U.S. Trade Policy and Tariff Actions
- CBP publishes guidance on Section 122 tariff: On 24 February, CBP published CSMS guidance on the application of the 10% Section 122 tariff noted in the proclamation from 20 February 2026. The guidance confirms the following:
- The 10% ad valorem duty applies to all imported goods from US trading partners entering for consumption or withdrawn from warehouse for consumption on or after 12:01 AM EST on 24 February 2026 through 12:01 AM EST on 24 July 2026.
- Exemptions for USMCA-compliant products from Mexico and Canada and products subject to Section 232 tariff action (including steel and aluminum tariff action).
- U.S. importers are eligible to request duty drawback on Section 122 tariffs, as long as shipments meet CBP duty drawback eligibility requirements.
- Please note on 21 February, President Trump truthed that he would be increasing the Section 122 tariff from 10% to 15%. There has been no official publication on increasing the rate and the Section 122 tariff continues to be 10%. We will continue to monitor and update once an official announcement is made.
- Importers ask Supreme Court to limit Section 301 tariff ‘modifications’: On 20 February, a group of importers submitted a petition for certiorari asking the Supreme Court to review the Section 301 tariffs implemented on Chinese goods under the first Trump Administration. In the petition for certiorari (which is the formal request to review a decision made by the lower court), the importers ask the justices to overturn an appellate decision that said the Office of the U.S. Trade Representative (USTR) acted lawfully in 2019 when it broadened Section 301 tariffs on $50 B worth of Chinese goods to instead cover some $370 B worth. The petition comes just as the Administration is preparing new Section 301 measures to replace the IEEPA duties the Supreme Court recently struck down. If the petition for certiorari is successful, the Administration may be required to narrow down existing Section 301 tariffs on Chinese goods, including removing certain tariffs on imported machinery from China, and limit USTRs ability to modify future Section 301 tariffs.
- More Section 232 investigations expected: On 24 February, the Under Secretary of Commerce for International Trade William Kimmit said that the Commerce Department is likely to roll out additional Section 232 national security probes, though did not mention specific industries. Food processing and packaging machinery is currently not subject to Section 232 tariffs, but the industry is impacted by the additional 50% Section 232 tariff on non-US origin aluminum and steel content and may be impacted by ongoing Section 232 investigation on robotics. We will continue to monitor for announcements of new Section 232 investigations and their potential impact to PMMI members.
- Trump warns countries that ‘play games’ with the US trade deals will face higher tariffs: On 23 February, President Trump warned countries on Truth Social to not withdraw from the newly negotiated trade agreements. In the truth social post, President Trump says that countries “will be met with a much higher tariff, and worse, than that which they just recently agreed to.” During the period when IEEPA tariffs were in effect, the Trump Administration negotiated or announced trade agreements with 18 countries. Countries with US trade deals of relevance to PMMI members include Taiwan, the UK, Switzerland, Japan, South Korea, and India. Given the Supreme Court decision, the IEEPA-related provisions of agreements are nullified. As of 24 February, all US trading partners are subject to the 10% Section 122 tariff regardless whether a deal was negotiated. The Administration has noted that they intend to stand by the trade deals and expect counterparts to as well. Country reactions to date include:
- European Union: The EU voted to pause implementation of the US-EU framework agreement as they await more information from the United States.
- South Korea: South Korea’s Industry Minister Kim Jung-kwan said that the US Supreme Court’s ruling would not affect its trade agreement and the conditions secured under the Korea-US tariff agreement will remain intact.
- India: India announced halting ongoing trade negotiations amid the uncertainty.
- The United Kingdom: Britian’s Trade Minister Peter Kyle said he was confident the trade deal between the US and Britain would still stand despite the 10% Section 122 tariff.
We will continue to monitor for official guidance on how trade agreements are affected and countries responses.
Trade Policy Actions by Other Countries
- Brazil’s lower house approves EU-Mercosur free trade deal: On 25 February, Brazil’s Chamber of Deputies approved the provisional EU-Mercosur trade agreement. The next step will be Senate approval. Argentina and Uruguay have already ratified the EU–Mercosur agreement, while Brazil and Paraguay are the remaining members whose approval is still required before it can take effect. Once the agreement takes effect, food processing and packaging machinery of 8438 and 8422 will enter the EU duty free. For Mercosur member states, 8438 and 8422 will be phased in under different tariff elimination schedules, with duty free access granted according to each country’s staging commitments. The full text of the agreement can be found here.
