As the (Customs and Trade) World Turns: January 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. We anticipate that the trade environment will remain dynamic and unpredictable throughout 2026, and companies should be prepared to adapt quickly to shifting regulatory requirements. Our team is monitoring these developments closely and will provide timely updates as tariffs are officially announced or implemented.

In this January 2026 edition, we cover:

1. The growing number of protective appeals to the IEEPA tariffs. 

2. A multimillion-dollar FCA settlement over transshipment and misclassification. 

3. An outlook of the USMCA six-year review. 

4. Non-IEEPA tariff updates for 2026. 

5. Venezuelan sanctions in the post-Maduro era. 

6. EO mandates a company’s divestment of digital chips following a CFIUS investigation. 

7. The initiation of an antidumping investigation on winter strawberries from Mexico.

8. CAFC’s reversal of CIT’s classification of monthly planners. 

1. The IEEPA Appeals Continue Without Injunctions

As of January 14, over 1,400 protective appeals have been filed at the US Court of International Trade (CIT) urging that tariffs were unlawfully imposed under the International Emergency Economic Powers Act (IEEPA) and seeking refunds of IEEPA tariffs paid. 

On December 15, 2025, the CIT denied a motion for a preliminary injunction in AGS Company Automotive Solutions v. US Customs and Border Protection, CIT Consol Case No. 1:25-cv-00255, which requested that the CIT prohibit US Customs and Border Protection (CBP) from collecting the IEEPA tariffs or liquidating entries that were assessed IEEPA tariffs. The CIT held that the plaintiffs were not at risk of “irreparable harm” because the government has repeatedly stated it will not oppose reliquidation and refunds if the IEEPA tariffs are ultimately held unlawful, and because the court can order reliquidation. Since the CIT issued that opinion, it has denied other motions for preliminary injunctions filed in these protective appeals and stayed proceedings in all protective appeals challenging the IEEPA tariffs until a US Supreme Court issues a decision whether the IEEPA tariffs are lawful. On January 14, the CIT issued a paperless order in the AGS case that confirms the government’s stipulation that reliquidation applies to all current and future similarly situated plaintiffs raising similar IEEPA claims and regardless of which IEEPA Executive Order (EO) is at issue. 

And the Fox Says… The CIT’s decisions denying the preliminary injunctions means that importers continue to be liable for paying the IEEPA tariffs unless and until the US Supreme Court strikes the tariffs down. While the CIT has indicated that it will not determine a mechanism for refunds until after the Supreme Court decision, we recommend that importers monitor the liquidation of entries subject to IEEPA tariffs and consider filing protests to preserve their refund rights for entries nearing the 180-day protest deadline. In anticipation of possible IEEPA refunds, companies should quickly apply for CBP’s Automated Clearinghouse (ACH) refund program through the Automated Commercial Environment (ACE) Portal because CBP will no longer issue paper checks after February 6. We can assist with applications to apply for both an ACE account and the ACH refund program. 

Contributors: Lucas A. Rock, Tyler J. Kimberly, and Angela M. Santos

2. DOJ Targets Transshipment and Misclassification: $54.4 Million FCA Settlement Highlights Risks of Non-Compliance

The US Department of Justice (DOJ) reached a historic $54.4 million settlement with Ceratizit USA LLC, an importer of tungsten carbide, to resolve allegations that it violated the False Claims Act (FCA). According to the DOJ, Ceratizit knowingly misstated the country of origin of their products by transshipping Chinese-origin tungsten carbide through Taiwan over a four-year period to avoid paying Section 301 duties. In addition, the DOJ alleged that Ceratizit misclassified tungsten carbide under the Harmonized Tariff Schedule (HTS) for nine years and failed to properly mark the country of origin of their products. 

The $54.4 million settlement with Ceratizit USA LLC marks one of the largest customs fraud resolutions in recent memory, underscoring the government’s commitment to aggressively pursuing importers who evade duties through misrepresentation of country of origin or tariff misclassification. Notably, the whistleblower in this case, Mark Stover, will receive approximately $9.75 million — a substantial payout that demonstrates the significant financial rewards available under the FCA to individuals who come forward with credible evidence of customs fraud. With the recent launch of the DOJ’s cross-agency Trade Fraud Task Force in August 2025 (see our September alert), the government has signaled that tariff evasion enforcement is a top priority, making this an opportune time for industry insiders with knowledge of fraudulent import practices to consider reporting such conduct.

And the Fox Says… This settlement underscores the DOJ’s heightened focus on customs fraud, and transshipment in particular, and demonstrates just how costly lack of oversight can be. Importers should reinforce internal controls over classification, valuation, and country-of-origin declarations; audit supply chains for transshipment risks; ensure documentation can withstand scrutiny; and foster a culture of compliance. The FCA’s statute of limitations (generally six years but never more than 10) should also stay top of mind, as it creates risk for past imports, not just those in the future. Whistleblower actions remain a powerful driver of enforcement. Where issues are identified, prompt internal investigation and consideration of voluntary self-disclosure may mitigate potential FCA exposure and related penalties.

Contributors: Collin M. Douglas, Mario A. Torrico, Jackson David Toof, and Nadia Patel 

3. USMCA at Six: Irrelevant or Indispensable?

President Trump recently told reporters the US-Mexico-Canada Agreement (USMCA) is “irrelevant,” suggesting the United States does not need imports from Canada or Mexico — raising the prospect that the United States could decline to extend the pact at the six-year review and allow it to sunset in 2036. In contrast, US Trade Representative (USTR) Ambassador Jamieson Greer has taken a more measured tack, acknowledging stakeholder support for renewal while signaling the United States will work with Mexico and Canada to sort out which issues are best addressed bilaterally versus under the USMCA framework, leaving space for parallel arrangements alongside or in place of the agreement.

The six-year review formally begins July 1, and all three parties are already positioning. Greer has emphasized countering Chinese non‑market influence, reflecting US 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 autos. Mexico, for its part, has moved first with 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. These moves, whether pursued trilaterally or through parallel bilateral deals, could reshape key USMCA pillars even if the agreement is renewed.

And the Fox Says… 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 and screening would signal a 16‑year renewal, and Mexico’s preemptive steps suggest willingness to accede to US requests. 

Contributors: Tyler J. Kimberly and James Kim

4. The United States Continues to Advance Its Tariff Strategy Outside of IEEPA: Section 232 and Section 301 Developments

As the Supreme Court reviews the president’s authority to impose tariffs under the IEEPA, the Trump Administration continues to rely on other authorities to advance its tariff policy. 

Section 232: Delays, Expansions, and Inclusion Timelines

The United States recently announced several updates to Section 232 duty programs.

1. Effective January 15, certain advanced computing chips and semiconductors are subject to a 25% tariff, while exemptions will apply to those semiconductor imports that contribute or strengthen domestic manufacturing capabilities. 

2. Another proclamation on processed critical minerals and derivatives did not impose tariffs, but instead directed US Department of Commerce and USTR to pursue negotiations to strengthen access to supply chains. 

3. Scheduled rate increases for Section 232 tariffs on upholstered furniture and on kitchen cabinets and vanities have been postponed until January 1, 2027. 

4. Commerce will likely continue to expand the scope of Section 232 duties on aluminum and steel derivative products through the ongoing inclusion process. A third inclusion request window is expected to open this month. Delayed determinations from the September cycle are also expected to be released this month. For automobile parts, Commerce’s inclusion process is operating on a quarterly basis, with comments due on the latest inclusion requests by January 19. Determinations from the October 2025 cycle remain pending. 

Section 301 Developments

1. Semiconductors: The USTR will phase in additional tariffs on certain Chinese semiconductors (e.g., products classified under HTS subheadings 2804.61.00, 3818.00.00, and certain subheadings in heading 8541 and 8542), starting with an initial rate of zero, set to increase on June 23, 2027, at a rate to be announced 30 days before the effective date. Any new rate will stack on top of existing 50% Section 301 duties.

2. Nicaragua: The USTR has implemented certain actions under Section 301 following its investigation and against Nicaragua’s labor and human rights practices. For more information, please see our December 2025 newsletter.

3. Section 301 Rate Increases: On January 1, the last set of increases to the Section 301 tariff rates for certain products from China became effective. The increases include:

   1. Lithium-ion non-electrical vehicle batteries to 25% (8507.60.0020).

   2. Natural graphite to 25% (2504.10.10; 2504.10.50; 2504.90.00).

   3. Permanent magnets to 25% (8505.11.00).

And the Fox Says… The through‑line across these actions is continuity in the US approach on tariffs. Regardless of how the Supreme Court rules on the IEEPA, we expect that Section 232 and 301 tariffs will remain central instruments to impose tariffs on key sectors and countries. As importers continue to monitor Section 232 and Section 301 tariff announcements, along with the developing tariff landscape, we can assist with the complex rules that vary amongst these different tariff regimes to effectively mitigate their exposure.

Contributors: Fernando Ramírez, Lucas A. Rock, and Antonio J. Rivera

5. US Sanctions on Post-Maduro Venezuela See Few Changes — So Far 

After capturing Nicolas Maduro on January 3 and repeatedly pledging to “run” Venezuela, the Trump Administration has publicly discussed opening up the country’s oil sector, suggesting an imminent shift in US economic sanctions policy. Most notably, a January 7 fact sheet by the US Department of Energy claims that the United States is “selectively rolling back sanctions to enable the transport and sale of Venezuelan crude and oil products to global markets.”

For now, however, all sanctions in place prior to Maduro’s removal remain in effect until further action from the US Department of Treasury’s Office of Foreign Assets Control. These include:

• Blocking sanctions on the government of Venezuela, including the state-owned oil and gas company Petróleos de Venezuela, S.A.

• List-based blocking sanctions on specially designated nationals, including Maduro, his family members, and high-ranking Venezuelan officials like acting president Delcy Rodriguez. 

• List-based blocking sanctions on dozens of vessels, many of them oil tankers believed to have transported Venezuelan oil. 

• Prohibitions on certain transactions and dealings related to debt, equity interests, bonds, dividend payments, securities, and digital currency connected to the Venezuelan government. 

• Potential imposition of sanctions against those operating in the oil, financial, defense and security, and gold sectors of the Venezuelan economy.

We expect the Administration may roll back at least some of these measures to pave the way for Western interests in Venezuela, likely through general licenses at first. A wholesale termination of sanctions, similar to what happened in Syria last year, seems unlikely at this stage. 

And the Fox Says… For now, businesses should continue to treat Venezuela as a high‑risk jurisdiction from a sanctions perspective. Counterparty due diligence (including 50% rule analysis) remains critical, and companies conducting business in Venezuela should maintain full compliance programs while monitoring for sanctions relief. 

Contributors: Derek Ha and Megan Barnhill

6. President Trump Orders Divestment of HieFo-EMCORE Deal

On January 2, President Trump issued an EO under Section 721 of the Defense Production Act of 1950 requiring HieFo Corporation to divest the digital chips business of EMCORE Corporation, which it acquired in April 2024, due to national security concerns.

The EO follows an investigation of the transaction by the Committee on Foreign Investment in the United States (CFIUS). According to the Treasury’s statement accompanying the EO, HieFo did not notify CFIUS of the transaction until after CFIUS had identified it through its non-notified transaction monitoring program.

According to the EO and accompanying statement, the transaction gave HieFo, a company allegedly controlled by a Chinese national, potential access to intellectual property, proprietary know-how, and expertise related to indium phosphide chips. The transaction also created the risk of diversion of supply of such chips away from the United States.

The EO requires that HieFo, its affiliates, and foreign-person shareholders divest all interests and rights in EMCORE’s digital chips assets. The divestment must be completed within 180 calendar days, unless an extension of time is granted by CFIUS. Further, HieFo must certify to CFIUS on a weekly basis that it and its affiliates are compliant with the EO and any conditions imposed by CFIUS, including through describing efforts to effectuate the divestment and a timeline for projected completion of remaining actions. The EO also authorizes CFIUS to inspect HieFo’s records, systems, and US facilities, and to impose auditing requirements to ensure compliance with the EO, any conditions imposed by CFIUS, and the ordered destruction or transfer of EMCORE’s intellectual property.

We cover the background surrounding the EO and key takeaways for businesses in more detail in our alert. 

And the Fox Says… This EO showcases the risks associated with failing to submit a CFIUS filing for high-risk transactions. Parties to a transaction should carefully determine whether CFIUS has jurisdiction and conduct due diligence on foreign buyers and investors. The Trump Administration is likely to continue to focus on transactions involving Chinese-owned or -controlled entities, including in critical or sensitive sectors, such as semiconductors.

Contributors: Terry M. Frederic, Christopher H. Skinner, William G. Stroupe II, Sylvia G. Costelloe, and Maya Cohen

7. Fresh Winter Strawberries From Mexico: ITC Opens Preliminary Probe

The US trade spotlight just landed on Mexico’s winter strawberries — and this case could be a real jam for importers. The US International Trade Commission (ITC) has opened the preliminary stage of an antidumping investigation into these berries, based on allegations that they are being sold in the United States at less than fair value. The petition comes from Strawberry Growers for Fair Trade, a group of Florida growers and related entities, alleging duties of 116.69%, and covers all fresh and chilled winter strawberries from Mexico harvested or entering the United States during the period October 1, 2024, through March 31, 2025. 

The ITC will assess whether US producers are likely being injured, while the Department of Commerce will separately decide whether to initiate its dumping investigation. Absent an extension, the ITC must reach a preliminary determination in 45 days (or in this case, by February 17). Interested parties, including importers, producers, industrial users, and representative consumer organizations, may participate in the preliminary phase of the investigation by filing questionnaires and comments. Filings must be made through the ITC’s Electronic Document Information System.

And the Fox Says… Importers of fresh winter strawberries should monitor for Commerce’s initiation decision, expected by January 20, consider participating at the ITC to protect their interests, and assess potential exposure pricing and supply impacts if duties are imposed.

Contributors: John M. Keblish, Kendall K. Murphy, and Jessica DiPietro

8. Blue Sky v. United States: Federal Circuit Reaffirms Mead — Planners Are Not “Diaries” Under the HTSUS

On December 4, 2025, in Blue Sky the Color of Imagination, LLC v. United States, Case No. 2024-1710, a three judge panel of the US Court of Appeals for the Federal Circuit (CAFC) reversed the CIT’s sua sponte classification of Blue Sky’s spiral-bound weekly/monthly planners as “diaries” under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 4820.10.2010, holding that CIT’s definition conflicts with the binding definition of “diary” provided over 20 years earlier in Mead Corp. v. United States. 

The merchandise contains traditional monthly grids and weekly breakdowns and is primarily used to note future appointments. In reaffirming Mead, CAFC underscored that “diary” is retrospective (i.e., it is used to record past events, not prospective), finding that Blue Sky’s planning calendars are prospective scheduling devices.

CBP classified the monthly/weekly planning calendars under HTSUS subheading 4820.10.4000, which covers “other” registers, account books, notebooks, letter pads, and similar articles. Blue Sky challenged that classification, seeking classification as a “calendar” under HTSUS subheading 4910.00.6000. CIT determined that diaries are both retrospective and prospective, and on its own classified the planners as diaries under HTSUS subheading 4820.10.2010.

Although CAFC reversed CIT’s decision, CAFC declined to decide the correct classification of the planners and remanded the case to CIT to assess competing arguments, including whether heading 4820’s stationary framework (which the Explanatory Notes indicate includes “engagement books”) is a more accurate classification than heading 4910 “calendars,” whose Explanatory Notes exclude “so-called engagement calendars.” CAFC also placed an emphasis on stare decisis and the practical distinction between year-specific planners and reusable notebooks or diaries. 

And the Fox Says… This decision underscores a few key principles for HTSUS classification. First, courts will look to binding precedent when interpreting tariff terms — even decades-old rulings like Mead can control outcomes. Second, the Explanatory Notes remain critical; subtle distinctions in their language can be outcome-determinative. Finally, importers should maintain clear documentation of a product’s primary function and intended use, as these factors often drive classification decisions and can be pivotal in the event of a CBP challenge.

Contributors: Jackson David Toof, Mario A. Torrico, and Andrew McArthur