{"id":85603,"date":"2026-04-15T15:24:00","date_gmt":"2026-04-15T13:24:00","guid":{"rendered":"https:\/\/www.lexxion.eu\/?post_type=dsi&#038;p=85603"},"modified":"2026-04-16T12:28:16","modified_gmt":"2026-04-16T10:28:16","slug":"dod-trump-tariffs-exception","status":"publish","type":"dsi","link":"https:\/\/www.lexxion.eu\/en\/defence-security-insider\/dod-trump-tariffs-exception\/","title":{"rendered":"The U.S. Defense Department\u2019s Exception to the Trump Tariffs | By Christopher R. Yukins"},"content":{"rendered":"<p><em>By <strong><a href=\"#Author\">Christopher R. Yukins<\/a>, <\/strong>Lynn David Research Professor, Government Procurement Law, George Washington University Law School<\/em><\/p>\n<p>&nbsp;<\/p>\n<p><strong>Executive Summary:<\/strong><\/p>\n<ul>\n<li>Although the Trump tariffs were largely struck down by the U.S. Supreme Court, tariffs remain a risk in the U.S. procurement market and is yet another indication of how &#8220;buy national&#8221; rhetoric is ramping up whether America First or Buy European<\/li>\n<li>U.S. Defense Department regulations include an explicit tariff exemption<\/li>\n<li>The Trump White House has criticized that sort of exemption, but it remains in place<\/li>\n<li>Congress and the Defense Department support the exemption so that tariffs do not weaken the Defense Department\u2019s warfighting capacity<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong>Table of Contents:<\/strong><\/p>\n<ol>\n<li><a href=\"#Introduction\">Introduction<\/a><\/li>\n<li><a href=\"#The Trump Tariffs\">The Trump Tariffs<\/a><\/li>\n<li><a href=\"#Defense Department Tariff Exception\">Defense Department Tariff Exception<\/a><\/li>\n<li><a href=\"#Guidance Regarding the Defense Department Tariff Exception\">Guidance Regarding the Defense Department Tariff Exception<\/a><\/li>\n<li><a href=\"#Conflict Between the Senate and the Trump White House\">Conflict Between the Senate and the Trump White House<\/a><\/li>\n<li><a href=\"#Conclusion\">Conclusion<\/a><\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<h2 id=\"Introduction\">Introduction<\/h2>\n<p>Although President Donald Trump\u2019s tariffs were largely <a href=\"https:\/\/www.supremecourt.gov\/opinions\/25pdf\/24-1287_4gcj.pdf\" target=\"_blank\" rel=\"noopener\">struck down<\/a> by the U.S. Supreme Court in February 2026, Trump has <a href=\"https:\/\/www.congress.gov\/crs-product\/LSB11398\" target=\"_blank\" rel=\"noopener\">threatened<\/a> to impose other tariffs, and they remain a risk for those exporting to markets in the United States \u2013 including procurement markets. But the largest procuring agency in the U.S. government, the Department of Defense (which the Trump administration calls the \u201cDepartment of War\u201d), has a special regulatory exception from tariffs. This <a href=\"https:\/\/publicprocurementinternational.com\/2025\/09\/11\/tariff-exemption-for-defense-items\/\" target=\"_blank\" rel=\"noopener\">updated<\/a> piece reviews that Defense Department\u2019s tariff exception, how it is exercised, and what the exception teaches us about procurement policy in the Trump administration.<\/p>\n<p>&nbsp;<\/p>\n<h2>The Trump Tariffs<\/h2>\n<p>The <a href=\"https:\/\/publicprocurementinternational.com\/2025\/04\/04\/trump-and-tariffs-the-procurement-exception\/\" target=\"_blank\" rel=\"noopener\">Trump administration\u2019s tariffs<\/a> have been controversial worldwide. One open issue for the U.S. procurement community has been whether those tariffs would be applied to items purchased from abroad by the U.S. government \u2014 in essence, whether the U.S. government would have to pay higher prices due to its own tariffs.<\/p>\n<p>In order to avoid tariffs, vendors importing for sale to the U.S. government can point to a number of <a href=\"https:\/\/publicprocurementinternational.com\/webinar-new-protectionism\/#United_States_Trump_Protectionism_and_Procurement\" target=\"_blank\" rel=\"noopener\">different regulatory exceptions<\/a>. Those governmentwide exceptions, however, are sometimes <a href=\"https:\/\/publicprocurementinternational.com\/webinar-new-protectionism\/#United_States_Trump_Protectionism_and_Procurement\" target=\"_blank\" rel=\"noopener\">difficult and uncertain to administer<\/a>, which leaves open the risk that the Trump tariffs will drain resources from federal government procurement. \u00a0A clear tariff exception was especially important for Defense Department purchases, because the Defense Department is responsible for <a href=\"https:\/\/www.gao.gov\/blog\/snapshot-government-wide-contracting-fy-2022\" target=\"_blank\" rel=\"noopener\">well over half<\/a> of the U.S. government\u2019s annual procurements of <a href=\"https:\/\/govspend.com\/blog\/federal-contract-awards-in-fy25-spending-patterns-across-agencies-and-industries\/\" target=\"_blank\" rel=\"noopener\">roughly US$800 billion<\/a> (\u20ac683 billion).<\/p>\n<p>&nbsp;<\/p>\n<h2 id=\"Defense Department Tariff Exception\">Defense Department Tariff Exception<\/h2>\n<p>The tariff exception is largely a process of claiming and applying the exception, which is described in detail in the Defense Federal Acquisition Regulation Supplement (DFARS) clause\u00a0<a href=\"https:\/\/www.acquisition.gov\/dfars\/252.225-7013-duty-free-entry.\" target=\"_blank\" rel=\"noopener\">DFARS 252.225-7013<\/a>, in\u00a0<a href=\"https:\/\/www.acquisition.gov\/dfars\/subpart-225.9-customs-and-duties\" target=\"_blank\" rel=\"noopener\">DFARS Subpart 225.9<\/a>, and in DFARS Procedures, Guidance and Implementation\u00a0<a href=\"https:\/\/www.acquisition.gov\/dfarspgi\/pgi-225.9-customs-and-duties\" target=\"_blank\" rel=\"noopener\">(PGI) Subpart 225.9<\/a>. The Defense Department\u2019s tariff exception has <a href=\"https:\/\/www.federalregister.gov\/documents\/2003\/03\/31\/03-7531\/defense-federal-acquisition-regulation-supplement-foreign-acquisition\" target=\"_blank\" rel=\"noopener\">been in place for decades<\/a>. Although the Trump administration is revamping thousands of pages of federal procurement regulations through the \u201cRevolutionary FAR Overhaul,\u201d the Defense Department\u2019s tariff exemption in DFARS Subpart 225.9 is <a href=\"https:\/\/www.acq.osd.mil\/dpap\/dars\/dfars_far_overhaul_class_deviations.html\" target=\"_blank\" rel=\"noopener\">not being changed<\/a>.<\/p>\n<p>The administrative process for duty-free entry of Defense Department supplies is also explained in a July 2025 Defense Contract Management Agency (DCMA)\u00a0<a href=\"https:\/\/www.dau.edu\/sites\/default\/files\/2025-07\/DFE%20Process_DCMA%20DAU%20LDC_8July25.pdf\" target=\"_blank\" rel=\"noopener\">presentation<\/a>\u00a0to through the Defense Acquisition University (now renamed the <a href=\"https:\/\/www.waru.edu\/\" target=\"_blank\" rel=\"noopener\">Warfighting Acquisition University<\/a> (\u201cWarU\u201d) by the Trump administration).<\/p>\n<p>The exception \u00a0process, if properly followed by the importing vendor and government officials, should result in a certification from the Department of War that the supplies are entitled to duty-free entry under Section XXII, Chapter 98, Subchapter VIII,\u00a0<a href=\"https:\/\/hts.usitc.gov\/search?query=9808.00.30.00\" target=\"_blank\" rel=\"noopener\">Item 9808.00.30 of the Harmonized Tariff Schedule<\/a>\u00a0of the\u00a0United States, which covers \u201cMaterials certified to the Commissioner of Customs by the authorized procuring agencies to be emergency war material purchased abroad.\u201d Customs rulings under Item 9808.00.30 are\u00a0<a href=\"https:\/\/rulings.cbp.gov\/search?term=9808.00.3000\" target=\"_blank\" rel=\"noopener\">here<\/a>.<\/p>\n<p>&nbsp;<\/p>\n<h2>Guidance Regarding the Defense Department Tariff Exception<\/h2>\n<p>In an August 25, 2025 Defense Department-wide\u00a0<a href=\"https:\/\/www.acq.osd.mil\/dpap\/policy\/policyvault\/USA001692-25-DPCAP.pdf\" target=\"_blank\" rel=\"noopener\">memorandum<\/a>, John Tenaglia, the Principal Director, Defense Pricing, Contracting, and Acquisition Policy, emphasized that existing Defense Federal Acquisition Regulation Supplement 225.901 (<a href=\"https:\/\/www.acquisition.gov\/dfars\/225.901-policy.\" target=\"_blank\" rel=\"noopener\">DFARS 225.901<\/a>) exempts many Defense Department purchases of foreign supplies. \u201cIn accordance with DFARS 225.901,\u201d noted the memorandum, \u201cunless the supplies are entitled to duty-free treatment under a special category in the Harmonized Tariff Schedule,\u201d or the contractor has already paid the duty, per DFARS 225.901 the\u00a0Defense Department will issue duty-free entry certificates for:<\/p>\n<ul>\n<li>End products and components from\u00a0<a href=\"https:\/\/www.acquisition.gov\/dfars\/225.872-1-general.\" target=\"_blank\" rel=\"noopener\">\u201cqualifying\u201d countries<\/a>\u00a0(which have reciprocal defense procurement agreements with the U.S. Department of Defense), and<\/li>\n<li>End products (but not components) that are \u201celigible products,\u201d\u00a0<em>i.e.<\/em>, come from nations that have free trade agreements with the United States\u00a0(such as the WTO Government Procurement Agreement), and<\/li>\n<li>\u201cOther foreign supplies for which the contractor estimates that duty will exceed $300 per shipment\u00a0into the customs territory of the United States.\u201d<\/li>\n<\/ul>\n<p>The Defense Department exception thus covers (1) supplies from allied nations that have reciprocal defense procurement agreements with the United States, (2) supplies from nations with free trade agreements with the United States, and (3) other supplies if the duties will exceed $300 (\u20ac256) per shipment (i.e., if the shipment will exceed $3000 (\u20ac2562) with the Trump administration\u2019s \u201c<a href=\"https:\/\/www.whitehouse.gov\/fact-sheets\/2025\/04\/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-sovereignty-and-strengthen-our-national-and-economic-security\/#:~:text=Using%20his%20IEEPA%20authority%2C%20President,satisfied%2C%20resolved%2C%20or%20mitigated.\" target=\"_blank\" rel=\"noopener\">baseline<\/a>\u201d 10% tariff) \u2013 essentially all significant shipments.<\/p>\n<p>As was discussed above, the\u00a0procedures for applying duty-free treatment to new Defense Department procurements are set forth in DoD guidance,\u00a0<a href=\"https:\/\/www.acquisition.gov\/dfarspgi\/pgi-225.902-procedures.\" target=\"_blank\" rel=\"noopener\">PGI Subpart 225.9<\/a>. The August 2025 memorandum further emphasized that \u201ccontracting officers shall include or <em>modify<\/em> contracts\u201d (emphasis added) to include\u00a0<a href=\"https:\/\/www.acquisition.gov\/dfars\/252.225-7013-duty-free-entry.\" target=\"_blank\" rel=\"noopener\">DFARS 252.225-7013<\/a>\u00a0\u2013 Duty Free Entry (as prescribed in DFARS 225.1101(4)) for any \u201ccontracts or orders that anticipate delivery of end products, components, or materials imported into the customs territory of the United States.\u201d The referenced clause, DFARS 252.225-7013, says that the\u00a0exception is to extend to subcontracts, as well.<\/p>\n<p>To\u00a0\u201cmaximize the Department\u2019s budget to meet warfighter needs,\u201d\u00a0the Defense Department memorandum said, contracting officers are to note in solicitations and contract materials \u201cthat\u00a0any subsequent contract action will include the duty-free entry clause,\u201d\u00a0and that the \u201ccontractor should use the clause to assure that appropriate shipping documentation is used\u00a0to prevent incurring duties.\u201d The Defense Department memorandum thus leveraged existing exceptions to make it clear that Defense Department supplies from abroad should be exempt from tariffs.<\/p>\n<p>&nbsp;<\/p>\n<h2 id=\"Conflict Between the Senate and the Trump White House\">Conflict Between the Senate and the Trump White House<\/h2>\n<p>Despite the Defense Department\u2019s support for the tariff exemption, a political contretemps surrounding the exemption arose under the <a href=\"https:\/\/publicprocurementinternational.com\/national-defense-authorization-act-ndaa-for-fiscal-year-2026-summary-of-acquisition-reforms\/\" target=\"_blank\" rel=\"noopener\">most recent version<\/a> of the National Defense Authorization Act (NDAA), which is Congress\u2019s primary annual vehicle for procurement reform. \u00a0Section 874 of the\u00a0<a href=\"https:\/\/www.congress.gov\/bill\/119th-congress\/senate-bill\/2296\/text?q=%7B%22search%22%3A%22Defense+authorization%22%7D\" target=\"_blank\" rel=\"noopener\">Senate version<\/a>\u00a0of the National Defense Authorization Act (NDAA) for FY 2026, <a href=\"https:\/\/www.congress.gov\/bill\/119th-congress\/senate-bill\/2296\" target=\"_blank\" rel=\"noopener\">S. 2296<\/a>, would have reinforced the tariff exemption for defense supplies. While it did not become law in the final version of the NDAA, Section 874 made clear the Senate\u2019s support for the exemption.<\/p>\n<p>In the<a href=\"https:\/\/www.congress.gov\/committee-report\/119th-congress\/senate-report\/39\/1\" target=\"_blank\" rel=\"noopener\"> committee report<\/a>\u00a0which accompanied the Senate bill, the\u00a0Senate Armed Services Committee (SASC) explained the concerns that underlay Section 874.\u00a0The Committee \u201cemphasize[d] that\u00a0defense-related acquisitions from qualified sources under Reciprocal Defense Procurement Agreements should remain exempt from any tariffs or trade restrictions,\u201d and \u201curge[d] the Department of Defense and relevant interagency stakeholders to preserve existing exemptions and ensure that future trade actions do not hinder defense procurement or compromise national security\u00a0priorities.\u201d<\/p>\n<p>But the Trump administration strongly objected to Section 874 in its <a href=\"https:\/\/www.whitehouse.gov\/wp-content\/uploads\/2025\/09\/SAP-S2296-Senate-NDAA-9.9.25.pdf\" target=\"_blank\" rel=\"noopener\">response<\/a> to the Senate bill. The White House said that President Trump had \u201cimposed reciprocal tariffs to address the national emergency related to the asymmetries in trade relationships,\u201d and that the \u201casymmetries have created an extreme goods trade deficit and contributed to the atrophy of domestic production capacity, especially that of the U.S. manufacturing and defense-industrial base.\u201d The White House argued that Section 874, by reinforcing the tariff exception for Defense Department purchases, \u201cwould undermine domestic capacity-building efforts by allowing the Department of War to bypass the Administration\u2019s tariffs, which were created to address trade imbalances and restore our Nation\u2019s atrophied industrial base.\u201d<\/p>\n<p>In the face of the White House\u2019s opposition, the final, compromise version of the NDAA for Fiscal Year 2026 (see <a href=\"https:\/\/publicprocurementinternational.com\/national-defense-authorization-act-ndaa-for-fiscal-year-2026-summary-of-acquisition-reforms\/\" target=\"_blank\" rel=\"noopener\">summary<\/a>) removed the controversial Senate provision regarding the tariff exemption. The congressional\u00a0<a href=\"https:\/\/armedservices.house.gov\/uploadedfiles\/fy26_ndaa_joint_explanatory_statement.pdf\" target=\"_blank\" rel=\"noopener\">Joint Explanatory Statement,<\/a> which accompanied the final legislation, noted Section 874\u2019s removal, at page 193, and called for a report from the Defense Department on the impact of tariffs and trade agreements.<\/p>\n<p>&nbsp;<\/p>\n<h2 id=\"Conclusion\">Conclusion<\/h2>\n<p>The\u00a0<a href=\"https:\/\/www.acquisition.gov\/dfars\/225.901-policy.\" target=\"_blank\" rel=\"noopener\">regulations<\/a>\u00a0and guidance discussed above, which exempt much of the Defense Department\u2019s purchases from tariffs, remain in place. The exemption reflects the Defense Department\u2019s goal <em>not <\/em>to allow tariffs to reduce its purchasing power \u2013 its warfighting capacity \u2013 even though tariffs are a pivotal policy tool for the Trump administration. The Senate\u2019s action on the tariff exemption reflected Congress\u2019s shared concern that tariffs not undermine the Defense Department\u2019s warfighting capacity; although that Senate action ultimately failed, as noted the regulatory exemption remains in place, and the political back-and-forth over the exemption showed that Congress and the Defense Department may diverge from the Trump White House on substantive issues of procurement policy.<\/p>\n<p>&nbsp;<\/p>\n<h4 id=\"Author\">About the Author<\/h4>\n<div class=\"author-profile\" style=\"display: flex; flex-wrap: wrap; gap: 20px; align-items: flex-start; margin-bottom: 10px; font-family: sans-serif;\"><\/div>\n<div style=\"display: flex; flex-wrap: wrap; gap: 10px; align-items: flex-start; margin-bottom: 30px;\">\n<div style=\"flex: 0 0 150px; max-width: 150px;\"><img decoding=\"async\" class=\"\" style=\"width: 112px; height: 169px; border-radius: 4px; border: 1px solid #dddddd;\" src=\"https:\/\/www.lexxion.eu\/wp-content\/uploads\/2026\/04\/Christopher-Yukins-portrait-2-e1776180183831.png\" alt=\"Christopher Yukins Portrait\" title=\"\"><\/div>\n<div style=\"flex: 1; min-width: 200px; text-align: justify; line-height: 1.6; font-family: georgia;\"><a href=\"https:\/\/publicprocurementinternational.com\/christopher-yukins-background-information\/\" target=\"_blank\" rel=\"noopener\"><strong>Christopher Yukins<\/strong><\/a> (ORCID ID 0009-0006-9663-3890) serves as the Lynn David Research Professor in Government Procurement Law at the George Washington University Law School, in the Government Procurement Law Program there. He is on the editorial boards of Lexxion\u2019s <em>European Defence &amp; Security Law &amp; Policy Quarterly<\/em> and <em>European Procurement &amp; Public Private Partnership Law Review<\/em>. He also publishes through his blog, <a href=\"https:\/\/publicprocurementinternational.com\" target=\"_blank\" rel=\"noopener\">publicprocurementinternational.com<\/a>, and the Social Sciences Research Network (<a href=\"https:\/\/papers.ssrn.com\/sol3\/cf_dev\/AbsByAuth.cfm?per_id=333989\" target=\"_blank\" rel=\"noopener\">profile<\/a>).<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>By Christopher R. Yukins, Lynn David Research Professor, Government Procurement Law, George Washington University Law [&hellip;]<\/p>\n","protected":false},"author":152,"featured_media":85617,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","dsi-category":[],"dsi-tag":[4177,4172,4178,4173,4174,4176,4175],"class_list":["post-85603","dsi","type-dsi","status-publish","has-post-thumbnail","hentry","dsi-tag-buy-european","dsi-tag-christopher-r-yukins","dsi-tag-defense-procurement","dsi-tag-department-of-defense-dod","dsi-tag-department-of-war","dsi-tag-trump-tariffs","dsi-tag-u-s-supreme-court"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.lexxion.eu\/en\/wp-json\/wp\/v2\/dsi\/85603","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lexxion.eu\/en\/wp-json\/wp\/v2\/dsi"}],"about":[{"href":"https:\/\/www.lexxion.eu\/en\/wp-json\/wp\/v2\/types\/dsi"}],"author":[{"embeddable":true,"href":"https:\/\/www.lexxion.eu\/en\/wp-json\/wp\/v2\/users\/152"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lexxion.eu\/en\/wp-json\/wp\/v2\/comments?post=85603"}],"version-history":[{"count":12,"href":"https:\/\/www.lexxion.eu\/en\/wp-json\/wp\/v2\/dsi\/85603\/revisions"}],"predecessor-version":[{"id":85634,"href":"https:\/\/www.lexxion.eu\/en\/wp-json\/wp\/v2\/dsi\/85603\/revisions\/85634"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lexxion.eu\/en\/wp-json\/wp\/v2\/media\/85617"}],"wp:attachment":[{"href":"https:\/\/www.lexxion.eu\/en\/wp-json\/wp\/v2\/media?parent=85603"}],"wp:term":[{"taxonomy":"dsi-category","embeddable":true,"href":"https:\/\/www.lexxion.eu\/en\/wp-json\/wp\/v2\/dsi-category?post=85603"},{"taxonomy":"dsi-tag","embeddable":true,"href":"https:\/\/www.lexxion.eu\/en\/wp-json\/wp\/v2\/dsi-tag?post=85603"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}