U.S. Trade Policy and Tariff Actions
- IEEPA refund process updates from CIT and Customs and Border Patrol (CBP):
- On 4 March, the CIT issued an order in Atmus Filtration, Inc. v. United States directing the CBP to liquidate entries which have not yet been liquidated “without regard to the IEEPA duties”. Similarly, CBP has been ordered to reliquidate entries for which liquidation is not final without IEEPA tariffs applied. The Trump Administration is expected to appeal.
- Additionally, on 6 March, CBP confirmed to the CIT that the IEEPA tariff refund mechanism would be operational in the next 45 days and is working on a streamlined system (separate from existing refund processes) as opposed to processing individual tariff requests. This does not mean tariff refunds will be distributed in that timeframe, but rather when importers will be able to request refunds on IEEPA tariffs paid. Early reporting indicates that the process will:
- Require importers to work with their customs broker to file a declaration through CBP’s ACE portal.
- Importers will not be required to file litigation to secure refunds.
- Provide a single payment (including interest) to importers, not separate payments for each product entry.
- State Attorneys General coalition sue President Trump over Section 122 global tariffs: On 5 March, a group of 24 US state’s Attorneys General sued the Trump Administration arguing the implementation of global Sect. 122 tariffs are illegal. Oregon Attorney General stated the group’s intent is to seek a restraining order while the litigation proceeds through the Court of International Trade (CIT). The suit comes on the same week Treasury Secretary Bessent noted that Sect. 122 tariffs would be raised to 15%. As of 9 March, the White House has not yet officially published an Executive Order increasing the Sect. 122 tariff.
- Status of U.S. bilaterial negotiations and discussions: During the period when IEEPA tariffs were in effect, the Trump Administration negotiated or announced trade agreements with 18 countries. Countries with announced US reciprocal framework trade deals of relevance to PMMI members include the EU, Switzerland, Japan, UK, Taiwan, 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 Sect. 122 10% tariff (increase to 15% forthcoming) regardless of 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 Parliament’s trade committee agreed to extend the pause on the implementation of the US-EU framework agreement as they await more information from the United States.
- Switzerland: The Switzerland’s Federal Council announced on 6 March that it will continue negotiations with the US under the current negotiating mandate with the goal of concluding an agreement to stabilize bilateral trade.
- 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.
- 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. Further, on 8 March, Industry Minister Kim said the US has indicated it will not raise tariffs on South Korean goods if the special investment legislation passes in the South Korean National Assembly this week.
- India: India delayed a visit by India’s trade delegation which was planned to finalized an interim trade deal with the US.
- US and Mexico begin the US-Mexico-Canada Agreement (USMCA) Review Process: On 5 March, US Trade Representative Greer and Mexico’s Secretary of Economy Ebrard met to announce the first round of bilateral negotiations ahead of the trilateral joint review in July. Negotiators are expected to hold the first meeting during the week of 16 March and continue meeting regularly. The USMCA includes a mandatory six-year review process aimed at ensuring the agreement is dynamic and the Parties can address concerns. We will continue to monitor the USMCA review process for potential impact to PMMI members in North America.
Trade Policy Actions by Other Countries
- Brazil’s Congress approves EU-Mercosur free trade deal: On 4 March, Brazil’s Senate approved the EU-Mercosur interim Trade Agreement (iTA). Argentina and Uruguay have already ratified the iTA, while Paraguay is the only remaining member of Mercosur that has not yet ratified the iTA. In the EU, the European Parliament voted in January to challenge the agreement at the EU Court of Justice which could potentially delay the implementation by up to two years. However, the European Commission has indicated that it intends on provisionally implementing the iTA despite the parliament’s challenge. As such, once all Mercosur member countries approve the iTA it may come into force as soon as April 2026.
- Once the iTA enters into force, the 1.7% standard/MFN tariff rate for food processing and packaging machinery of 8422 and 8438 manufactured in Mercosur member countries and imported into the EU will be completely eliminated. For most EU-origin machinery of 8422 and 8438 imported into Mercosur member countries, the standard/MFN tariff of 2-20% will be reduced to duty-free in 11-16 equal annual reductions. Some machinery imports into Mercosur are already MFN duty-free or excluded from preferential market access. Specific preferential tariff is based on product code and the Mercosur member country in which the machinery is imported into.
