U.S. Trade Policy and Tariff Actions
- Supreme Court hears IEEPA tariff case: On 5 November, the Supreme Court heard oral arguments on the International Emergency Economic Power Act (IEEPA) tariffs cases. The cases before the judges were Learning Resources v. Trump and Trump v. V.O.S. Selections. While it is uncertain how the Supreme Court would rule, several of the Justices questioned the President’s ability to implement such extensive tariff action and the plaintiffs expected a ruling against IEEPA tariffs. U.S. Trade Representative James Greer also expressed confidence that the tariffs will not be striked down. However, he did acknowledge that the Administration “will be ready” to reimburse at least a portion of the tariffs if the Court rules them unlawful. A final ruling is not expected until early 2026.
- The court ruling will only affect the current IEEPA reciprocal and IEEPA fentanyl tariffs that are in place against US trading partners and not Section 232 or Section 301 tariffs. Please note that IEEPA tariffs for key PMMI members’ source markets include: EU and Japan 15% tariff if MFN rate is lower than 15%, or subject to the MFN rate if MFN is higher than 15%, Canada 35% on non-USMCA compliant, Switzerland 39%, China 20%, Taiwan 20%, South Korea 15%, Mexico 25% on non-USMCA compliant, and India 50%.
- Details released on the US-China Trade Deal (alert sent on 8 November): On 7 November, the White House released two Federal Register Notices (FRN) providing additional details on the US-China trade deal. One FRN suspends the higher IEEPA reciprocal tariffs on China originally scheduled to take place on 10 November 2025, while the other reduces the IEEPA fentanyl tariff. China’s Ministry of Finance also published a notice repealing select retaliatory tariffs after the U.S. fentanyl cuts take effect. Full details are as follows:
- Imports from China into the US: 20% reduced total tariff rate, effective 10 November, comprised of:
- 10% IEEPA fentanyl (reduced from 20%)
- 10% IEEPA reciprocal baseline (reciprocal tariff increase of 24% suspended until next year, 10 November 2026)
- U.S. Exports to China: 10% retaliatory tariff remains in place. Retaliatory tariff increase of 24% suspended for one year.
- In addition to the IEEPA 10% retaliatory tariff, US-origin of packaging and food processing machinery continue to be subject to MFN + retaliatory tariffs of 5-25% from Section 301 action taken during the first Trump Administration.
- No anticipated change to tariff cost exposure for U.S. exports of PMMI products to China.
- EU lawmakers discuss conditions for US-EU trade deal: On 4 November, the EU Committee on International Trade met to discuss how to implement the US-EU trade deal announced on 27 July. For the trade deal to be executed, the European Parliament must approve the concessions that were agreed upon between the US and the EU. The committee introduced the following amendments, which were not in line with the framework agreement, as a starting point for internal talks:
- Introduction of a “standstill” clause that would ensure the US would not use Section 232 tariffs to increase tariffs on the EU higher than 15%. Under this amendment, steel and aluminum tariffs should be covered by the 15% ceiling.
- Introduction of an 18-month “sunset clause” for codifying legislation, which would sunset the framework if the US and the EU did not reach a broader deal. The amendment is introduced to move negotiations toward a deal that substantially covers all trade in order to stay in compliance with WTO rules on interim deals.
Amendments by EU member countries to the Commission’s proposal are due 11 November and the Committee will hold additional discussions in early December.
- Status of US bilaterial negotiations and discussions: Please see the chart below for the latest on how certain countries are engaging with the United States in effort to reduce reciprocal tariffs and conclude bilateral deals.
| Market |
Status Update |
Summary |
| EU |
Agreement Framework released through Executive Order |
4 November: EU Parliament discussed concessions of the agreement. Another meeting will be held in December.
Resources:
|
| China |
Preliminary Agreement |
1 November: US and China announce trade deal. Federal Register notices include information on the US modifying China’s IEEPA tariff to 20% (10% IEEPA fentanyl + 10% IEEPA reciprocal). Higher reciprocal tariff increase paused until next year.
Resources:
|
| Japan |
Preliminary Agreement |
28 October: Fact Sheet includes additional information regarding Japan’s investment commitments in the United States including Energy, AI infrastructure, and Electronics and Supply Chain.
Resources:
|
| South Korea |
Preliminary Agreement |
29 October: Fact Sheet includes additional information regarding South Korea’s investment commitments in the United States including energy, tech infrastructure, and maritime partnerships.
Resources:
|
| India |
Negotiations ongoing |
6 November: President Trump is expected to visit India next year to continue trade negotiations.
|
| Canada |
Bilateral and USMCA Negotiations ongoing |
25 October: President Trump truthed that Canada’s tariff will increase by 10%. No details have been released.
|
| Mexico |
Negotiations ongoing |
29 October: US paused the implementation of the additional 5% IEEPA tariff (to total 30%) on non-USMCA compliant goods.
|
| Taiwan |
Negotiations ongoing |
No major updates. |
| Switzerland |
Negotiations ongoing |
10 November: Switzerland and the US are holding talks to reduce the 39% IEEPA reciprocal tariff.
|
| Brazil |
Negotiations ongoing |
No major updates. |
Trade Policy Actions by Other Countries
- China expressed interest in restarting free trade talks with the European Union: On 6 November, Reuters reported that China is open to deepening its cooperation with the EU and exploring possibilities of a trade agreement. Trade tensions between China and the EU have been high since the EU imposed higher tariffs on electric vehicles imported from China last year. Given the recent trade environment with President Trump’s IEEPA tariffs, China is looking to re-route their exports and become more closely aligned with the EU. Reporting indicates that the agreement could build on the proposed EU-China Comprehensive Agreement on Investment, which was stalled in 2021 due to China’s sanctions against EU officials and organizations. An agreement between the EU and China could include preferential market access provisions for food processing and packaging machinery but is not clear how comprehensive an agreement could be.
