As the (Customs and Trade) World Turns: February 2026

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. 

As recent developments demonstrate, tariffs remain a central tool of the Trump Administration’s trade policy and negotiating strategy, with various countries continuing to face the threat of new or increased duties. Our team is closely monitoring the anticipated US Supreme Court ruling on Trump’s use of the International Emergency Economic Powers Act (IEEPA) authority to implement tariffs. As of February 19, over 1,800 protective appeals have been filed at the US Court of International Trade seeking potential refunds of IEEPA tariffs paid. As trade enforcement ramps up in the new year, explore what lies ahead with our newly released 2026 Forced Labor Guide.

In this February 2026 edition, we cover:

1. An importer-filed CIT lawsuit challenging CBP’s application of informal guidance on Section 232 steel content valuation. 
2. Evolving trade deals and preferential duty treatment programs. 
3. New process implemented to tariff sellers of oil to Cuba. 
4. Final rule removing Cambodia from list of US arms embargoed countries. 
5. Forced labor updates including new WRO and updated enforcement dashboard. 
6. A WTO ruling in favor of China and against the United States. 

1. Importer Challenges CBP Section 232 Steel Content Valuation Content in Court

On January 27, Express Fasteners, Ltd. filed a lawsuit in the US Court of International Trade (CIT) challenging the US Customs and Border Protection (CBP) on an informal guidance document issued by CBP’s Base Metals Center of Excellence and Expertise (BMCEE) on how to calculate steel and aluminum content for purposes of applying Section 232 steel and aluminum tariffs. 

BMCEE’s Challenged Valuation Document

Express Fasteners filed a lawsuit challenging an informal guidance document selectively published by CBP’s BMCEE, alleging that CBP failed to follow notice and comment rulemaking procedures under the Administrative Procedure Act and CBP regulations, and also violated the Tariff Act of 1930.

On December 3, 2025, the BMCEE issued a guidance document to select importers and customs brokers outlining its position on calculating metal content. The informal guidance document states that articles consisting solely of steel or aluminum should be assessed 50% Section 232 tariffs on their full value, with no exclusions for costs of fabrication, overhead, or profit. According to the suit, this informal guidance document conflicts with Presidential Proclamations 10896 and 10947, as well as CBP’s published FAQs and Cargo Systems Messaging Service message 65236374. Current official guidance indicates that importers could break out steel and aluminum content value from non-metal content for Section 232 steel and aluminum tariff purposes. 

And the Fox Says… While the BMCEE guidance document remains informal without being acknowledged as an official legal interpretation on the valuation of “content,” its legal validity and corresponding implications must be carefully evaluated. If the court invalidates the applicability of the BMCEE guidance document, importers may have grounds to seek refunds of duties assessed on the full value of applicable steel and aluminum products, rather than on the steel or aluminum content alone. Importers impacted by the steel and aluminum tariffs should monitor this case to determine their options, including filing a similar suit at the CIT or pursuing administrative options (e.g., protest). 

Contributors: Collin M. Douglas, Lucas A. Rock, Antonio J. Rivera, David R. Hamill, and Mario A. Torrico

2. Customs Update: India IEEPA Tariffs Reset, US-El Salvador Deal Advances, and AGOA and Haiti HOPE Preferences Restored

There have been several key developments relating to trade deals and existing trade agreements, including trade deals with India and El Salvador, and the reauthorization of the African Growth and Opportunity Act (AGOA) and Haiti Hemispheric Opportunity through Partnership Encouragement (HOPE) and Haiti Economic Lift Program (HELP).

India IEEPA Tariffs

The United States and India have outlined an interim agreement that would reset reciprocal tariffs on Indian-origin goods. Pending further implementation, the United States will cap its reciprocal tariff on Indian imports at 18%, and cease applying a reciprocal tariff on listed product categories (e.g., generic pharmaceuticals, gems and diamonds, and aircraft parts) upon the successful conclusion of the deal (note some pharmaceutical and aerospace imports are already exempt from the reciprocal tariff based on previously established rules). On that point, the trade deal will also include adjustments to Section 232-related measures on select aerospace items and automotive parts. Separately, the president issued an executive order effective February 7, eliminating the 25% tariff that the United States had imposed on Indian imports as a result of India purchasing Russian oil. 

US-El Salvador Trade Deal

The United States and El Salvador have finalized a reciprocal trade agreement building on the 2025 framework to streamline non-tariff barriers and expand market access. Pursuant to the agreement, the United States will lift reciprocal tariffs on qualifying Salvadoran imports that cannot be produced in sufficient quantities in the United States, provide preferential treatment to certain products, such as Dominican Republic-Central America Free Trade Agreement qualifying textiles and apparel, and cap reciprocal tariffs on all other imports at 10%. Additionally, the two countries will align on any Section 232 interactions as implementation proceeds. Beyond tariffs, the deal focuses on minerals investment and deepens cooperation on sanctions, export controls, and defense trade. 

AGOA and Haiti HOPE Restored

AGOA and Haiti HOPE/HELP preferences have been reauthorized through December 31, 2026, and a bill has been passed by the House (and is pending in the Senate) that would extend the preferences through 2028. CBP guidance confirms retroactive refunds (without interest) for eligible entries made during the lapse from October 1, 2025, through February 3, while excluding refunds for IEEPA reciprocal duties and other surcharges. Importers must request refunds for eligible AGOA and Haiti HOPE/HELP entries submitted during the lapse by no later than August 2.

And the Fox Says… The tariff reductions on Indian imports will require active monitoring for the reciprocal tariff reduction, and commodity exclusions from Section 232 tariffs, and provide companies with opportunities to consider increasing or re-incorporating Indian products into their supply chain. Importers should also leverage market openings as a result of the US-El Salvador trade agreement (especially textiles or apparel and critical minerals) and promptly pursue any retroactive refunds pursuant to the restoration of AGOA and Haiti HOPE/HELP. Understanding the corresponding tariff adjustments, and procedural mechanisms from these trade deal updates, will likely require a product-specific analysis based on customs and trade rules. 

Contributors: Andrew McArthur, Tyler J. Kimberly, Lucas A. Rock, and Antonio J. Rivera

3. New US Tariff Framework Targeting Countries Supplying Oil to Cuba: What Importers Need to Know

On January 29, the White House signed Executive Order (EO) 14380, “Addressing Threats To the United States by the Government of Cuba,” declaring a national emergency regarding Cuba and created a tariff framework authorizing additional tariffs on imports from any country that directly or indirectly supplies oil to Cuba. Relying on the IEEPA as the statutory basis, the order cites Cuba’s support for hostile states and terrorist groups as a national emergency justifying these additional tariffs. 

According to the EO, implementing the additional tariffs will be a multi-step mechanism. First, the US Department of Commerce will determine which foreign countries sell or otherwise provide oil (including crude and petroleum products) to Cuba, including via intermediaries. Next, the Secretary of State will then recommend whether and to what extent additional duties should be imposed. Finally, the president will make the final decision on the scope of the additional duties and the rate. 

Although no tariffs have been imposed and no countries designated yet, this framework creates immediate risk and uncertainty for companies operating across global supply chains. Importers may face higher duties on goods sourced from designated countries, even if products are unrelated to the energy sector — meaning exposure could extend well beyond oil and gas.

And the Fox Says… Companies should begin mapping exposure to countries that supply oil to Cuba, including indirectly, as part of trade risk assessments. Oil producers, traders, shipping companies, insurers, and financial institutions should also assess whether transactions could be viewed as indirectly supplying oil to Cuba. Additionally, companies should monitor forthcoming State and Commerce Department guidance on how countries will be designated and how tariffs may be applied. This action underscores the continued convergence of sanctions policy and tariffs as tools of US foreign policy.

Contributors: Andrew McArthur, Mario A. Torrico, and Antonio J. Rivera

4. BIS Removes Cambodia From List of US Arms Embargoed Countries

On February 3, the Bureau of Industry and Security (BIS) published a final rule removing Cambodia from Country Group D:5 under Supplement No.1, Part 740 of the Export Administration Regulations (EAR). This change in BIS policy follows the US Department of State’s November 7, 2025, final rule that removed Cambodia as an arms-embargoed destination under the International Traffic in Arms Regulations based on Cambodia’s renewed engagement with the United States on defense cooperation and combating transnational crime. 

The BIS revision loosens the license requirements to export to Cambodia a range of items related to semiconductors and advanced computing. It also means that export license applications for 600-series and 9X515 items destined to Cambodia will no longer be subject to a policy of denial. 

The BIS and the Department of State changes stem from the White House’s October 26, 2025, announcement of a reciprocal trade agreement with Cambodia. The BIS removal of Cambodia from Country Group D:5 conforms with the principle underlying the Note to Country Group D:5, which provides that in case of any discrepancy between Country Group D:5 and the State Department’s list of countries subject to a US arms embargo, the State Department’s list controls. Cambodia remains in Country Group D:1, and the restrictions related to military and military-intelligence end uses and end users in Cambodia under EAR sections 744.21 and 744.22 continue to apply. 

And the Fox Says… Although Cambodia is no longer subject to an arms embargo and is not part of Country Group D:5 at this time, robust documentation should be maintained, and rigorous end-user screening should be conducted. Exporters and re-exporters engaged in, or considering, transactions involving Cambodia should carefully review their compliance programs and seek counsel before shipment where there is uncertainty or red flags.

Contributors: Derek Ha, Gamin Kim, and Sylvia G. Costelloe

5. Forced Labor Updates: New WRO, Updates to CBP’s Enforcement Dashboard, and Trade Deals Continue to Include Labor Provisions

CBP has issued a new withhold release order (WRO) and updated its Uyghur Forced Labor Prevention Act (UFLPA) Enforcement Statistics Dashboard with product-level data. Recent trade deals continue to include labor provisions, and our annual Forced Labor Guide is out now!

WRO

In late January, CBP issued a WRO against coffee harvested by Mexican coffee farm Finca Monte Grande. This is the second active WRO against a Mexican industry and the first since 2021.

UFLPA Statistics Dashboard

CBP has updated its UFLPA dashboard to include four-digit heading level details for stopped shipments. The dashboard also now defines a shipment as each import transaction (e.g., individual products in a shipment). Below we highlight several FY 2026 enforcement statistics. 

• In FY 2026, CBP stopped 21,159 shipments valued at $71.81 million.  
• The electronics sector led in value of shipments subject to review ($40.01 million), while apparel, footwear and textiles (11,378 shipments), and consumer products and mass merchandising (6,676 shipments) were the leading sectors by volume. 
• Products classified in heading 8541(the heading that covers solar cells) have been subject to 55.33% of stopped shipments by value in FY 2026.

Trade Deals and Labor Enforcement

As noted in our November 2025 Newsletter, recent trade deals included provisions aimed at labor and forced labor. Several deals announced in 2026 continue with this approach. The United States-India Trade Deal fact sheet discusses commitments to “enhance supply chain resilience” and labor. The El Salvador trade deal includes a labor rights provision and El Salvador’s commitment to prohibiting the importation of goods mined, produced, or manufactured, wholly or in part, by forced or compulsory labor.

And the Fox Says… CBP continues to issue WROs covering new products and regions. Importers should review the updated statistics dashboard to identify products that CBP is prioritizing for enforcement. Be sure to check out our 2026 Forced Labor Guide for in-depth analysis of recent developments and forward-looking predictions!

Contributors: Lucas A. Rock, Mario A. Torrico, and Angela M. Santos

6. China Scores a Hollow Victory at the WTO

On January 30, a World Trade Organization (WTO) panel ruled in favor of China and against the United States in DS623: United States - Certain Tax Credits Under the Inflation Reduction Act. The measure at issue, an investment tax credit (ITC), provided tax benefits for manufacturing products with US-origin goods. The WTO found that the ITC violated the United States’ following WTO obligations: 

1. The obligation to treat imported goods no less favorably than domestic goods, by conditioning the bonus credits on the use of US-origin steel, iron, and manufactured products.
2. The prohibition on trade-related investment measures that discriminate against imports by requiring the use of domestic products to obtain an advantage. 
3. The prohibition on subsidies conditioned on the use of domestic over imported goods. 

The Office of the US Trade Representative responded by questioning the legitimacy of the panel’s ruling and the WTO itself. The United States could appeal the ruling, but the WTO appellate body remains inoperative. Even if China used this victory to obtain WTO authorization to suspend concessions or other obligations under the WTO agreements afforded to the United States, such measures would likely get swallowed up in President Trump’s trade negotiations with China.

And the Fox Says… The United States will not take any action as a result of the panel’s decision, which should provide assurance to any US company planning on taking advantage of the ITCs. China may use its victory as part of a media campaign, but its victory is primarily symbolic. Between the current trade climate between the United States and China and the lack of a functioning appellate body, the panel’s decision is unlikely to result in any actual change to US policy.

Contributors: Christian L. Bush, Tyler, J. Kimberly, and Matthew Nolan