U.S. Trade Policy and Tariff Actions
- Trump Administration indicates in still plans to raise Section 122 tariffs to 15%: On 26 March, White House trade adviser Peter Navarro indicated that the Trump Administration is still planning to raise the Section 122 tariff to 15% from the current 10% tariff rate implemented on 24 February 2026. Additionally, Navarro noted the Administration’s intent to leverage tariff action under alternate legal authorities (e.g., Section 232 and Section 301) to approximate IEEPA country-specific duties struck down by the Supreme Court last month. We will continue to monitor for updates to U.S. tariff action and review for potential impact to PMMI members.
- European Parliament votes to advance U.S.-EU Framework Agreement with conditions: On 26 March, the European Parliament voted to adopt its negotiating position on legislation implementing the tariff aspects of the 2025 U.S.-EU Framework Agreement. With the adoption of the negotiation position, the EU will proceed with the negotiation and ratification process between the EU and EU Member States. For the EU commitments to enter into force, all 27 EU Member States must approve the deal. If implemented, the 1.7% standard/MFN EU tariffs on food processing and packaging machinery of 8422 and 8438 would be eliminated for U.S. origin machinery. The first EU negotiating meeting between Parliament and the Council of the EU is scheduled for 13 April.
- Senators call for the Trump Administration to address concerns with the import of certain machinery: On 26 March, Senators Tammy Baldwin (D-WI) and Bernie Moreno (R-OH) sent a letter to Commerce Secretary Howard Lutnick calling for a new Section 232 investigation into imports of heavy construction and agricultural equipment, which the Senators note would compel manufacturers to move production from Mexico and back into the U.S. Additionally, the letter requested the Trump Administration address “shortcomings” in the U.S.-Mexico-Canada Agreement (USMCA) rules of origin for heavy machinery as part of the ongoing USMCA review process. While food processing and packaging machinery of 8422 and 8438 are not in scope of the letter sent, potential future action by the Administration may be wider in scope and target all imports of industrial machinery. This could lead to additional tariffs on machinery manufactured by PMMI members or make it more difficult for PMMI members located in Nort America to have their machines qualified for USMCA duty-free preferential treatment.
- China launches reciprocal trade probes in response to U.S. Section 301 investigations: On 27 March, China's Ministry of Commerce (MOFCOM) initiated two counter-investigations into U.S. trade practices in response the recently initiated U.S. Section 301 investigations (which include China as a target country). The two MOFCOM investigations will review U.S. trade practices which disrupt global supply chains and U.S. trade practices which create trade barriers for renewable-energy products.
- MOFCOM is accepting comments from interested parties until 16 April, and the investigations are expected to conclude within six months. We anticipate these investigations are aimed at providing China with flexibility to quickly respond/retaliate against the U.S. if the Trump Administration decides to apply additional tariffs on Chinese products because of the ongoing U.S. Section 301 investigations. Please note that the U.S.-China trade truce, established in October 2025 and implementing a 10% retaliatory tariff on U.S. origin products imported into China, remains in effect through November 2026.
- Status of U.S. bilateral negotiations and discussions: During the period when IEEPA tariffs were in effect, the Trump Administration negotiated or announced trade agreements with nineteen 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 that IEEPA tariffs are deemed illegal, the IEEPA-related provisions of agreements are nullified. As of 24 February, all US trading partners are subject to the Section 122 10% tariff (increase to 15% expected) regardless of whether a deal was negotiated. Latest updates on negotiations during the week of 24-30 March include:
- European Union: The full European Parliament voted to advance the U.S.-EU Framework Agreement with conditions. Please see more details above.
- India: On 27 March, Indian Commerce Minister Piyush Goyal met with USTR Jamieson Greer. Goyal noted that the two sides discussed next steps in India-U.S. bilateral trade agreement negotiations. India has previously indicated it will sign the BTA once the U.S. establishes a new global tariff framework. No signing date has been announced.
Trade Policy Actions by Other Countries
- China asserts right to retaliate against Mexico's tariff hikes: On 25 March, China's Ministry of Commerce (MOFCOM) announced the conclusion of its trade and investment barrier investigation into Mexico. MOFCOM determined that the January 2026 of up to 50% tariff increase by Mexico on more than 1,400 products originating from countries without free trade agreements with Mexico constitutes a barrier to trade and investment. As such, China stated it is authorized to implement countermeasures to defend the interests of Chinese industries, though no specific retaliatory measures have been announced. China's potential countermeasures may lead to additional tariffs on machinery manufactured in Mexico and imported into China.
- EU and Australia conclude free trade agreement: On 24 March, European Commission President Ursula von der Leyen and Australian Prime Minister Anthony Albanese announced the conclusion of negotiations for the EU-Australia Free Trade Agreement after eight years of negotiations. Reporting indicates the EU-Australia FTA could be implemented by the end of 2026. While text of the agreement is not yet publicly available, the EU has confirmed that it has committed to eliminating all tariff on machinery imports. Australia has not yet provided clarity on potential preferential market access for EU origin machinery. Currently, food processing and packaging machinery of 8422 and 8438 exported from the EU into Australia are subject to a standard/MFN rate of up to 5% (some imports enter MFN duty-free). While exports of these machines from Australia into the EU are subject to an MFN tariff of 1.7%.
- World Trade Organization (WTO) Ministerial Conference concludes without e-commerce moratorium extension: On 30 March, the WTO's 14th Ministerial Conference (MC14) concluded without reaching an agreement on extending the moratorium on customs duties on electronic transmissions/e-commerce, which was set to expire at the end of MC14. If the moratorium expires, WTO member countries would be allowed to implement additional duties on e-commerce transactions which could impact digital and remote services provided by PMMI member companies to clients of processing and packaging machinery. We will continue to monitor WTO negotiations on the moratorium and any future potential tariff action by WTO member countries.
