Navigating Trade Uncertainty: The Top 5 Customs Issues Defining 2026

The Trade Landscape Has Changed — Permanently

Reciprocal tariffs, heightened scrutiny of transshipment, artificial intelligence (AI)-powered enforcement, and a web of new bilateral deals have replaced the old rules-based consensus. Companies that thrived under the prior regime now find themselves recalibrating supply chains, reassessing tariff exposure and compliance risks, and bracing for what comes next.

As recent headlines show, tariffs are increasingly being weaponized as a bargaining tool alongside, and sometimes in place of, traditional negotiations. Expect targeted duties to be paired with short, high‑pressure negotiating windows and leveraged to expand or escalate coverage. Against this backdrop, the trade environment will remain dynamic and unstable, and companies should be ready to quickly pivot or react in order to successfully navigate fast‑moving changes.

This year, five issues will define the customs and trade landscape: (1) a supercharged enforcement environment — where False Claims Act (FCA) suits, civil penalties, criminal prosecutions, and AI targeting converge; (2) an expanded forced labor regime reaching new industries and trading partners; (3) a proliferation of Section 232 duties and investigations spanning semiconductors, critical minerals, pharmaceuticals, and beyond; (4) the formal launch of the United States-Mexico-Canada Agreement (USMCA) six-year review and the implementation of framework bilateral deals; and (5) a landmark decision from the US Supreme Court on IEEPA tariffs and the likely fallout. The common thread: importers can no longer treat compliance as a background function. It is now a strategic imperative.

1. Enforcement on All Fronts: The Hammer Comes Down

In 2026, the US Customs and Border Protection (CBP) and its partner agencies will continue their enhanced focus on customs enforcement, deploying the FCA, civil penalties, and criminal prosecution in tandem. In August 2025, the US Department of Homeland Security and the US Department of Justice (DOJ) announced a cross-agency Trade Task Force to crack down on customs fraud. That Task Force delivered results fast. In 2025 alone, it secured settlements from several importers accused of fraud by whistleblowers under the FCA, including a $54 million settlement for misclassification, failure to mark country of origin, and masking the true origin of products through transshipment. The alleged misconduct dated back to 2015; a stark reminder that importers remain vulnerable to claims reaching years into the past.

The FCA’s qui tam provisions allow anyone to file suit on the government’s behalf, putting whistleblowers in the enforcement seat alongside CBP. Importers who intentionally evade duties through misclassification or transshipment face exposure not only to traditional CBP penalties but also to private litigants hunting for a payday. The DOJ has piled on civil penalty lawsuits that run concurrently with FCA liability, recently settling one such case for $53 million over evasion of antidumping and countervailing duties (AD/CVD) on automobile parts. And the Task Force has shown it will pursue individuals: in December 2025, it brought criminal charges against a corporate officer for duty evasion.

These actions underscore the Administration’s laser focus on transshipment as a vector for evading reciprocal tariffs, Section 301 duties, and AD/CVD orders. That focus will intensify in 2026. CBP is also sharpening its targeting capabilities. In 2025, it awarded contracts to AI companies to detect illicit transshipment using the same supply-chain-mapping technology many importers deploy internally. As these tools mature, expect a surge in inquiries and enforcement actions, including traditional CBP tools like CF-28s, CF 29s, Risk Analysis and Survey Assessments, and Audits.

What to Expect

CBP and the DOJ will use every tool at their disposal — FCA, civil penalties, criminal prosecution, AI-enhanced targeting — to police the supply chain. Importers should prioritize country-of-origin reviews, confirm declared values are correct — particularly for special tariffs like Section 232 — upgrade supply-chain mapping technology, train employees, and document compliance measures now. The cost of inaction is steep, and the statute of limitations is long.

2. Forced Labor: A Broader Mandate, A Longer Reach

2025 saw the Trump Administration take a broader approach to forced labor enforcement, deploying new methods, expanding geographic scope, and introducing forced labor requirements into new contexts. Although the total value of goods detained under the Uyghur Forced Labor Prevention Act (UFLPA) declined, the total number of detentions rose, likely reflecting CBP’s targeting of lower-value goods, particularly electronics. A lull in detentions in the first half of 2025 gave way to a sharp spike in the second half, signaling sustained enforcement momentum.

Withhold release orders, CBP’s tool for automatically detaining imports from known forced-labor sources, saw a marked increase in 2025, targeting a diverse set of countries and industries. The Forced Labor Enforcement Task Force added five high-priority sectors: caustic soda, copper, jujubes (red dates), lithium, and steel. Importers of these goods from China or high-transshipment countries should expect elevated detention risk and anticipate new additions to the UFLPA Entity List in 2026.

Forced labor is also migrating into trade agreements. The bilateral deals with Malaysia and Cambodia committed both countries to enacting laws prohibiting the importation of goods made with forced labor. How those provisions will be implemented and enforced remains unclear but the trend is unmistakable: forced labor is now a core element of treaty negotiations. Expect the same provisions in future bilateral agreements, and watch for the USMCA renewal discussions to reinforce or expand the forced labor commitments already embedded in that pact.

The Administration has also shown it will use tariffs as a forced labor enforcement tool. In December 2025, the USTR imposed Section 301 duties on Nicaragua to address unfair labor practices, including forced labor, with rates starting at 0% in 2026 and rising to 15% by 2028. Section 301 had not historically been deployed for human rights issues, but the past year proves the Administration will think outside the box.

What to Expect

Importers should expect sustained forced labor and UFLPA enforcement and prepare for an expanded forced labor regime that may manifest in unexpected ways. Supply chain verification, robust due diligence, and internal controls are no longer optional. They are baseline requirements to import into the United States.

3. Section 232 Expands: National Security Meets Industrial Policy

New Section 232 duties and updates to existing regimes on automobiles, trucks, and their parts; timber and lumber; and steel, aluminum, copper, and their derivatives arrived in 2025. Several new investigations were opened in industries like pharmaceuticals, polysilicon, robotics, and others that may see duties implemented in 2026.

Existing Regimes: Carve-Outs, Expansion, and Adjustments

The Administration embedded Section 232 carve-outs in multiple bilateral agreements in 2025, a trend that will continue. Automobile Section 232 duties were reduced for imports from Japan, South Korea, and the European Union (EU) through trade agreements, with a reduced-rate quota system introduced for the United Kingdom (UK). Other Section 232 regimes also set forth maximum rates for certain countries. Additional country-specific carve-outs are likely as new bilateral deals are finalized. This year will also test the Automobile Section 232 manufacturer’s offset program; if the rollout stumbles, expect administrative tweaks. A tariff-rate quota for steel and aluminum from the UK may serve as a template for similar arrangements with other trading partners. Through the periodic derivatives inclusion mechanism, we expect the list of products subject to Section 232 tariffs to expand, with unexpected products caught in the tariff web. Changes to copper, lumber, and timber duties remain possible.

Semiconductors: Tariffs and Negotiations

The US Department of Commerce initiated a Section 232 investigation into semiconductors, semiconductor manufacturing equipment, and their derivative products in April 2025. The White House released a proclamation on January 14, 2026, imposing a 25% duty on certain advanced computing chips and covered derivative products — more restrained than the 100% tariff the president had floated publicly. The proclamation exempts chips that “contribute to the buildout of the United States technology supply chain and the strengthening of domestic manufacturing capacity,” including those imported for data centers, repairs, research and development, startups, non-data-center consumer and industrial applications, and public-sector uses. Covered products are also exempted from other Section 232 duties such as steel and aluminum.

The White House directed the USTR and the US Department of the Treasury to pursue bilateral negotiations addressing national security implications of semiconductor trade, with a 180-day negotiating window before the president may impose additional Section 232 duties. The inclusion of derivative products means the electronics supply chain as a whole could be swept into any future action.

Critical Minerals: Price Floors and Bilateral Deals

Commerce’s investigation into processed critical minerals produced a report sent to the White House in October 2025. On January 14, the Administration announced it would negotiate with trading partners to establish price floors for processed critical minerals and their derivatives rather than impose immediate Section 232 duties. But the proclamation hinted that negotiations may be a first step, providing a 180-day deadline before the president may take further action. The investigation covers dozens of critical minerals and rare earth elements across multiple industries, and any bilateral agreement will likely sweep in derivative products, potentially affecting a significant slice of the electronics supply chain. Critical minerals provisions have already appeared in bilateral agreements with Australia, Cambodia, Japan, and Malaysia, and the Administration has signaled more to come.

Pharmaceuticals: High Stakes, Uncertain Timeline

Commerce initiated a Section 232 investigation into pharmaceuticals in April 2025, covering finished drug products, medical countermeasures, active pharmaceutical ingredients, key starting materials, and derivative products. Back in September 2025, President Trump signaled via social media that branded or patented pharmaceutical products would be subject to a 100% tariff unless the manufacturer “is building” their manufacturing facility in the United States starting in October, but no official action was taken, leaving those tariffs in abeyance. Recent developments in semiconductors and critical minerals point toward a similar playbook: limited tariffs paired with negotiations, or negotiations under the threat of tariffs.

Other Investigations on the Horizon

Several Section 232 investigations opened in 2025 remain within the 270-day investigatory window: robotics and industrial machinery, wind turbines, personal protective equipment and medical devices, drones, commercial aircraft, and polysilicon. Any of these could evolve into new duties in 2026. Entirely new investigations are also possible, especially if the Supreme Court strikes down the Administration’s IEEPA tariff regime. Without the IEEPA, Section 232 will become an even more central pillar of trade policy, and national-security-adjacent industries such as energy and manufacturing are prime candidates.

Section 232 Metal Content Value Questions

Importers continue to struggle with how to determine the dutiable value of steel, aluminum, and copper in derivative products. The only current published guidance is a brief FAQ that directs importers to apply the customs value principles in 19 U.S.C. 1401a and advises that the value is generally based on the invoice paid by the “buyer of the steel/aluminum content to, or for the benefit of the seller of the steel/aluminum content.” Based on this guidance, many importers interpreted the value to be based upon the price the importer’s supplier pays for the metal content alone. Informal guidance from CBP Base Metals Center for Excellence and Expertise that has been disseminated to certain brokers and companies indicates a potentially more conservative approach, basing value on the “fully loaded” price the importer pays for the metals, including the cost of fabrication, labor, and other production costs. This position has not been officially published. If the value of the metal content cannot be determined, CBP will assess Section 232 duties on the total entered value of the product.

What to Expect

Importers in currently affected industries should monitor existing Section 232 duties, watch for country-based carve-outs, and prepare for administrative adjustments including expansion of covered goods. Importers in potentially affected industries should assess supply chain vulnerability now. Importers of steel and aluminum products should ensure that they have documentation to support the declared value of the metal content in steel and derivative products. The disruption that Section 232 duties can cause should not be underestimated.

4. The Art of the Deal: The Fate of the USMCA and Other Trade Deals

The Future of North American Trade

The USMCA’s six-year review formally begins on July 1 but the parties are already positioning. President Trump recently told reporters the agreement is “irrelevant,” suggesting the United States could decline to extend the pact or even withdraw altogether. USTR Ambassador Greer has taken a more measured stance, acknowledging stakeholder support for renewal while signaling the Administration may sort issues through bilateral channels rather than the trilateral framework — leaving space for parallel arrangements alongside or in place of the USMCA.

The Administration has emphasized countering Chinese non-market influence, reflecting stakeholder concerns about investment and transshipment through Mexico to sidestep US tariffs. Expect proposals to tighten coordination on export controls and investment screening, and to ratchet up rules of origin, especially for automobiles, and elevate pressure regarding forced labor enforcement. Mexico has moved first, implementing broad tariff increases on China-origin goods and new legislation narrowing foreign investment and spurring domestic production — steps that align with US concerns ahead of the review.

Greer has also floated a “Critical Minerals Marketplace” to incentivize North American production and reduce reliance on Chinese inputs, paired with stricter rules of origin to link economic and security goals across the bloc. Whether pursued trilaterally or through parallel bilateral deals, these moves could reshape key USMCA pillars even if the agreement is renewed.

Other Trade Agreements

Between April and December 2025, the Administration released 12 joint statements regarding framework agreements with partners on tariff issues, including with the EU, Japan, South Korea, and the UK.

Many of the framework agreements reached in 2025 establish general principles and tariff ceilings rather than final implementing rules. Importers should not rely solely on the terms of joint statements or framework announcements to determine applicable duty rates. Instead, companies must closely monitor Federal Register notices and guidance issued by CBP to identify the precise tariff rates, product classifications, and country-of-origin requirements applicable to their specific goods. Because final implementing regulations may differ materially from announced frameworks, importers should confirm product coverage and applicable rates through official CBP resources before making supply chain or pricing decisions.

The legal basis for many tariffs imposed over the past year, particularly those implemented under the IEEPA, remains subject to significant judicial uncertainty. If the Supreme Court invalidates the IEEPA tariffs, the legality and effect on these agreements remain uncertain.

What to Expect

Companies should watch for bilateral deals that could supplement or replace parts of the USMCA. If extended, expect tighter rules of origin and investment measures targeting China. Early action on a critical minerals marketplace and alignment on export controls would signal a 16-year renewal; Mexico’s preemptive steps suggest willingness to accede to US requests.

Beyond the USMCA, given the rapidly evolving tariff landscape, companies should establish robust internal processes for monitoring developments in trade policy.

5. The Upcoming Supreme Court Decision Could Lead to Billions in Tariff Refunds

The Supreme Court is expected to issue a landmark decision in early 2026 stemming from two cases that challenge the president’s authority to impose sweeping tariffs under the IEEPA. Both the Court of International Trade (CIT) and the Court of Appeals for the Federal Circuit, upon appeal, held that IEEPA does not authorize tariffs. The Supreme Court heard oral arguments in November, and a majority of justices expressed skepticism about whether IEEPA permits the President to levy duties without explicit congressional authorization.

What Is at Stake

The IEEPA statute was designed to grant the president authority to regulate economic transactions during national emergencies, typically through sanctions. No president had invoked the IEEPA to impose tariffs until 2025, when President Trump used it to establish “reciprocal” tariffs on goods from most trading partners and “fentanyl” tariffs targeting China, Canada, and Mexico. These tariffs have generated more than $200 billion in revenue, affecting importers across virtually every sector. If the Court invalidates the IEEPA tariffs, importers could become eligible for refunds.

Potential Refund Procedures

While the prospect of refunds is significant, the pathway remains uncertain. Refund methodology may depend on the scope of the decision and any remedial instructions it provides. It is very likely that the refund mechanism will be remanded to the CIT.

A useful analogue is the 1998 United States v. US Shoe Corporation decision, in which the Supreme Court invalidated harbor maintenance fees on exports. Following that ruling, the CIT established a claims-resolution procedure, and exporters who could demonstrate they had paid the unlawful fees received refunds over two years. That experience suggests agencies may adopt standardized claim procedures and refund tariffs.

The CIT has already issued a blanket order automatically staying all actions seeking IEEPA refunds until the Supreme Court rules, with plans to provide guidance on “appropriate next steps” thereafter. The Court also confirmed that liquidation will not bar relief in cases properly filed before the courts for current and future plaintiffs.

Preservation of Refund Rights

Importers should take proactive steps now to preserve potential refund eligibility. Entries typically liquidate approximately 314 days after filing, meaning many entries subject to the earliest IEEPA tariffs are already reaching or have passed the liquidation threshold. The CIT confirmed that liquidation will not bar relief in cases filed before the courts. Nonetheless, some importers have filed suit in the CIT to protect their rights to refund in any event. While filing a case is a business decision, we recommend that all importers monitor their entries for liquidation and file protests for entries nearing the 180-day protest deadline to preserve rights to refunds.

Alternative Tariff Mechanisms

Even if the Supreme Court invalidates IEEPA tariffs, the Administration retains alternative statutory authorities to impose duties. Expect the executive branch to continue to implement tariffs under Section 232 of the Trade Expansion Act of 1962, which authorizes tariffs on imports deemed a threat to national security, and Section 301 of the Trade Act of 1974, which addresses unfair trade practices. Unlike the IEEPA, these statutes require investigations before tariffs can be imposed and typically apply on a sector- or country-specific basis. The Administration has already launched numerous Section 232 investigations covering products ranging from pharmaceuticals to semiconductors.

In addition, two lesser-used authorities have surfaced as plausible vehicles for broad-based measures because they entail minimal administrative procedure. Section 122 of the Trade Act of 1974 empowers the president, by proclamation and without a predicate agency investigation, to impose a temporary across-the-board import surcharge of up to 15% (and, where international rules allow, quotas) for no more than 150 days when “fundamental international payments problems” require restricting imports; the statute contemplates nondiscriminatory coverage, permits only narrow product exclusions for economic-need reasons, and has never been used. Separately, Section 338 of the Tariff Act of 1930 authorizes the president, upon finding that a foreign country discriminates against US commerce, to proclaim new or additional duties of up to 50% ad valorem, or even exclude products, on imports from the offending country; although the International Trade Commission is tasked with monitoring and informing the president of such discrimination, no prior formal investigation is a statutory prerequisite to presidential action, and modern Administrations have not invoked it to impose tariffs.

While these alternatives involve greater substantive constraints than the IEEPA, they provide alternative mechanisms for the president to ensure tariffs will remain a central feature of US trade policy regardless of the Court’s ruling.

De Minimis and E-Commerce Considerations

The de minimis exemption, which previously allowed goods valued at $800 or less to enter duty-free, was suspended under the IEEPA. Postal shipments now face either ad valorem duties at the applicable IEEPA rate or flat fees ranging from $80 to $200 per item. E-commerce sellers previously relying on simplified entry procedures must now file formal or informal entries and pay all applicable duties, adding complexity to compliance and potential refund claims.

The effect of the Supreme Court’s decision will turn on whether it upholds or invalidates the Administration’s use of the IEEPA to suspend de minimis and impose the current duty regime on low‑value and postal shipments. There is also a pending case concerning de minimis that has been stayed pending resolution of the IEEPA case. If the Court invalidates the IEEPA measures, expect the legal barrier to de minimis to fall, and, potentially, a return to simplified duty‑free treatment for qualifying low‑value shipments once CBP implements changes. However, it should be noted that the One Big Beautiful Bill Act also suspends de minimis starting in July 2027.

What to Expect

The IEEPA decision will have immediate consequences for importers. Companies should prepare now by preserving records, monitoring liquidation dates, and evaluating legal options to position themselves for refund eligibility if the tariffs are invalidated. Regardless of outcome, the broader tariff landscape will remain dynamic, with Section 232 and Section 301 actions likely to expand, and the potential for other tools such as Section 122 and 138 to be leveraged. Continued vigilance and coordination with experienced customs counsel will be essential as the regulatory environment continues to evolve.

As the trade landscape continues to shift, our team stands ready to help you navigate what comes next. If you have any questions, please contact a member of our Customs & Import Compliance team.