U.S. Trade Policy and Tariff Actions
- Trump threatens additional 100% tariffs on Canada if Canada enters a trade agreement with China: On 24 January, President Trump announced on Truth Social that all imports from Canada into the U.S. will be subject to 100% tariff “if Canada makes a deal with China.” Canada’s Prime Minister Mark Carney met with China’s President Xi Jinping on 16 January resulting in an announcement of Preliminary Agreement-In-Principle aimed at resolving economic and trade issues with China. On 25 January, Carney stated that Canada has no intention of pursuing a free trade deal with China and that the recent agreement “merely cut tariffs on a few sectors that were recently hit with tariffs.” U.S. Treasury Secretary Scott Bessent suggested Canadian ties to China could be addressed through the USMCA renewal process. From October 2024 through September 2025 (most recent 12-month data available), the US imported $765.7 M in machinery/equipment of 8422 and 8438.
- As reported in the previous cross-border trade update: As part of the Preliminary Agreement-In-Principle, Canada agreed to extend its surtax remission measures (e.g., refund or rebate) for certain steel and aluminum products (i.e., wire, rods, bars, tubes, and pipes of Chapter 72, 73, and 76) from China that are in short supply in Canada through 2026, as well as expand remissions coverage to seven steel, two aluminum, and four derivative products to the list. The new list including these products has not yet been published. This expansion will enter into force by 1 March 2026 and be retroactive to 1 January 2026. Under these remission measures, PMMI members manufacturing in Canada that source from China may be able to claim refunds of Canada’s 25% surtax on select imports of steel and aluminum products, and should work with their customs brokers in Canada once the process is initiated.
- Trump rescinds tariff threat on 8 European countries: On 21 January, President Trump announced on Truth Social the previously threatened 10% tariffs on 8 European countries would not be imposed on 1 February. On 22 January, European Parliament President Roberta Metsola stated the Parliament would proceed with the implementation process of the US-EU agreement reached last summer. Once implemented, current EU tariffs 1.7% on US-origin packaging and food processing equipment under 8422 and 8438 will be duty-free into the EU.
- 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.
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22 January 2026: Agreement not yet implemented by the EU. EU Parliament will proceed with implementation of the US–EU agreement after President Trump rescinded the threat to impose tariffs on European countries. Please see more information above.
Resources:
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| 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:
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| 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:
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| 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:
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| Switzerland |
Preliminary Agreement |
14 January 2026: Switzerland’s Federal Council adopted the final negotiating mandate for talks on the trade agreement with the United States.
Retroactive to 14 November 2025: IEEPA duties on Switzerland will be no higher than 15% (imports subject to 15% or MFN rate, whichever is higher).
The Federal Register Notice explains that refunds of duties collected will be processed pursuant to applicable law and CBP procedures. Importers may file post-summary corrections for duties originally assessed at 39%.
Resources:
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| India |
Negotiations ongoing |
13 January 2026:
Negotiations ongoing
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| 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.
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| Mexico |
Negotiations ongoing |
12 January 2026: Preparations ongoing for the USMCA mandatory 6-year review in July 2026.
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| Taiwan |
Negotiations ongoing |
15 January 2026: US and Taiwan announced a trade deal.
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| 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
- India and the EU finalize free trade agreement: On 26 January, reporting indicated the India-EU free trade agreement negotiations have concluded and the agreement will be announced on 27 January at the India-EU summit in New Delhi. On 25 January, the Indian government indicated intent to immediately reduce duties on autos and implement future reduction schedules. While text of the agreement is not yet available, tariff reductions may be negotiated for other machinery/industrial goods into each market, as noted by EU Trade Chief Maroš Šefčovič. Machinery/equipment of 8422 and 8438 currently enter India with a 7.5% duty and enter the EU with a 1.7% duty.
