Annex II of the 2026 Section 122 action defines the HTSUS subheadings that are fully excluded from the new import surcharge. For importers, this annex determines whether a shipment is subject to the surcharge or entirely exempt. The document makes this explicit:
“All products that are properly classified in the provisions of the Harmonized Tariff Schedule… listed in this Annex are not covered by the action.”
And equally important:
“Only items that are properly classified in the listed provisions… are excluded from the action.”
This means classification not marketing description, not supplier terminology controls your exemption.
1. What Annex II Actually Does
Annex II is a classification‑based exclusion list. The product descriptions are informational only; the HTS code is the legal trigger. If your product is misclassified, the exclusion does not apply even if the description seems to match.
Some lines include “Ex” or “Aircraft” limitations, meaning only a portion of the subheading qualifies.
2. Major Categories of Excluded Goods
Annex II is dominated by agricultural, food, and natural resource exclusions, with a smaller set of industrial carve‑outs.
A. Beef and Bovine Products
Dozens of exclusions cover:
- Fresh, chilled, and frozen beef
- High‑quality beef cuts
- Boneless and bone‑in cuts
- Processed and unprocessed meat
- Offal (tongues, livers, edible offal)
- Salted, dried, smoked, and preserved beef
This is a near‑total carve‑out for bovine meat importers.
B. Fresh, Frozen, and Dried Produce
Extensive exclusions apply to:
- Tomatoes (seasonally defined)
- Jicama, chayote, bamboo shoots
- Cassava, taro, yautia, dasheen, arrowroot
- Coconuts, Brazil nuts, cashews, macadamias, pine nuts
- Plantains, bananas, pineapples, avocados
- Mangoes, guavas, papayas, mangosteens
- Oranges, limes, quinces, kiwifruit, durians
- Berries, tamarinds, and other tropical fruits
These apply across fresh, frozen, dried, preserved, and pulp forms.
C. Spices, Herbs, and Botanical Ingredients
Nearly all major spices are excluded:
- Pepper, paprika, Capsicum, Pimenta
- Vanilla, cinnamon, cloves, nutmeg, mace
- Cardamom, coriander, cumin, anise, fennel
- Ginger, saffron, turmeric
- Spice mixtures and herbs
This protects global spice supply chains.
D. Grains, Seeds, Starches, and Flours
Exclusions include:
- Barley (non‑seed)
- Canary seed, fonio, triticale
- Cassava starch, sago flour, banana flour
- Poppy seeds
- Copra
E. Cocoa and Chocolate Inputs
All major cocoa inputs are excluded:
- Cocoa beans
- Cocoa shells and waste
- Cocoa paste
- Cocoa butter
- Cocoa powder
F. Prepared Foods and Preserves
Exclusions cover:
- Mangoes in vinegar
- Bamboo shoots in airtight containers
- Pineapple preserves and jams
- Coconut preparations
- Banana pulp and preserved bananas
- Mango and papaya preparations
- Palm hearts
- Tapioca products
- Religious baked goods (limited “Ex” carve‑outs)
G. Juices and Beverage Inputs
Exclusions include:
- Orange juice (multiple Brix levels)
- Pineapple juice
- Lime juice
- Coconut water (limited “Ex”)
- Acai beverages (limited “Ex”)
- Coffee extracts, tea extracts, mate
H. Natural Graphite
Two graphite lines are excluded:
- Crystalline flake graphite
- Other graphite in powder or flakes
This is strategically important for EV and industrial supply chains.
3. How Importers Should Use Annex II
Confirm the HTS Classification
CBP will enforce the rule strictly:
“Only items properly classified in the listed provisions… are excluded.”
Classification errors will trigger:
- Retroactive surcharge assessments
- Penalties
- Loss of exclusion eligibility
Review Scope Limitations
Lines marked “Ex” or “Aircraft” require:
- Product‑specific qualification
- Documentation proving eligibility
Update Broker Instructions
Brokers must:
- Use the exact HTSUS subheading
- Apply exclusion logic consistently
- Maintain classification memos
Prepare Documentation for CBP
Importers should maintain:
- Product specifications
- Ingredient breakdowns
- Processing descriptions
- Country‑of‑origin documentation
4. Strategic Implications for Importers
Food and agricultural importers are largely protected
Most food categories are excluded, preventing cost shocks.
Industrial importers receive targeted relief
Graphite is the standout industrial exclusion.
Classification becomes a high‑risk area
Because the exclusion is classification‑driven, importers must tighten their compliance posture.
Mixed goods require caution
Products containing excluded ingredients do not qualify unless the finished good’s HTS code is listed.
5. Immediate Actions for Importers
- Audit all HTS codes against Annex II
- Identify surcharge‑exempt SKUs
- Flag borderline classifications
- Prepare CBP‑ready documentation
- Update landed‑cost models
- Communicate changes to suppliers and customers
How Peacock Tariff Consulting Ensures Your Imports Qualify for Exemption
Importers face two risks under Section 122: paying the surcharge unnecessarily or claiming an exemption incorrectly. Peacock Tariff Consulting eliminates both risks through a structured, audit‑ready approach.
1. HTS Classification Validation and Correction
We conduct a full forensic review of your classifications to ensure they align with:
- Annex II exclusion subheadings
- CBP rulings
- General Rules of Interpretation
- Chapter and section notes
This ensures your exemption is legally defensible.
2. Exemption Eligibility Mapping (SKU‑by‑SKU)
We build a clear matrix showing:
- Which SKUs qualify
- Why they qualify
- What documentation supports the claim
- What risks or ambiguities exist
This becomes your internal and broker‑facing compliance guide.
3. Broker Instruction Packages
We prepare standardized, CBP‑aligned instructions for your customs brokers, ensuring:
- Correct HTS application
- Correct exclusion application
- Zero misclassification exposure
4. CBP‑Ready Documentation Dossiers
For each qualifying SKU, we assemble:
- Product specs
- Ingredient breakdowns
- Processing descriptions
- Classification memos
- Annex II alignment statements
This protects you during audits, verifications, and post‑entry reviews.
5. Landed‑Cost and Duty Impact Modeling
We quantify:
- Your surcharge exposure
- Your exemption savings
- Your risk‑adjusted cost scenarios
This supports pricing, procurement, and supply chain decisions.
6. Ongoing Monitoring and Rapid Response
If CBP issues new rulings, clarifications, or enforcement patterns, we update your classifications and documentation immediately.