U.S. Trade Policy and Tariff Actions
- New bill in the U.S. House of Representatives introduced to codify reciprocal tariffs: On 8 January, Representative Beth Van Duyne (R-TX) introduced the “Fair Trade Act of 2026” to the Ways & Means Committee which proposes a 10% ad valorem tariff to countries the with which the US has a trade surplus and a 15% tariff to countries with which the US has a trade deficit. The proposal follows U.S. Trade Representative Jameison Greer’s comments in December regarding the Administration’s plan to codify International Emergency Economic Powers Act (IEEPA) tariffs if the Supreme Court rules them illegal.
- Supreme Court does not issue ruling on IEEPA Tariffs: On 9 January, the Supreme Court did not issue a ruling on the legality of IEEPA tariffs. The decision is expected in Q1 of 2026, but the court does not report in advance which decisions will be issued on any given day. Lower courts, including the Court of International Trade and the 9th Circuit Court of Appeals, have issued various stays on lawsuits over IEEPA tariffs until the Supreme Court issues its decision.
- 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.
EU reduced tariffs on US goods not yet implemented.
|
22 December 2025: Negotiations ongoing.
Resources:
|
| China |
Preliminary Agreement |
1 November 2025: US and China announce trade deal. Federal Register notices include information on US modifying China’s IEEPA tariff to 20% (10% IEEPA fentanyl + 10% IEEPA reciprocal). Higher reciprocal tariff increases paused until next year.
Resources:
|
| Japan |
Preliminary Agreement |
28 October 2025: 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 |
1 December 2025: South Korea introduced legislation in parliament to implement the US–South Korea trade agreement. Retroactive to 1 November 2025, IEEPA duties on South Korea will be 15%.
Fact sheet includes additional information on South Korea’s investment commitments in the US, South Korea’s IEEPA reciprocal tariff rate, and reductions on Section 232 tariffs for auto and auto parts, timber and lumber, pharma, and chips.
Resources:
|
| Switzerland |
Preliminary Agreement |
5 December 2025: Switzerland adopted negotiating directives on Switzerland–US agreement. U.S. food processing and packaging machinery already receive duty-free treatment under MFN, so additional market access benefits are expected for US exports.
Resources:
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| India |
Negotiations ongoing |
9 January 2026: Commerce Secretary Lutnick said negotiations have stalled because Indian Prime Minister Modi did not call President Trump.
|
| Canada |
Bilateral and USMCA negotiations ongoing |
12 January 2026: Preparations ongoing for the USMCA mandatory 6-year review in July 2026. Canada and US to meet in January to discuss USMCA.
|
| Mexico |
Negotiations ongoing |
12 January 2026: Preparations ongoing for the USMCA mandatory 6-year review in July 2026.
|
| Taiwan |
Negotiations ongoing |
29 December 2025: Trade negotiations ongoing. No major updates.
|
| Brazil |
Negotiations ongoing |
20 November 2025: The White House issued an executive order removing IEEPA Brazilian domestic policy tariffs for certain agricultural products. No impact on PMMI machinery.
Resources:
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Trade Policy Actions by Other Countries
- EU member states support EU-Mercosur trade deal: On 9 January, the EU council adopted the EU-Mercosur (Brazil, Argentina, Uruguay, and Paraguay) interim trade agreement through two decisions - EU-Mercosur Partnership Agreement (EMPA) and of the Interim Trade Agreement (iTA). These decisions are subject to approval by EU Parliament, which can either approve or reject, but not amend the text of the agreements. If approved, the EU-Mercosur trade agreement will eliminate tariffs on various food processing and packaging machinery under HS 8422 and 8438. All Mercosur countries will eliminate tariffs on EU imports on a reduction schedule from 10 to 15 years, depending on the specific 8-digit HS code. The EU will eliminate all tariffs on Mercosur imports upon implementation. Currently food processing and packaging machinery of HS 8422 and 8438 from the EU are subject to Mercosur duties ranging from 0-20% and 0-2.7% from Mercosur to the EU. Elimination of these tariffs would create better market access for EU products of HS 8438 and 8422.
- EU-India Free Trade Agreement could be finalized by the end of January: On 12 January, German Chancellor Merz signaled the deal could be signed by the end of the month. Negotiations have sped up in response to US-India talks stalling in 2025 over Russian oil purchases. Bilateral trade between the EU and India totaled over $140 B in 2024. While full details are unknown, a free trade agreement between India and the EU could include market access provisions or reductions of current tariffs. EU products under HS 8422 and 8438 are currently assessed a tariff of 7.5% in India and Indian products of the same tariff codes are charged 1.7% when being imported into the EU. We will continue to monitor the negotiations and provide updates when they are published.
- Canadian Prime Minister Carney will visit China to repair trade relations: On 7 January, Prime Minister Mark Carney announced he will travel to China between 13 January to 17 January to restore a contentious trade relationship with China. Prime Minister Carney has stated Canada’s intent to double its non-US exports in the next decade in response to President Trump’s implementation of 35% tariffs on non-USMCA compliant products. Should Canada and China restore their relationship and work towards a trade agreement, PMMI members may benefit from increased market access provisions or a reduction in tariffs between Canada and China.
