On Sept. 5, President Donald Trump passed a new executive order taking a range of actions regarding the tariff policies. The changes include the addition of Annex III, which contains commodities that may be exempt from the reciprocal tariffs.
According to the American Herbal Products Association (AHPA), the herbal commodities in Annex III include those “that cannot be grown, mined, or naturally produced in the United States or grown, mined, or naturally produced in sufficient quantities in the United States to satisfy consumer demand.”
The commodities include various herbs and other ingredients used to manufacture dietary supplements, such as cinnamon, ginger, green tea, gum arabic, single cell microorganisms, dead (excluding yeasts), turmeric and resinolds (including boswellia).
AHPA acknowledged there are three critical considerations when viewing the Annex III regulations.
First, the listed commodities are not exempt but may be subject to a 0 percent reciprocal tariff under certain circumstances and for some countries, dependent on final trade agreements. Any preexisting tariff rates still apply when applicable.
Second, many commodity codes listed in Annex III are subject to scope regulations. The Harmonized Tariff Schedule (HTS) contains a large “catchall” category that includes “herbal teas and herbal infusions comprising mixed herbs” and “acai preparations for the manufacture of beverages.” Several other herbs are included as part of commodity headings that are otherwise restricted such as boswellia and psyllium seed husk.
Third, Annex III also includes various vitamins and other commodities in Chapter 29 of the HTS, which are exempt from reciprocal tariffs because they are listed in Annex II and are “subject to ongoing investigations which may result in import controls under a separate authority.” However, these overlapping entries are generally subject to limitations and include “only non-patented articles for use in pharmaceutical applications.”
The executive order also modifies the Annex II regulations to add additional commodity codes “not generally of interest to the dietary supplement trade.” AHPA is also preparing a comparison document on the herbal commodities included in Annex III and applicable limitations. Both documents will be available on the AHPA website.
“The inclusion of these commodities in Annex III is a promising acknowledgment from the administration. We will redouble our efforts to ensure a greater range of unavailable natural resources are included in final trade agreements,” said Robert Marriott, AHPA’s vice president of government & regulatory affairs.
For more information, visit www.ahpa.org.
