USA: An Introduction to International Trade: Customs

Continued Evolution

Section 301 tariffs and ongoing reviews

The international trade landscape has continued to undergo rapid transformation early in President Trump’s second administration, driven largely by the expansive use of tariff authority. Following a trade agreement with China in November 2025, the United States extended 178 specific product exclusions from Section 301 tariffs targeting China until 10 November 2026, while initiating new investigations as part of the ongoing four-year review of tariff increases on strategic sectors.

This review, which began in May 2022, continues to support expanded tariff ranges across sectors such as semiconductors, electric vehicles and critical minerals, with rates from 25% to 100%. In October 2025, the USTR opened an investigation into China’s implementation of the Phase One Agreement, with additional tariff increases in areas like solar cells, electric vehicles, batteries and semiconductors expected through June 2027.

Additional Section 301 tariffs on Nicaragua took effect in December 2025, to address concerns of forced labour, abuses of human rights, and violations of fundamental freedoms that affect US commerce.

The case HMTX Industries, LLC v United States – which challenges the legality of Section 301 tariffs on List 3 and List 4A goods – recently took an important step forward. The company was granted additional time to file a petition for a Writ of Certiorari, positioning the dispute for potential review by the US Supreme Court.

For importers, this development is significant. If the Supreme Court agrees to hear the case, it will finally address whether the government acted lawfully when imposing these later rounds of Section 301 duties. A ruling could determine the long‑term validity of the tariffs and influence whether importers may be entitled to refunds on duties already paid.

In short, this litigation has the potential to reshape the tariff landscape for thousands of companies and remains one of the most consequential trade cases to watch.

IEEPA and Section 232 tariffs

Tariff programmes imposed under the International Emergency Economic Powers Act (IEEPA) and Section 232 of the Trade Expansion Act of 1962 remain central to US trade policy and continue to influence major import sectors including raw materials, critical minerals and automotive products.

In early 2025, the United States enacted fentanyl-related tariffs under IEEPA on China, Canada and Mexico. Originally, Canada was at 25% for most goods and 10% for energy products but the 25% was increased to 35% effective 1 August 2025, for goods not qualifying under USMCA. Mexico’s fentanyl tariffs remain at 25% on non-USMCA qualifying goods.

The “Liberation Day” tariffs were then instituted as part of a reciprocal tariff programme on 2 April 2025, as a response from the second Trump administration to what are perceived to be large and persistent trade deficits between the US and global trading partners. This order imposed additional ad valorem duties of 10% on most US imports effective 5 April 2025, with heightened country-specific rates contemplated but later paused pending further review and negotiations. Over time, the President has issued two new Executive Orders that amended the initial Liberation Day tariffs to exclude certain agricultural products, critical minerals, pharmaceuticals and manufactured goods in addition to including a list of potential Tariff adjustments for Aligned Partners.

Section 232 tariffs on steel, aluminium and copper products continue to be levied, with a general rate of 50%, but some trading partners like Japan and the EU receiving reductions to 15% under individual Executive Orders.

As of early 2026, the Supreme Court has yet to issue a ruling on Learning Resources, Inc. v Trump – a case that calls into question the President’s tariff authority under IEEPA. Both fentanyl and reciprocal tariffs are a type of IEEPA tariff being challenged in the Supreme Court. Until the court issues a decision, the administration’s tariff regime rests on uncertain legal footing; even as those duties continue to be collected at the border and enforced by US Customs and Border Protection.

New Section 232 semiconductor tariffs

A new tariff initiative started in January in response to national security concerns in relation to semiconductor manufacturing. On 14 January 2026, the White House issued a presidential proclamation under Section 232 of the Trade Expansion Act of 1962 imposing a 25% ad valorem tariff on certain advanced computing semiconductors and related products. The tariff took effect on 15 January 2026, and is targeted at high-performance chips, including certain advanced AI processors that are widely imported into the United States. The proclamation underscores that heavy reliance on foreign semiconductor supply chains poses a national security risk and aims to incentivise domestic production and supply-chain diversification. Exemptions to the tariff were included for semiconductors imported:

• to be used in U.S. data centres;
• for a repair or replacement performed in the US;
• for R&D in the US;
• for a US start-up;
• for use in non-data centre (consumer) electronic applications;
• for use in non-data center civil industrial applications; or
• for use in the public sector.

While semiconductors have been excluded from earlier broad IEEPA-based tariffs, this new Section 232 tariff signifies a distinct and more focused national security determination specific to advanced computing components.

Expansion of steel and aluminium tariffs

The Bureau of Industry and Security (BIS) has now established a formal process for US industry participants to submit requests for the inclusion of additional steel and aluminium “derivative” products under continuing Section 232 tariffs on steel and aluminium. These two separate Presidential Proclamations remain in effect and added hundreds of downstream products to the tariff list. This process would allow for the expansion of these tariffs, generally at 50% for covered articles, with the exclusion of the UK.

USMCA joint review 2026

Under Article 34.7 of the USMCA, the United States, Canada and Mexico must state whether they intend to extend the agreement for another 16-year term beginning 1 July 2026. This review may address existing disputes involving dairy, energy and automotive rules of origin, and will shape whether the agreement continues unchanged, is amended, or enters renegotiation before its 2036 expiration.

European tariff threats and de-escalation

President Trump previously signalled potential tariffs of 10% – rising to 25% – on goods from several European nations amid disputes involving Greenland. These tariffs were scheduled for 1 February 2026, but later withdrawn on 21 January 2026, after NATO leaders reached a framework for future Arctic security co-operation.

CBP enforcement and trade fraud initiatives

US Customs and Border Protection (CBP) has entered a period of historic enforcement intensity, driven by expanded tariff regimes, national security reviews, and a growing emphasis on forced‑labour prevention, supply‑chain transparency, valuation and origin accuracy. Across nearly all major enforcement categories – penalties, audits, investigations, detentions and seizures – CBP activity has reached record levels, reflecting a strategic prioritisation of trade compliance as a core national security concern.

To support these objectives, the Department of Justice (DOJ) and CBP have recently established a Joint Task Force on Trade Fraud, a multi‑agency initiative focused on identifying, investigating and prosecuting complex schemes involving tariff evasion, trans-shipment, misclassification, undervaluation and fraudulent country-of-origin claims. This Task Force leverages shared intelligence, enhanced data analytics and co-ordinated enforcement authorities to target systemic non-compliance in high‑risk sectors, including steel and aluminium, critical minerals, electronics and industries affected by Section 301 and 232 duties.

For importers, this marks a significant escalation in enforcement exposure. CBP is now exercising broader detention powers, expanding the use of Form 28 and Form 29 requests, pursuing higher penalty amounts, and increasingly referring cases to DOJ for civil and criminal prosecution when fraud indicators are present. With compliance expectations rising across valuation, origin, admissibility, supply-chain documentation and tariff-programme eligibility, businesses must adopt a proactive and defensible trade compliance posture to minimise legal, financial and operational risk.

Conclusion

As US tariff measures grow increasingly complex, importers face an evolving and intensifying enforcement environment that demands sustained vigilance. Legal awareness is now essential to informed sourcing and classification decisions, as tariffs have effectively become a permanent feature of US trade policy. The overlapping and expanding use of Section 301, Section 232 and IEEPA – combined with unresolved Supreme Court challenges – has created a structurally complicated and legally uncertain landscape.

At the same time, CBP’s enforcement posture is at an all‑time high, and the creation of a DOJ–CBP Joint Task Force on Trade Fraud underscores the government’s commitment to aggressively pursue suspected violations. Duties continue to be imposed, expanded and enforced even as their underlying legal authority remains under active litigation. In this heightened environment, importers must prioritise robust compliance programmes, detailed documentation management and continuous monitoring of tariff and enforcement developments. For companies navigating the modern trade landscape, proactive compliance is no longer optional – it is a critical institutional safeguard against escalating regulatory, operational and financial risk.