New tariffs proposed, while some refunds are in question

USMCA review

With a deadline of July 1, the six-year-review of the U.S.-Mexico-Canada Agreement (USMCA ) is unlikely to result in a clean renewal or a disruptive break in the trade and tariff rules that essentially make North America an integrated supply chain.

Following preparatory talks over the past year, formal sessions are scheduled this month to iron out differences. Shippers can expect a continuation of tense negotiations that could shift the agreement into a rolling annual review, which is the default outcome if no formal renewal is agreed on.

In that case, the rules themselves would not change immediately, but the level of uncertainty would, as all three member countries could continue to put parts of the agreement up for discussion or make side deals covering specific issues of importance to them.

Bottom line: All three countries are expected to remain core sourcing and trading partners for each other, but shippers should plan for prolonged friction, especially around enforcement of rules for Chinese-origin goods in Mexican supply chains and the level of U.S. tariffs on vehicles, auto parts, and key inputs such as steel, aluminum, and copper.

Continued refund of U.S. tariffs is in question

U.S. Customs reported to the U.S. Court of International Trade in late May that about $85 billion out of $166 billion in potential refunds have been accepted for processing. But it didn’t outline how it plans to address some unresolved issues stemming from the U.S. Supreme Court decision ruling that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful, including global reciprocal tariffs and tariffs on goods from China, Mexico, and Canada meant to slow the flow of fentanyl.

Following a closed-door session, Judge Richard Eaton raised concerns about the progress of refunds, and in particular whether refunds will be issued on millions of informal customs entries that were liquidated and are now final. A hearing is scheduled for June 9. The U.S. administration said it plans to challenge the trade court’s authority to order universal refunds.

Meanwhile, U.S. Customs updated its frequently asked questions about refunds on entries flagged for reconciliation, saying it’s developing a solution to process such entries. In order for refund declarations to be processed first, importers are advised to delay filing reconciliation entries unless the deadline is within 30 days. If the deadline is approaching, the reconciliation entry should be submitted, but only the base duties, taxes, and fees should be paid—excluding the IEEPA duties.

New Section 301 tariffs proposed

The U.S. administration is expected to recreate much of the former IEEPA tariff structure through new Section 301 tariffs, which can be imposed on foreign goods to counter unfair trade practices. On June 2, the U.S. Trade Representative proposed new Section 301 tariffs tied to forced-labor enforcement, establishing a two-tier system of 10% and 12.5% duties on goods from roughly 60 countries.

Those in the proposed 10% category include Canada, Mexico, the European Union, Indonesia, Pakistan, and Ecuador, reflecting jurisdictions that have adopted or partially implemented forced-labor restrictions. Goods from all other covered countries—including key trading partners like the United Kingdom—would fall into the 12.5% tier, with the UK notably above its prior trade deal rate of 10%.

The process is moving on an accelerated timeline, with hearings July 7 and an intent to finalize action before the 10% temporary Section 122 tariffs expire July 24. This approach is viewed as a legally cleaner way to replace the expiring tariffs while preserving flexibility to layer in additional country-specific measures to reach higher effective rates over time that match previously announced country specific trade deals.

This continues to highlight that high quality and timely customs-brokerage services are a critical supply chain advantage. An environment of constrained customs-brokerage capacity is likely to continue.  

Section 232 tariff changes for imports from Taiwan

The United States and Taiwan finalized an agreement May 28, modifying Section 232 tariffs applied to certain auto parts, wood products, and aircraft components imported from Taiwan, effective retroactively to May 1, 2026. The changes reduce or eliminate additional duties for qualifying auto parts and civil aircraft components, while maintaining a 15% rate for certain wood products.

Importers may request refunds via Post Summary Corrections where duties were overpaid and drawback remains available for eligible claims. U.S. Customs also clarified exclusions from overlapping Section 232 duties and provided detailed filing and certification instructions for claiming the revised tariff treatment.

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