Trade and tariff changes continue uncertainty

IEEPA Refunds: Progress, but no refunds yet

Customs and Border Patrol (CBP) continues to build the automated Consolidated Administration and Processing of Entries (CAPE) system to process International Emergency Economic Powers Act (IEEPA) tariff refunds following the Supreme Court ruling invalidating those tariffs. The Court of International Trade has paused immediate refunds while CBP finalizes the system but has indicated progress is satisfactory.

Importers should assume refunds will ultimately be paid to the importer of record, with interest, once the system goes live. This will likely happen in phases. The priority right now is making sure that entry data, liquidation status, and ACE access are clean and ready.

CBP claimed on March 6 it would need 45 days to complete the refund system, which makes the target dates April 20. It is worth noting there are currently no penalties if CBP does not make that stated timeline.

Section 122 Tariffs: What to do (and not do)

The 10% global Section 122 tariff is now the operative regime and runs for 150 days (through late July) unless Congress extends it. This authority is intentionally limited and will be replaced by more durable tools (Section 301) that likely recreate the IEEPA country-specific tariff regime. As such, it is a temporary bridge, not a long-term solution.

Do:

• Continue normal sourcing, pricing, and routing decisions assuming this surcharge is short-lived.
• Ensure exemptions (USMCA, Section 232 non-attacking, in-transit rules) are properly applied.

Don’t do:

• Restructure supply chains or make long-term commitments based solely on Section 122.

Section 301 Investigations: The real replacement for IEEPA

The U.S. Trade Representative has launched two sweeping Section 301 investigations—one on forced labor enforcement failures (covering 60 countries) and one on structural excess industrial capacity (16 countries plus the EU). These investigations are explicitly designed to replicate the IEEPA tariff regime almost exactly, but on much firmer legal footing.

It should be noted that almost every trade deal negotiated includes language on enhanced screening for forced labor in the supply chain, so there is a direct connection to previously announced trade deals.

Key milestones

• Public comment deadlines (mid-April)
• Investigative hearings (late April/early May)
• Potential remedies announced before Section 122 expires (late July).

Section 232 for Pharmaceuticals Announced

Following a Section 232 investigation, the White House issued an Executive Order on April 2, 2026, imposing new tariffs on imports of patented pharmaceuticals and related ingredients. The administration cited concerns about the U.S. healthcare supply chain’s heavy reliance on foreign manufacturing and the potential vulnerabilities this reliance could create during global disruptions, noting that an estimated 54% of patented pharmaceuticals consumed domestically are produced abroad.

The baseline tariff rate is set at 100%, though the order provides for numerous company and country-specific exclusions and rate reductions, including for those companies that have approved onshoring commitments. Tariffs for countries with existing trade frameworks (i.e., European Union, Switzerland, United Kingdom, and Japan) will align with those agreements. The tariff rates will take effect on July 31, 2026, for companies listed in Annex III, and on September 29, 2026, for all others.

CBP urged to issue formal guidance on Section 232 valuation

U.S. Customs Border Protection (CBP) confirmed that informal guidance from its Base Metals Center of Excellence and Expertise (CEE) on valuing steel and aluminum content for Section 232 is advisory only and not binding.

For binding determinations, importers must seek binding rulings through CBP’s eRulings portal. The Base Metals CEE has circulated versions of this guidance since September, with the most recent dated March 15, 2026. Trade groups are urging CBP to issue formal guidance with uniform rules, and a lawsuit has been filed challenging the informal guidance on procedural grounds.

EU–U.S. trade deal advances with conditions

The European Parliament has voted to advance the EU–U.S. trade deal, improving near-term predictability and reducing escalation risk. The agreement would eliminate most tariffs on U.S. industrial goods and expand access for U.S. agriculture and seafood.

Lawmakers added key safeguards tied to U.S. tariff behavior. A “sunrise” clause makes EU tariff cuts contingent on U.S. compliance, including keeping tariffs at or below 15% on certain EU goods. A “suspension” clause allows the EU to pause benefits if the U.S. raises tariffs or applies economic pressure, while a “sunset” clause ends the agreement on March 31, 2028, unless renewed.

The deal does not limit U.S. Section 301 authority, leaving some uncertainty. It now moves to trilogue negotiations with EU governments and the Commission, the final step before implementation.

USMCA: Quiet now, louder this summer

The U.S-Mexico-Canada Agreement (USMCA) remains intact, but the mandatory joint review begins July 1, 2026. Discussions with Mexico are moving faster than with Canada. While it is still unclear what any final version will look like, it is clear that manufacturing in North America is the preference of all three governments.

Key milestone: rereview positioning this spring, and whether the parties agree to extend the agreement or drift into annual renegotiations through 2036, when the current agreement ends. This matters for auto manufacturing, agriculture, energy, and North American supply chain integration.

China: Xi–Trump meeting aims for stability

The Presidents of China and the U.S. are expected to meet in May, with a shared objective of stabilizing the relationship. This includes U.S. access to rare earths and Chinese access to advanced chips and technology inputs. While we expect calmer rhetoric and targeted accommodations, we do not expect a fundamental reset.

The Iran war is a wild card regarding its impact on US-China relations. China may see a weakened and stretched US military while the US may see indications of Chinese support of the Iranian regime.

Most importers have not set up ACH for refunds

CBP reports that out of ~330,566 importers that paid IEEPA duties, only ~21,423 have completed the electronic refund enrollment—roughly 6–7%. This means the vast majority remain unprepared.

CBP has warned refunds will be rejected until ACH/electronic refund details are properly set up and validated in the Automated Commercial Environment (ACE) Secure Data Portal. With the Consolidated Administration and Processing of Entries (CAPE) refund process ramping up, importers should immediately confirm ACH authorization and bank information in ACE to avoid delays.

Visit our Trade & Tariff Insights page for the latest news, insights, perspectives, and resources from our customs and trade policy experts.

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