On February 24, 2026, the new 15% global import tariff under Section 122 took effect — but not every product is subject to it. The presidential proclamation includes a detailed Annex listing hundreds of Harmonized Tariff Schedule (HTS) codes that are excluded from the duty. Over 90% of these exemptions mirror the exclusions that existed under the previous reciprocal tariff program. This guide breaks down every exempt category so you know exactly what you are paying — and what you are not.

In This Guide

Understanding the Section 122 Exemption Framework

When the administration invoked Section 122 of the Trade Act of 1974 on February 22, 2026, the accompanying proclamation did not simply impose a blanket 15% duty on all imports. It included a detailed Annex of HTS codes that are explicitly excluded from the new tariff. This Annex is the exemption list — and understanding it is critical for every importer doing business in the United States.

Over 90% of the Section 122 exemptions mirror the exclusions that previously existed under the reciprocal tariff program. This is not a coincidence. The administration carried forward the same policy logic: products that are critical to U.S. manufacturing, national security, healthcare infrastructure, and food supply should not be burdened with additional import duties that would ultimately raise costs for American businesses and consumers.

The exemption framework covers seven major categories: agriculture and food products, pharmaceuticals and medical devices, semiconductors and electronic components, copper and copper products, critical minerals, lumber and forestry products, and energy products. Within each category, the exemptions are defined at the HTS code level — meaning that not every product within a broad category automatically qualifies. A fresh apple and a packaged apple pie may both be "agriculture," but only one is likely exempt.

Critical Warning: Being in an "exempt category" does not automatically mean your specific product qualifies. The exemptions are defined by precise HTS codes listed in the Section 122 Annex. You must verify your exact 10-digit HTS classification against the Annex. Claiming an exemption for a non-qualifying product can result in penalties, retroactive duty assessments, and CBP audits.

The rationale behind each exemption category follows a consistent theme: the United States depends on these imports for essential functions, and taxing them would cause more harm to the domestic economy than the tariff revenue would offset. Pharmaceuticals keep hospitals stocked. Semiconductors keep factories running. Energy products keep the lights on. The exemptions are not favors — they are economic necessities.

Complete Product Exemption List

The following table provides a high-level overview of every major exemption category under the Section 122 Annex. Detailed breakdowns of each category follow in the sections below.

Category Key Examples Why Exempt Notes
Agriculture & Food Certain agricultural commodities, fresh produce, grains Food security Not all processed foods exempt
Pharmaceuticals Active pharmaceutical ingredients, finished drugs, medical devices Healthcare supply chain Includes both branded and generic
Semiconductors Chips, wafers, integrated circuits, chip manufacturing equipment Domestic chip production (CHIPS Act alignment) Includes packaging/testing equipment
Copper Refined copper, copper alloys, copper wire Critical manufacturing input Extends to copper scrap
Critical Minerals Rare earth elements, lithium, cobalt, nickel, graphite National security & EV supply chain List may expand
Lumber Softwood lumber, plywood, certain timber products Construction industry protection Canadian lumber tariffs remain separate
Energy Products Crude oil, natural gas, refined petroleum, uranium Energy security Coal included in some classifications

Agriculture & Food Products

The agricultural exemptions under Section 122 are designed to protect the U.S. food supply chain from cost shocks that would ultimately be passed on to consumers. The United States imports approximately $200 billion in agricultural products annually, and many of these imports fill gaps that domestic production cannot cover — tropical fruits, off-season produce, specialty grains, and raw commodities that serve as inputs for American food manufacturers.

The exempt products in this category are concentrated in raw and minimally processed agricultural commodities. Fresh fruits and vegetables, unprocessed grains and cereals, live animals for breeding stock, raw sugar, coffee beans, cocoa beans, and certain oilseeds are among the products listed in the Annex. These are the building blocks of the American food system — products that cannot be easily substituted with domestic alternatives in the short term.

However, the exemption does not extend broadly to processed foods, packaged consumer goods, or value-added agricultural products. If your product has undergone significant manufacturing or processing — canned goods, frozen meals, packaged snacks, bottled beverages — it is unlikely to qualify. The line between "raw commodity" and "processed product" can be ambiguous, so importers in the food sector should work closely with their customs broker to confirm their specific HTS classification against the Annex. Products in HTS Chapters 1 through 24 are the most likely to contain exemptions, but the coverage is selective, not blanket.

Pharmaceuticals & Medical Devices

The pharmaceutical and medical device exemptions represent one of the most significant carve-outs in the Section 122 tariff. The United States imports a substantial share of its pharmaceutical supply chain — over 80% of active pharmaceutical ingredients (APIs) used in American-manufactured drugs come from overseas, primarily from India and China. Taxing these inputs would directly increase the cost of prescription medications, hospital supplies, and medical treatments.

The Annex exempts a broad range of pharmaceutical products: active pharmaceutical ingredients (APIs), finished pharmaceutical drugs (both branded and generic), biologics, vaccines, diagnostic reagents, and FDA-regulated medical devices. This includes Class I, II, and III medical devices — everything from surgical instruments and implantable devices to imaging equipment and diagnostic machines. The exemption also covers certain pharmaceutical intermediates and bulk drug substances used in domestic manufacturing.

What is not covered: cosmetics, dietary supplements, wellness products, veterinary products (with some exceptions), and non-FDA-regulated health products. The distinction is regulatory classification — if the FDA regulates your product as a drug or medical device, it is likely exempt. If it falls under cosmetic, supplement, or consumer product classifications, it is not. Importers should reference their product's FDA classification alongside the HTS code to determine eligibility. Products classified under HTS Chapters 29 (organic chemicals, including APIs) and 30 (pharmaceutical products) are primary candidates, along with medical devices in Chapter 90.

Semiconductors & Electronic Components

The semiconductor exemption is a direct extension of the CHIPS and Science Act strategy. The United States has invested over $52 billion in domestic semiconductor manufacturing through the CHIPS Act, and taxing the components and equipment needed to build and operate chip fabrication facilities would undermine that investment. The exemption ensures that the tariff does not create a cost barrier to the very industrial policy the government is pursuing.

Exempt products include semiconductor wafers (both processed and unprocessed), integrated circuits, microprocessors, memory chips, logic chips, power semiconductors, semiconductor manufacturing equipment, photolithography tools, etching and deposition machines, and chip packaging and testing equipment. The coverage extends through the semiconductor supply chain — from raw silicon wafers to the specialized machinery used in fabrication. This is critical because most advanced semiconductor manufacturing equipment comes from the Netherlands (ASML), Japan (Tokyo Electron), and the United States itself, and the supply chain is deeply global.

The exemption does not extend to finished consumer electronics that contain semiconductors. A semiconductor wafer is exempt; a finished laptop or smartphone is not. The distinction is between the component and the end product. Importers of electronic components should verify their products at the 10-digit HTS level, as the coverage is specific. Products classified under HTS headings 8541 (semiconductor devices) and 8542 (electronic integrated circuits) are the core exempt categories, along with specific manufacturing equipment codes in Chapter 84.

Copper & Critical Minerals

Copper occupies a unique position in the U.S. industrial economy. It is essential to electrical wiring, construction, electronics, electric vehicle manufacturing, renewable energy systems, and telecommunications infrastructure. The United States is a net importer of copper, and domestic mining and refining capacity cannot meet current demand — let alone the surging demand driven by electrification and green energy buildout.

The Section 122 Annex exempts refined copper cathodes, copper alloys (including brass and bronze), copper wire and cable, copper tubes and pipes, copper foil, and copper scrap. The inclusion of copper scrap is notable — the U.S. is both an importer and exporter of copper scrap, and the recycling supply chain depends on tariff-free movement of this material. Products classified under HTS Chapter 74 (copper and articles thereof) form the core of this exemption.

The critical minerals exemption extends beyond copper to include rare earth elements, lithium, cobalt, nickel, graphite, manganese, vanadium, and other minerals deemed essential to national security and the electric vehicle supply chain. The United States currently imports over 80% of its critical mineral needs, primarily from China, Australia, Chile, and the Democratic Republic of Congo. The exemption list for critical minerals aligns closely with the Department of Energy's critical minerals strategy and may expand as additional minerals are added to the federal critical minerals list. Products in HTS Chapters 26 (ores), 28 (inorganic chemicals), and 81 (other base metals) are the primary categories to check.

Lumber & Forestry Products

The lumber and forestry exemption is driven by housing policy. The United States faces a housing shortage estimated at 4 to 7 million units, and lumber is the single largest material input in residential construction. Imposing a 15% tariff on imported lumber would directly increase the cost of new home construction at a time when affordability is already at crisis levels.

Exempt products include softwood lumber (the primary structural wood used in home construction), plywood, oriented strand board (OSB), certain hardwood products, raw timber, wood chips, and pulpwood. These are the core materials that flow into the homebuilding and renovation supply chain. The Annex targets the products that builders and contractors purchase in volume — the framing lumber, sheathing, and structural panels that form the skeleton of American homes.

An important nuance: Canadian lumber is exempt from the Section 122 tariff, but it remains subject to separate softwood lumber duties that have been in place for years under antidumping and countervailing duty orders. The Section 122 exemption does not override those existing trade remedy duties. Canadian lumber importers should not assume that the exemption eliminates all tariff costs — only the new 15% Section 122 layer. Products in HTS Chapter 44 (wood and articles of wood) are the primary candidates, though coverage is selective and not all wood products qualify.

Energy Products

Energy products receive among the broadest exemptions under Section 122, reflecting the simple reality that taxing energy imports would raise costs for every sector of the economy. The United States, despite being a net energy exporter for certain fuels, still imports significant volumes of crude oil, refined petroleum products, natural gas, and specialized energy commodities. A 15% tariff on these imports would cascade through every supply chain that depends on fuel, power, and petrochemical feedstocks.

The Annex exempts crude oil, refined petroleum products (gasoline, diesel, jet fuel, heating oil), natural gas (both pipeline and LNG), uranium and nuclear fuel elements, and coal under certain classifications. The exemption also covers certain petrochemical feedstocks — the raw materials used to manufacture plastics, synthetic fibers, fertilizers, and pharmaceutical intermediates. These products fall primarily under HTS Chapter 27 (mineral fuels, oils, and products of their distillation).

The energy exemption is arguably the least controversial category in the Annex. Virtually no policy analyst, regardless of political orientation, advocates for taxing energy imports given the direct and immediate impact on consumer prices and industrial costs. The exemption ensures that the Section 122 tariff achieves its trade-deficit reduction goal without triggering an energy price shock that would undermine the broader economy.

How to Verify If Your Products Are Exempt

Knowing that exemptions exist is not enough. You need to confirm whether your specific products qualify. Here is the five-step process every importer should follow:

1

Identify Your Exact HTS Code (10-Digit Level)

The Section 122 exemptions are defined at the HTS subheading and statistical suffix level. A product classified at the 4-digit or 6-digit level may appear to be in an exempt category, but only specific 10-digit codes are listed in the Annex. Pull your entry documents and confirm the exact classification being used for your imports. If you are unsure of your product's correct HTS code, this is the time to get a definitive classification — not after CBP issues an assessment.

2

Cross-Reference with the Section 122 Annex Exclusion List

The Annex to the presidential proclamation is the authoritative document. It lists every HTS code that is excluded from the 15% duty. The Annex is published in the Federal Register and is available through CBP's website and trade publications. Search for your exact HTS code in the Annex. If it appears, your product is exempt. If it does not, the 15% tariff applies regardless of the broader category your product falls into.

3

Consult with Your Customs Broker for Classification Confirmation

Your customs broker is your first line of defense against misclassification. Provide them with your product specifications, composition, end use, and current HTS code. Ask them to confirm whether your classification is correct and whether it appears on the Section 122 Annex. A good broker will also flag any products that are borderline — items that could arguably fall under an exempt code or a non-exempt code depending on interpretation.

4

File for a Classification Ruling If Your Product Is Borderline

If there is any ambiguity about whether your product qualifies, file a binding ruling request with CBP. A binding ruling provides a legally defensible classification that CBP must honor at the port of entry. The process takes 30 to 120 days depending on complexity, but it eliminates the risk of a retroactive reclassification and penalty. For high-volume imports where the 15% duty represents significant cost exposure, the ruling is worth the wait.

5

Document Everything — Maintain Exemption Compliance Records

Keep a file for every product you claim as exempt. Include the HTS code, the Annex reference, your broker's classification confirmation, any CBP ruling letters, product specifications, and supplier documentation. If CBP audits your imports — and audit rates increase during major tariff changes — your documentation is what stands between a clean bill and a penalty assessment. Treat exemption compliance the same way you treat USMCA origin documentation: meticulously.

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Key Number: Over 90% of Section 122 exemptions mirror the previous reciprocal tariff exclusion list. If your product was excluded from the reciprocal tariffs, there is a strong probability it is also excluded under Section 122. But verify — do not assume.

How a 3PL Helps You Manage Mixed-Tariff Inventory

For importers who bring in both exempt and non-exempt products, tariff management adds a layer of operational complexity that goes beyond customs paperwork. Your warehouse operations, inventory tracking, and fulfillment processes need to account for the different duty status of each product. This is where a capable 3PL partner becomes essential.

Inventory Segregation

A 3PL can physically and systematically separate exempt and non-exempt goods within the warehouse. This segregation ensures accurate duty tracking, prevents commingling errors that could trigger CBP compliance issues, and gives you clear visibility into the landed cost of each product line. When audit time comes, you have clean inventory records showing exactly which goods entered under which tariff treatment.

Customs Documentation

Your 3PL coordinates directly with customs brokers to ensure that every shipment is classified correctly at the point of entry. For mixed shipments containing both exempt and non-exempt products, the 3PL ensures that entry documents properly break out the exemption claims line by line. This prevents overpayment on exempt goods and ensures full compliance on non-exempt goods — avoiding both wasted money and penalty exposure.

Foreign Trade Zone Utilization

For non-exempt goods that are subject to the full 15% duty, a 3PL with access to a Foreign Trade Zone (FTZ) can defer duty payments until the goods enter domestic commerce. This is especially valuable during the 150-day uncertainty window — if the Section 122 tariff expires or is reduced, goods held in an FTZ would benefit from the lower rate at the time of entry. FTZ storage effectively gives you optionality on your tariff exposure.

Cost Optimization

By routing exempt goods through standard entry channels and non-exempt goods through FTZ or bonded warehouse channels, a 3PL helps you avoid duty overpayment. The operational overhead of managing two tariff streams is handled by the 3PL's warehouse management system and logistics team — you get a single invoice that reflects optimized duty treatment for every SKU in your catalog.

Not Sure If Your Products Are Exempt?

Miami Alliance 3PL works with customs brokers daily to classify and clear goods under the new tariff framework. Get a free consultation to review your product mix and identify potential exemptions.

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Frequently Asked Questions

Are ALL agricultural products exempt from the 15% tariff?

No. The exemption covers certain agricultural commodities — primarily fresh produce, raw grains, and unprocessed staple foods critical to the U.S. food supply. Processed foods, packaged consumer goods, and specialty agricultural products generally do not qualify. The exemptions are defined by specific HTS codes in the Section 122 Annex, and importers must verify their exact classification. For example, fresh bananas (HTS 0803) are likely exempt, while banana-flavored snack bars are not. Always check at the 10-digit HTS level.

Do pharmaceutical exemptions include cosmetics or supplements?

Generally no. The pharmaceutical exemption is targeted at active pharmaceutical ingredients (APIs), finished pharmaceutical drugs, and FDA-regulated medical devices. Cosmetics, dietary supplements, and wellness products are classified under different HTS codes and do not fall within the exemption. The distinction is regulatory: if the FDA regulates your product as a drug or medical device, it is likely covered. If it is classified as a cosmetic or dietary supplement, it is not. Some products that straddle categories — such as medical-grade skincare or prescription-strength supplements — may require a classification ruling to determine eligibility.

How do I know if my semiconductor product qualifies for exemption?

Check your HTS code against the Section 122 Annex. Most integrated circuits, semiconductor wafers, bare chips, and chip manufacturing equipment are covered under the exemption, which aligns with CHIPS Act priorities. The exemption extends to packaging and testing equipment used in semiconductor fabrication. However, finished consumer electronics that contain semiconductors — smartphones, laptops, televisions — do not qualify. The exemption applies to the component, not the end product. Consult your customs broker for a definitive classification, especially for specialty or hybrid electronic components.

Can exempt products still face other tariffs?

Yes. Exemption from the Section 122 15% global tariff does not override other existing tariff programs. Your products may still be subject to Section 301 tariffs (primarily on Chinese goods), Section 232 tariffs (on steel and aluminum), country-specific tariffs on Canada (35%) and Mexico (25%), antidumping and countervailing duties, and standard Most Favored Nation (MFN) tariff rates. Each tariff authority operates independently. A semiconductor wafer exempt from Section 122 may still face Section 301 duties if it originates from China. Always evaluate your total duty exposure across all applicable programs.

What happens if I claim an exemption incorrectly?

Incorrect exemption claims can result in significant penalties. CBP may assess the full 15% duty retroactively with interest from the original entry date, impose civil penalties for negligence or gross negligence (which can range from 2x to 4x the unpaid duty), and flag your importer account for enhanced scrutiny on all future entries. In cases of intentional misclassification, criminal fraud charges are possible. The best protection is thorough documentation: maintain your HTS classification basis, broker correspondence, CBP ruling letters, and product specifications in an organized compliance file for every exempt product you import.