New EO authorizes additional ad valorem duties (e.g., 25%) on U.S. imports from countries that buy goods or services from Iran, effective Feb. 7, 2026.

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

1. What changed

• A new Executive Order (EO), signed February 6, 2026 and effective 12:01 a.m. EST on February 7, 2026, establishes a new tariff-based mechanism targeting countries that purchase, import, or otherwise acquire goods or services from Iran.
• The EO authorizes the imposition of an additional ad valorem duty on U.S. imports that are products of such countries. The EO cites an example rate of 25%, but the actual rate(s) and scope will be determined case-by-case.
• This is an import-side sanctions tool layered on top of existing Iran sanctions, using tariff authority under IEEPA and section 604 of the Trade Act of 1974.

2. Affected products and scope

• The EO does not yet specify particular HTS codes or product categories. Instead, it creates a framework under which:
• Any "goods imported into the United States that are products of" a foreign country found to purchase/import/acquire Iranian goods or services may be subject to additional ad valorem duties.
• The scope could be broad (all products of that country) or targeted (selected sectors or HTS ranges), to be defined in subsequent actions.
• Key definitions:
• "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/acquisitions 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 defined broadly to include Iranian territory, marine areas, the Central Bank of Iran, the IRGC, and entities owned/controlled by or acting for the Government of Iran.
• At this stage, no specific HTS subheadings, Chapter 99 provisions, or product lists are provided. These will likely be implemented via Federal Register notices and/or amendments to the HTSUS.

3. Rate changes

• The EO authorizes an "additional ad valorem rate of duty" on covered imports.
• It provides an example rate of 25%, but:
• The actual rate(s) may differ by country and/or product.
• The rate may be set, increased, decreased, or removed over time based on Presidential decisions informed by agency recommendations.
• This additional duty would be in addition to:
• Normal Column 1 MFN rates;
• Any existing special rates (e.g., FTA, GSP if applicable);
• Any existing trade remedies (Section 232, 301, 201, ADD/CVD) or other Chapter 99 duties.
• No specific numerical rate changes are yet in force for any particular country or HTS line; the EO only creates the legal authority and process.

4. Process and decision-making

• Step 1 – Commerce finding:
• The Secretary of Commerce, in consultation with the Secretary of State and others as deemed appropriate, will determine whether a foreign country, after the EO’s effective date, directly or indirectly purchases, imports, or otherwise acquires any goods or services from Iran.
• Once Commerce makes an affirmative finding, Commerce must inform the Secretary of State, including relevant information supporting the finding.
• Step 2 – State recommendation on tariffs:
• 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 that country.
• If State recommends imposing additional duties, State informs the President of the recommendation, and Commerce provides its finding.
• Step 3 – Presidential decision:
• The President will decide whether and to what extent to impose additional ad valorem duties on products of the country in question.
• The EO anticipates that implementation will occur through regulations, guidance, and Federal Register notices, potentially including temporary suspension or amendment of existing regulations.
• Modification authority:
• The President may modify the EO or actions taken under it based on new information, retaliation by affected countries, or positive steps by Iran or affected countries to address the national emergency.

5. Dates and timing

• EO signing date: February 6, 2026.
• Effective date: 12:01 a.m. Eastern Standard Time on February 7, 2026.
• There is no sunset/expiration date specified for the EO.
• The additional duties will apply only after:
• Commerce issues an affirmative finding for a specific country; and
• The President, following State’s recommendation, formally imposes additional duties (likely via a subsequent Presidential proclamation or notice).
• Importers should expect a lag between the EO’s effective date and any concrete tariff measures, but should prepare for potentially rapid implementation once a country is identified.

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

6.1 Immediate monitoring and risk assessment

• Monitor for follow-on actions:
• Federal Register notices from the White House, USTR, Commerce (BIS/ITA), State, Treasury (OFAC), and CBP.
• Any Presidential proclamations or notices specifying:
• Named countries subject to the new duties;
• The additional ad valorem rate(s) (e.g., 25% or other);
• The product scope (all products of that country or specific HTS ranges);
• Any new Chapter 99 HTS provisions to report the additional duty.
• Conduct a country exposure review:
• Identify all current and planned imports by country of origin.
• Flag countries with known or suspected trade ties to Iran, especially in energy, petrochemicals, metals, shipping, and dual-use sectors.
• Prioritize high-value and high-volume imports from such countries for contingency planning.

6.2 Classification and systems readiness

• Prepare for potential new Chapter 99 provisions:
• Ensure ERP and broker systems can accommodate new Chapter 99 numbers that may be created to collect the additional duties.
• Establish internal procedures to update HTS and duty tables quickly upon issuance of implementing notices.
• Validate country-of-origin determinations:
• Confirm that origin determinations are robust and documented, especially for complex supply chains involving multiple countries.
• Be prepared to distinguish between:
• Goods that are products of a country targeted under this EO; and
• Goods merely shipped through or invoiced by that country but originating elsewhere.

6.3 Contracting, pricing, and sourcing

• Review contracts with suppliers in potentially affected countries:
• Assess who bears responsibility for additional U.S. duties (Incoterms, duty clauses, price adjustment mechanisms).
• Consider adding clauses addressing new tariffs arising from sanctions-related measures.
• Update landed cost models:
• Run scenarios assuming an additional 25% ad valorem duty on imports from high-risk countries.
• Evaluate alternative sourcing options where exposure is material.

6.4 Compliance with Iran-related definitions

• Align with OFAC definitions and restrictions:
• Ensure internal sanctions compliance programs already track and restrict dealings with "goods or services from Iran" as defined in 31 C.F.R. 560.306.
• Understand that "indirect" dealings via intermediaries or third countries may be considered Iranian-origin for purposes of Commerce’s findings.
• Supply chain due diligence:
• For suppliers in countries with known Iran ties, request written assurances and documentation regarding non-use of Iranian-origin inputs or services where feasible.
• Consider enhanced due diligence for sectors with high Iran exposure (oil and gas, petrochemicals, metals, shipping, aviation, certain industrial machinery).

6.5 Broker and filing instructions

• Coordinate with customs brokers:
• Instruct brokers to promptly implement any new Chapter 99 codes and additional duty lines once published.
• Ensure brokers are prepared to distinguish entries subject to the new duties based on country of origin and any product-specific scope.
• Entry review and post-summary corrections:
• Once implementing measures are issued, review entries around the effective date to ensure correct application of new duties.
• Be prepared to file post-summary corrections or protests if CBP guidance clarifies scope after initial implementation.

7. Enforcement and future developments

• Monitoring and recommendations:
• State will monitor the national emergency context and recommend additional actions if current measures are insufficient.
• Commerce will continuously monitor whether foreign countries directly or indirectly acquire Iranian goods or services, including after an initial finding.
• Retaliation and escalation:
• The EO explicitly contemplates that if a foreign country retaliates against the United States in response to these tariffs, the President may modify the order or actions taken under it, potentially expanding or adjusting tariffs.
• Potential for broad application:
• Because the EO is not limited to specific sectors or products, there is potential for wide-ranging tariff measures against any country with significant Iran trade, depending on policy decisions.

8. Practical next steps checklist

• Compliance/Legal:
• Assign a point person to track all follow-on actions under this EO.
• Integrate this EO into your sanctions and trade compliance risk register.
• Trade/Customs:
• Map import exposure by country of origin and run 25% duty impact scenarios.
• Prepare systems and brokers for rapid implementation of new Chapter 99 codes.
• Procurement/Supply Chain:
• Identify critical suppliers in countries with known or suspected Iran ties.
• Develop contingency sourcing plans for high-risk categories.
• Finance/Tax:
• Update budgeting and forecasting models to account for potential additional duties.

9. References and source documents

• Executive Order: "Addressing Threats to the United States by the Government of Iran" (February 6, 2026), The White House.
• Official text (when posted): https://www.whitehouse.gov
• Iran Transactions and Sanctions Regulations (ITSR):
• 31 C.F.R. Part 560, including § 560.306 (definition of "goods or services from Iran"): https://ofac.treasury.gov
• Federal Register (for implementing notices, HTS/Chapter 99 changes, and tariff proclamations):
• https://www.federalregister.gov
• Harmonized Tariff Schedule of the United States (for future updates reflecting any new Chapter 99 provisions or duty lines):
• https://hts.usitc.gov

Note: As of the EO’s effective date, no specific countries, HTS codes, or concrete additional duty rates have been formally imposed. The EO establishes the legal framework; importers must closely monitor subsequent Presidential and agency actions to determine actual tariff obligations.