Heading 4911:

This heading does not include printed items with an inherent use value beyond information. Once a printed matter conveys more than just information (e.g., as packaging), other headings apply.

Not included in heading 4911, for example, are:

• positive photographic plates and films, exposed and developed (Pos. 3705)

• Products of Pos. 3918, 3919, 4814, and 4821, as well as printed paper products of Chapter 48 with subordinate print

• Letters, digits, signs, etc., for shops or shop windows of ceramic, glass, or base metal (Pos. 6914, 7020, 8310, or for illuminated signs 9405)

• Decorative mirrors with or without frames, if they carry printed images on the visible side

• Printed smart cards, including contactless cards or labels according to note 5 b) to Chapter 85 (Pos. 8523)

• Printed dials, etc. for devices of chapters 90 or 91

• Toys of printed paper, such as cut-out sheets for children, as well as playing cards and similar printed items (Chap. 95)

• Original etchings, prints, and lithographs (Pos. 9702), handcrafted by the artist without mechanical/photomechanical reproduction

• Stickers or flags, whose main character is not determined by the print, but e.g., by the material or function (e.g., finished textile goods according to CN code 6307 90 98)

• Printed products with magnetic strips, if their primary purpose is not determined by the print (e.g., Subheading 8523 21 00)

Conclusion

The mere listing of an HS heading or HTS subheading in Annex II does not guarantee exemption from the new reciprocal tariffs. What is crucial is whether the specific product is tariffed correctly under this heading – taking into account the HS notes, explanatory notes, and, if applicable, the GRI (General Rules for Interpretation).

For many companies, a fine customs tariff examination is worthwhile. Annex II should not be seen as a carte blanche but as a starting point for a thorough classification review.