New EO authorizes additional ad valorem duties (e.g., 25%) on U.S. imports from countries that buy goods or services from Iran.

REGULATORY BRIEFING – EXECUTIVE ORDER: ADDRESSING THREATS TO THE UNITED STATES BY THE GOVERNMENT OF IRAN

1. What changed

• On February 6, 2026, the President issued an Executive Order (EO) titled “Addressing Threats to the United States by the Government of Iran.”
• Effective 12:01 a.m. EST on February 7, 2026, the EO authorizes the imposition of an additional ad valorem duty on U.S. imports of goods that are products of foreign countries that directly or indirectly purchase, import, or otherwise acquire goods or services from Iran.
• The EO cites authority under IEEPA, the National Emergencies Act, section 604 of the Trade Act of 1974 (19 U.S.C. 2483), and 3 U.S.C. 301, and is an additional measure under the long‑standing national emergency related to Iran.
• The EO does not itself set final duty rates or identify specific countries; it creates a framework under which such duties can be imposed after interagency findings and Presidential decision.

2. Affected products and scope

• Product scope: All goods imported into the United States that are “products of” a foreign country that is found to directly or indirectly purchase, import, or otherwise acquire any goods or services from Iran.
• This is country‑wide and not limited to specific sectors or HTS headings at this stage. In principle, any HTS chapter could be affected once a country is designated.
• “Goods or services from Iran” is to be construed consistent with 31 C.F.R. 560.306 and is limited to goods/services that U.S. persons are already prohibited from trading with respect to Iran.
• “Indirectly” includes purchases, imports, or other acquisitions of Iranian goods and services through intermediaries or third countries where the origin can reasonably be traced to Iran, as determined by the Secretary of Commerce.
• “Iran” and “Government of Iran” are broadly defined to include Iranian territory (including certain marine areas), the Government and its agencies/instrumentalities (including the Central Bank of Iran and IRGC), and persons owned or controlled by, or acting for/on behalf of, the Government of Iran.

At this time, no specific HTS codes are singled out; the measure is structured as an across‑the‑board additional duty on all products of any designated country.

3. Rate changes

• The EO authorizes an “additional ad valorem rate of duty” on covered imports.
• It provides an example rate of 25 percent but does not fix 25% as the mandatory rate. The actual rate(s) will be determined case‑by‑case.
• Old rate: Existing MFN/column 1 or other applicable duty rates under the HTSUS remain unchanged.
• New rate: For any designated country, an additional ad valorem duty (potentially 25% or another percentage) will be layered on top of the existing HTSUS rate.
• The precise rate, coverage, and any exclusions will be set after:
• A finding by the Secretary of Commerce that a foreign country directly or indirectly acquires goods or services from Iran; and
• A determination and recommendation by the Secretary of State (in consultation with Treasury, Commerce, DHS, and USTR), followed by Presidential decision.

Because no implementing notice has yet been issued, there are currently no concrete numerical rate changes in effect beyond the authorization itself.

4. Process and implementing mechanism

• Step 1 – Commerce finding (Section 2(b)):
• The Secretary of Commerce, in consultation with the Secretary of State and other senior officials as deemed appropriate, will determine whether a foreign country directly or indirectly purchases, imports, or otherwise acquires any goods or services from Iran after the EO’s effective date.
• Upon an affirmative finding, Commerce will inform the Secretary of State and provide relevant information.
• Commerce is authorized to issue rules, regulations, and guidance and to make any other determinations/actions necessary to implement the EO.

• Step 2 – State determination and recommendation (Section 2(c)):
• After Commerce’s affirmative finding, the Secretary of State, in consultation with Treasury, Commerce, DHS, and USTR, will determine whether and to what extent an additional ad valorem duty should be imposed on goods that are products of the identified foreign country.
• If State determines that additional duties should be imposed, State will recommend this to the President, and Commerce will provide its related finding.
• The President will then decide whether and to what extent to impose the additional ad valorem duty on products of that country.
• State may issue rules, regulations, and guidance to implement the EO.

• Step 3 – Presidential action:
• The President may impose the additional ad valorem duty and may later modify the order or actions taken under it based on new information, retaliation by foreign countries, or changes in Iran’s or affected countries’ behavior.

• Implementation tools:
• Section 5 directs State, Commerce, and USTR to take all actions necessary to implement the EO, including temporary suspension or amendment of regulations, Federal Register notices, and adoption of rules, regulations, or guidance.
• Other agencies must take appropriate measures within their authority and may redelegate as needed.
• In practice, implementation is likely to involve:
• Federal Register notices specifying affected countries, effective dates, and additional duty rates;
• Possible creation of new Chapter 99 HTSUS provisions or other coding instructions for CBP entry processing;
• CBP guidance (CSMS messages, Cargo Systems Messaging Service) on entry filing requirements.

5. Dates and timing

• EO signing date: February 6, 2026.
• Effective date of the EO: 12:01 a.m. Eastern Standard Time on February 7, 2026.
• The EO itself does not specify:
• The date on which any particular country will be designated;
• The date on which any specific additional duty rate will begin to apply.
• Those dates will be set in subsequent Presidential or agency actions (likely via Federal Register notices) following Commerce and State determinations.
• The EO is open‑ended; there is no stated expiration date. It remains in effect until modified, revoked, or until the underlying national emergency is terminated.

6. Required actions for importers, brokers, and compliance teams

Immediate (monitoring and risk assessment)

• Recognize that this EO creates a new potential additional duty exposure on imports from any foreign country that engages in direct or indirect trade in prohibited Iranian goods or services.
• There is no immediate change to HTS duty rates or entry procedures until specific countries and rates are announced. However, companies should:
• Monitor Federal Register notices from the Departments of Commerce, State, Treasury, and DHS/CBP, as well as USTR announcements, for:
• Lists of affected countries;
• Specific additional duty rates (e.g., 25% or other);
• Effective dates and any phase‑in or grace periods;
• Any Chapter 99 or special program indicators required on entries.
• Monitor CBP Cargo Systems Messaging Service (CSMS) for operational guidance on entry filing and collection of the new duties.

Supply chain and sourcing review

• Identify key sourcing countries for your U.S. imports and assess their known or likely trade relationships with Iran, especially in sectors historically linked to Iranian trade (energy, petrochemicals, metals, shipping, etc.).
• For high‑risk sourcing countries, begin contingency planning:
• Evaluate alternative suppliers in countries less likely to be designated under this EO.
• Assess the financial impact of a potential additional 25% (or similar) duty on imports from those countries.
• Consider contract clauses addressing tariff changes and cost sharing with suppliers and customers.

Customs and classification readiness

• Prepare for potential HTSUS implementation changes:
• Be ready to add new Chapter 99 or other special tariff numbers to entries once CBP publishes instructions.
• Ensure your broker and internal systems can handle additional ad valorem duties layered on top of existing rates.
• Review your classification and country‑of‑origin determinations to ensure accuracy, as the measure applies to “products of” designated countries. Incorrect origin declarations could lead to underpayment of duties and penalties.

Sanctions and origin tracing controls

• Strengthen controls to detect and prevent indirect sourcing of Iranian goods or services through third countries, as the EO explicitly covers indirect acquisitions where origin can reasonably be traced to Iran.
• Align trade compliance and sanctions compliance teams:
• Use existing OFAC/Iran sanctions screening and due diligence processes to identify suppliers or intermediaries with Iran exposure.
• Enhance supplier questionnaires and certifications to address:
• Direct or indirect purchases of Iranian-origin goods or services;
• Use of Iranian inputs in manufacturing or services.

Contracting and pricing

• For long‑term contracts involving imports from potentially affected countries, consider:
• Including tariff‑change clauses allowing price adjustments or renegotiation if additional duties are imposed under this EO.
• Evaluating whether to structure contracts on a delivered‑duty‑paid (DDP) or other basis that allocates tariff risk clearly.

Internal governance and communication

• Brief senior management, procurement, and finance on the potential for new country‑wide additional duties tied to Iran‑related trade.
• Establish an internal watchlist of countries with known or suspected Iranian trade ties and prioritize monitoring for those jurisdictions.
• Coordinate with external customs brokers and trade counsel to stay informed on any designations and implementation details.

7. Anticipated implementation details (what to watch for)

• Federal Register notices may:
• Identify specific countries determined by Commerce to directly or indirectly acquire goods or services from Iran.
• Specify the additional ad valorem duty rate (e.g., 25% or another percentage) applicable to products of those countries.
• Provide effective dates and any transition rules (e.g., treatment of goods exported before a certain date).
• Establish new HTSUS Chapter 99 provisions or other coding requirements for CBP entry.

• CBP guidance may:
• Clarify entry filing requirements, including any new tariff numbers, special indicators, or flags in ACE.
• Address treatment of goods in transit, bonded warehouses, FTZs, and duty drawback.
• Provide instructions on post‑summary corrections and protests related to the new duties.

8. Modification and retaliation considerations

• The EO explicitly allows the President to modify the order or actions taken under it if:
• New information or recommendations from senior officials warrant changes;
• A foreign country retaliates against the United States in response to this EO or actions taken under it;
• Iran or an affected foreign country takes significant steps to address the national emergency and align with U.S. national security, foreign policy, and economic objectives.
• Importers should be aware that:
• Duty rates and country coverage may change over time (increases, decreases, suspensions, or removals).
• There may be dynamic escalation or de‑escalation depending on geopolitical developments.

9. References and source documents

• Executive Order: “Addressing Threats to the United States by the Government of Iran,” dated February 6, 2026, effective February 7, 2026.
• White House EO page (check for official PDF once posted):

https://www.whitehouse.gov/presidential-actions/

• Related Iran sanctions framework (for definition cross‑reference):
• 31 C.F.R. 560.306 – Definition of “Iranian-origin goods or services” (Iranian Transactions and Sanctions Regulations):

https://www.ecfr.gov/current/title-31/subtitle-B/chapter-V/part-560

• Federal Register (for forthcoming implementation notices by Commerce, State, Treasury, DHS/CBP, and USTR):
• https://www.federalregister.gov
• CBP Cargo Systems Messaging Service (for operational entry guidance):
• https://www.cbp.gov/trade/automated/cargo-systems-messaging-service

Action summary for trade compliance teams

• No immediate HTS or duty rate changes are in force until specific countries and rates are designated.
• Begin monitoring for implementing notices and prepare for potential additional ad valorem duties (possibly around 25%) on imports from countries with Iran trade ties.
• Conduct supply chain risk assessments, reinforce sanctions/origin controls, and prepare systems and contracts to accommodate rapid imposition of new duties once details are published.