U.S. Trade Policy and Tariff Actions
- USMCA joint review: Mexico sets formal talks start date while Canada signals resistance to changes.
- Mexican Economy Minister Ebrard confirmed that the first formal round of USMCA negotiations will begin the week of 25 May, following two preliminary rounds of bilateral discussions with the U.S.
- Canadian Chief Trade negotiator Janice Charette stated on 22 April that Canada has no appetite to revise or rewrite the fundamental provisions of the agreement. Canadian Prime Minister Mark Carney separately indicated the U.S. is seeking significant concessions from Canada before bilateral talks formally begin.
- 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 regardless of whether a deal was negotiated. Latest updates on negotiations during the week of 21-27 April include:
- European Union: EU Trade Commissioner Maroš Šefčovič traveled to Washington during the week of 21 April to meet with Ambassador Greer, Commerce Secretary Lutnick, and Treasury Secretary Bessent. Šefčovič indicated that discussions on steel and aluminum tariffs are "going in a positive direction" and that both sides agreed to "accelerate work at the technical level" with Lutnick to resolve remaining issues, including on derivative products still subject to the 50% tariff. While discussions are ongoing and a specific outcome has not been established, we anticipate that further coordination between the U.S. and EU on steel and aluminum overcapacity may result in lower Section 232 tariffs for EU origin steel and aluminum products imported into the U.S. This would align with the UK’s preferential treatment which includes reduced Section 232 tariff rates of 15%-25% for UK-origin steel and aluminum. Please note that food processing and packaging machinery of 8422 and 8438 are not subject to Section 232 tariffs.
- India: A negotiation delegation from India visited Washinton from 20-22 April, with U.S. and Indian officials indicating discussions as positive and productive. U.S. officials have noted that most of the substantive issues holding up a trade deal are close to being resolved. Since February 2025, the U.S. and India have been negotiating a reciprocal trade agreement which may provide for lower additional tariffs for imports from India into the U.S., including machinery. However, discussions have yet to result in any substantial commitments. Additionally, the Trump Administration Section 301 investigations into forced labor and structural excess capacity, which target India and various other countries, and the anticipate resulting tariff action may create additional complications for finalizing a trade deal.
Trade Policy Actions by Other Countries
- Canada and Mercosur advance FTA negotiations: On 21 April, Canada's International Trade Minister Maninder Sidhu confirmed that Canadian trade negotiators will travel to Brazil this week for the next round of Canada-Mercosur free trade agreement (FTA) negotiations. Canada and Mercosur member countries (Argentina, Bolivia, Brazil, Paraguay, and Uruguay) began negotiations for a comprehensive trade agreement in 2018, and discussions have recently progressed at “record speed” with the agreement expected to be signed by autumn 2026. The anticipated Canada-Mercosur FTA follows the provisional implementation of a comprehensive agreement between Mercosur and the EU and a wider trend my by certain countries establishing free trade agreements. While a scope of specific market access commitments has not been published, a trade agreement may include preferential market access for machinery. Currently, food processing and packaging machinery of 8422 and 8438 imported into Canada is subject to non-preferential duty-free rates. Imports of these machinery from Canada into Mercosur countries are subject to non-preferential rates of 5%-14%.
- India and New Zealand sign a Free Trade Agreement: On 27 April, India and New Zealand signed an FTA concluding negotiations that began in March 2025. The Parties must now ratify the agreement before it enters into force and market access commitments are available to imports. There is no public timeline for when the ratification process will conclude or when the agreement will be implemented. Once implemented, Indian origin food processing and packaging machinery of 8422 and 8438 will be imported into New Zealand preferentially duty free, with all standard/MFN duties of 0% - 5% eliminated. Imports of machinery from New Zealand into India will have standard/MFN duties of 5.5% - 11% eliminated upon entry into force of the agreement or in 3 or 7 equal annual installments. Preferential rates for imports into India are inclusive of additional indirect fees including the Agriculture, Infrastructure and Development Cess (AIDC), Health Cess, and Social Welfare Surcharge (SWS)
- China warns EU over proposed "Made in Europe" Industrial Accelerator Act (IAA): On 27 April, China's Ministry of Commerce issued a public statement threatening to implement countermeasures over the EU's proposed Industrial Accelerator Act, if Chinese companies are harmed by the proposed regulation. The Act would require companies seeking public funding to meet minimum EU-origin content thresholds and is aimed at pushing back against surging imports from China of high-tech products. The IAA follows similar actions by the US and UK seeking to contend with the Chinese overcapacity in a range of industries. While it is unclear what specific countermeasures China could implement, these may impact EU origin high-tech machinery exported to China.
