As the (Customs and Trade) World Turns: December 2025

We are navigating an unpredictable and fast-changing trade landscape and what we are reporting today may change by tomorrow (or in the next hour). However, our team is regularly issuing reports and alerts to help our clients and friends stay up to date. Sign up here for regular updates and to receive this newsletter each month. In addition, our Trump 2.0 Tariff Tracker can be found here and information regarding navigating the new tariffs can be found here.

This edition provides essential insights for sectors including international trade, national security, aluminum, steel and copper industries, fashion and retail, automotive, life sciences, electronics, artificial intelligence, transportation, electric mobility, e-commerce, shipping and logistics, and compliance, as well as for in-house counsel, importers, and compliance professionals.

In this December 2025 edition, we cover:

1. What some companies are doing to preserve refund rights to IEEPA tariffs.
2. Retroactive tariff relief takes effect under the Korea trade deal.
3. Charges against an Indonesian company for large-scale duty and tariff evasion scheme.
4. Certain tariff exemptions for agricultural products, UK pharmaceuticals, and the extension of Section 301 exclusions.
5. The CIT’s motion for rehearing on a classification case.
6. Imposition of new travel bans and restrictions under USCIS.
7. End-of-year forced labor updates.

1. To File an IEEPA Lawsuit or Not to File? That Is the Question

Some importers are rushing to file suit to preserve their International Emergency Economic Powers Act (IEEPA) tariff refund rights, but the question remains as to whether such lawsuits are strictly necessary or more of a precautionary measure. Our current view is that a case should not be necessary at this time, but importers should make individual assessments. Here is what you need to know.

What Happened?

Over the past month, roughly 200 importers affected by the IEEPA tariffs — including Costco, Bumble Bee Foods, Revlon, and others — have filed suit at the US Court of International Trade (CIT) to stop the US Customs and Border Protection (CBP) from “liquidating” (i.e., finalizing) their entries while litigation plays out at the US Supreme Court. The theory behind these suits is that CBP’s role is ministerial and thus the agency may not have the authority to reliquidate entries with refunds, so importers must prevent liquidation in order to preserve the right to possible IEEPA refunds. 

Relief Uncertainty 

Assuming that the Supreme Court finds the IEEPA tariffs unlawful for all importers (which is not guaranteed), the remedy could include a permanent injunction as well as a mechanism to refund IEEPA tariffs already paid. However, the scope of such an injunction or refund mechanism is an open issue, such that some importers have grown concerned whether and how they will obtain relief.

I’m an importer and paid IEEPA tariffs. Should I file suit now?

While the relief and refund mechanism remain uncertain, our view is that a suit is not currently necessary. Earlier this month, the government responded to a motion for a preliminary injunction in AGS Co. Automotive Solutions v. US Customs and Border Protection and agreed that CBP will reliquidate entries if the Supreme Court finds that the IEEPA tariffs are unlawful — although the government did not agree to stipulate to reliquidation. As things currently stand, importers may likely obtain refunds through the protest-and-appeal route, which avoids the need to rush and file a suit before an entry has liquidated. This process requires importers to obtain entry data, monitor the liquidation status of their entries and protest liquidated entries (usually 314 days after entry) to request refunds of the IEEPA tariffs. If necessary, importers can appeal a denial of that request to the CIT.

And the Fox Says… Put simply, these recent cases are meant to hold the status quo and keep refund rights alive until the Supreme Court and the CIT resolve the litigation. Whether an importer should file a protective appeal in the near future depends on several factors, but at the minimum, companies should be monitoring their entries for liquidation. Companies that have paid IEEPA tariffs should contact us directly for experienced counsel on what solution best suits their needs.

Contributors: Tyler J. Kimberly, James Kim, and Angela M. Santos

2. Tariff Relief for Most South Korean Goods

The Trump Administration implemented retroactive tariff reductions on certain South Korean imports. In a Federal Register notice published on December 4, the US Department of Commerce confirmed changes affecting the automobile, wood, and aircraft sectors. Below is a breakdown of these changes.

Effective Retroactively to November 1: Section 232 tariffs on automobiles, auto parts, and light trucks

Although imports of automobiles and auto parts are currently subject to a 25% duty under Proclamation 10908 (as amended), this agreement caps duties on specified passenger vehicles, light trucks (automobiles) and automobile parts (see here) from South Korea at 15% retroactive to November 1. If Column 1 (Most Favored Nation or MFN) or the US-Korea Free Trade Agreement (KORUS) rate is equal to or greater than 15%, no additional Section 232 duties will apply. Otherwise, the sum of the MFN or KORUS rate and the section 232 duties will total 15%.

Effective Retroactively to November 14: Reciprocal tariffs and Section 232 tariffs on timber, lumber, their derivatives, and certain civil aircraft and aircraft parts

The reciprocal duty on goods imported from South Korea will be 0% when the MFN rate or KORUS tariff rate, as applicable, is 15% or higher. If the MFN or KORUS rate is less than 15%, the reciprocal tariff will equal the difference between the MFN rate and 15%. This caps the reciprocal tariffs at 15%.

The same framework applies to section 232 duties on Korean timber, lumber, and their derivatives under Proclamation 10976 — the total amount of tariff will be capped at 15% for subject imports.

Additionally, all civil aircraft and parts covered by the World Trade Organization Agreement on Trade in Civil Aircraft, excluding military and unmanned aircraft, are exempt from reciprocal tariffs and from section 232 tariffs on steel, aluminum, and copper.

And the Fox Says… The implementation of these trade terms follows recent US-Korea discussions, including meetings in Korea regarding the Korea Strategic Trade and Investment Deal. South Korea appears to be among the first US partners in Asia to adopt measures that address both reciprocal tariff treatment and targeted Section 232 relief in specified sectors. If maintained, this approach could serve as a template for subsequent arrangements with other regional partners, including Malaysia, Cambodia, Thailand, and Vietnam. 

Contributors: Fernando Ramírez, Mario A. Torrico, Zak Hijazi, and Angela M. Santos

3. Not All That Glitters Is Gold: Alleged Customs Workaround Backfires and Prompts Multi-Agency Action

The US Attorney’s Office for the District of New Jersey charged an Indonesian jewelry manufacturer, a co‑owner, and two employees for an alleged multi‑year scheme to evade more than $86 million in customs duties and tariffs on over $1.2 billion in jewelry imported into the United States. According to the complaint, the defendants used transshipment and false origin claims to avoid lawful duties and, later, tariffs. The matter reflects coordinated enforcement by the US Department of Justice (DOJ), IRS Criminal Investigation (IRS‑CI), Homeland Security Investigations (HSI), and CBP, and has implications for importers relying on preferential programs or complex supply chains.

The Alleged Conduct

The charging documents describe two overlapping schemes by PT Untung Bersama Sejahtera. After Indonesia’s GSP lapsed at the end of 2020, Indonesian jewelry was routed through Jordan and declared Jordanian to claim duty‑free treatment under the US‑Jordan Free Trade Agreement. Later, after additional tariffs took effect, the defendants allegedly shipped “scrap gold” to Jordan, substituted Indonesian‑made jewelry, and returned it to the United States while misdeclaring US origin. Charges include conspiracy to commit wire fraud.

Enforcement Landscape and Risk Indicators

This case highlights sustained, coordinated enforcement by numerous governmental agencies against evasion schemes involving misstatements of country of origin and improper use of preferential programs. It also reflects the government’s continued use of criminal fraud theories to prosecute what have historically been addressed in part through civil customs penalty frameworks.

And the Fox Says… Claims of origin and routing are a priority for this Administration and are under heightened scrutiny. Expect increased, coordinated scrutiny from the DOJ, HSI, IRS‑CI, and CBP, with criminal fraud theories layered onto civil customs penalties. Now is the time to (1) pressure‑test preferential claims, “scrap/repair” narratives, and third‑country processing, and (2) ensure contemporaneous documentation can substantiate substantial transformation and rules‑of‑origin compliance.

Contributors: Yusra H. Siddique, Mario A. Torrico, and Jackson David Toof

4. Year-End Tariff Relief: Tariff Exemptions for Agricultural Products, UK Pharma Deal, Plus Section 301 Exclusions Extended

Importers looking for relief in this overwhelming tariff landscape have new opportunities for savings. Recent US announcements extend key Section 301 exclusions and carve out exemptions that may benefit United Kingdom (UK) pharmaceutical products and a variety of agricultural goods. Importers should assess whether their products may qualify for these recent exemptions or other duty mitigation strategies.

Section 301 Exclusions

The US Trade Representative (USTR) extended 178 existing exclusions to tariffs imposed under Section 301 through November 9, 2026. The extended exclusions cover categories including certain solar manufacturing equipment, electric vehicles, batteries, motors, critical minerals, semiconductors and solar cells, and more. Descriptions of the extended exclusions can be found in Harmonized Tariff Schedule of the United States (HTSUS) statistical reporting numbers and product descriptions set forth in US notes 20(vvv)(i), 20(vvv)(ii), 20(vvv)(iii), and 20(vvv)(iv) and 20(www) to subchapter III of chapter 99 of the HTSUS.

UK Pharma

The United States and UK have reached an agreement in principle on pharmaceutical pricing. Under the agreement, UK-origin pharmaceuticals, pharmaceutical ingredients, and medical technology will be exempt from Section 232 tariffs. In addition, the United States has also agreed to refrain from targeting UK pharmaceutical pricing practices in any future Section 301 investigation during President Trump’s term.

Agricultural Products

The White House has announced exemptions from reciprocal tariffs for certain agricultural products, including:

• Coffee and tea.
• Tropical fruits and fruit juices.
• Cocoa and spices.
• Bananas, oranges, and tomatoes.
• Beef.
• Additional fertilizers.

Separately, the United States has exempted 238 tariff subheadings covering certain agricultural products from Brazil’s 40% IEEPA tariffs.

And the Fox Says… The recent tariff exemptions and exclusions can materially reduce tariff exposure for importers. Companies should confirm whether these exemptions and exclusions may apply to their products. AFS regularly assists importers in developing tariff mitigation strategies to minimize exposure.

Contributors: Lucas A. Rock, Antonio J. Rivera, and Angela M. Santos

5. CIT Reverses Ruling on “Parts of Parts” Used in Aircraft Brake Discs

On November 25, CIT granted a motion for rehearing and reclassified Honeywell’s radial, web, and chordal PAN-fiber segments used to make aircraft brake discs, reversing its January ruling in Honeywell’s favor. See Honeywell Int’l Inc. v. United States, Court No. 17-256, Slip Op. 25-146 (CIT Nov. 25, 2025).

The Key Issue

The dispute turned on whether these cut-to-shape textile arcs — dedicated for specific brake-disc programs and used as imported to build needled preforms — qualified as a “part of a part” under the subpart rule, enabling classification as aircraft parts. The competing headings involved:

• HTSUS 8803.20.00 (aircraft parts; duty-free).
• HTSUS 6307.90.98 (other made-up textile articles; 7% ad valorem).

The Government’s Argument

In its motion, the government contended that the Court improperly skipped General Rule of Interpretation (GRI) 2(a) in its initial ruling. To conduct the subpart analysis, the Court was required to examine not only whether the segment was a part of the intermediary good (the preform), but whether under GRI 2(a), the preform itself was a finished part or an unfinished part with the “essential character” of an aircraft brake disc.

The Court’s Decision

In its decision, the Court reaffirmed that the segments are categorically a finished part of the preform, not raw materials. However, the Court found that the preforms lacked the essential characteristics of an aircraft brake disc, finding that key properties (strength, heat management, friction) arise only after carbonization and months-long densification. Nor was the preform a “blank,” because it required more extensive processing than mere finishing operations to become an aircraft brake disc. Because preforms were not classifiable as a part of an aircraft brake disc, the segments, as “interim articles {further} upstream from the brake disc,” were not classifiable as parts either and were properly classified under HTSUS subheading 6307.90.98.

And the Fox Says… For upstream articles that could potentially be classified as either a subpart or raw material, this recent decision demonstrates that the outcome can turn on the degree and nature of post-importation processing. Crucially, both the subpart and the intermediary good must qualify as “parts” for the upstream material to satisfy the subpart rule. The tariff stakes can be significant, so importers should document their classification rationale and assess whether downstream steps are merely finishing or consist of more extensive processing.

Contributors: Christian L. Bush and James Kim

6. USCIS Expands Entry Restrictions Impacting 19 Countries, Asylum, and Refugee Cases

Foreign nationals from 19 designated countries, as well as all asylum applicants and refugees, are now subject to severe restrictions on entry, residence, and employment in the United States. These measures have immediate implications for employers and will remain in effect until lifted by a US Citizenship and Immigration Services (USCIS) memorandum.

Entry Restrictions

In June, the Trump Administration fully banned the entry of nationals of Afghanistan, Burma, Chad, the Republic of the Congo, Equatorial Guinea, Eritrea, Haiti, Iran, Libya, Somalia, Sudan, and Yemen. It also barred nationals of Burundi, Cuba, Laos, Sierra Leone, Togo, Turkmenistan, and Venezuela from entering with immigrant visas or in B, F, M, or J status. These are the “19 Travel Ban Countries.”

USCIS Actions and Adjudication Holds

USCIS will re-review approved petitions, including green card petitions, for nationals of the 19 Travel Ban Countries who entered the United States on or after January 20, 2021. USCIS is also pausing adjudication of petitions (including work visas and green cards) filed by individuals born in or holding citizenship from those countries to permit maximum vetting. USCIS will treat nationality or birth in these countries as a “significant negative factor,” increasing the risk of denial. Additionally, all H‑1B and H‑4 applicants, regardless of nationality, will be subject to enhanced screening and must make all social media profiles public.

Afghan-Specific Measures

For Afghan nationals, the US Department of State has paused immigrant and nonimmigrant visa issuance for additional vetting. USCIS has halted processing of all immigration petitions, including work authorization, and the Trump Administration has ordered a re-examination of all Afghan entrants during the Biden Administration.

Asylum and Refugee Processing

USCIS has paused adjudication of all asylum applications regardless of nationality. The agency is also re-examining all refugee approvals granted from January 21, 2021, to February 20, 2025, and is suspending adjudication of refugee adjustment applications from that period.

And the Fox Says… With holidays approaching, nationals of the 19 Travel Ban Countries should avoid travel due to likely visa and reentry barriers. Employers should anticipate delays or denials of work authorization extensions, maintain strict I‑9 compliance (including reverification by expiration or termination when required), and plan for staffing disruptions.

Contributors: Berin S. Romagnolo, Nancy A. Noonan, Fernando Ramírez, and Maya S. Cohen

7. Forced Labor Updates: Section 301 Duties, New WRO, and Benefits for CTPAT Trade Compliance Partners

CBP continues to advance forced labor enforcement, imposing Section 301 tariffs on certain Nicaraguan goods, a new withhold release order (WRO), expanding supply chain risk assessment data tools, and adding benefits for Customs Trade Partnership Against Terrorism (CTPAT) trade compliance partners.

Section 301

The USTR announced on December 10 that it will phase in Section 301 tariffs on certain Nicaraguan goods as a result of its investigation into the country’s labor and human rights practices. This is the first time the USTR has decided to impose Section 301 tariffs pursuant to a labor rights investigation. The tariffs will be set out under the following phases:

• 0% on January 1, 2026.
• Increase to 10% on January 1, 2027.
• Increase to 15% on January 1, 2028.

The tariffs are limited to goods of Nicaraguan origin that are not originating under the Dominican Republic-Central America-United States Free Trade Agreement.

WROs

In November, CBP issued a WRO against Firemount Group Ltd., citing four International Labour Organization indicators of forced labor. CBP will detain shipments of garments, apparel, and textiles manufactured in Mauritius by Firemount Group. This may have been driven by a Transparentem investigation and reports on labor practices of textile companies in Mauritius issued in 2023 and 2024.

CTPAT Trade Compliance Benefit

CBP announced a new CTPAT Trade Compliance program where partners will receive a 48 hours advance notice of WROs. This compliments existing benefits, which include prioritized admissibility reviews for shipments detained for forced labor, in exchange for self-audits, voluntary disclosure of any violations, and submitting robust forced labor procedures, amongst other requirements.

And the Fox Says… CBP continues to expand its data‑driven supply chain risk assessment tools to support Uyghur Forced Labor Prevention Act enforcement. CTPAT Trade Compliance partners should be aware of and leverage available program benefits. Importers should closely monitor CBP enforcement and supply chain risk reporting to ensure that they minimize their risk exposure.

Contributors: Lucas A. Rock and Angela M. Santos

Additional research and writing from Fernando Ramírez, a project assistant in ArentFox Schiff’s Washington, DC, office.