As the (Customs and Trade) World Turns: June 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. 

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 June 2026 edition, we cover:

1. IEEPA Refund Litigation: CBP is phasing refunds through CAPE while actively fighting the CIT’s universal refund order on appeal.
2. Section 232 Metals: A new proclamation offers targeted tariff relief for agricultural, HVAC, and mobile industrial equipment while lowering the US-content threshold and covering new derivative products.
3. Section 301 (Brazil, Vietnam, Forced Labor): USTR proposed 25% tariffs on Brazilian goods, opened an IP investigation into Vietnam, and proposed tariffs on 60 economies over forced labor enforcement failures.
4. FCA Customs Fraud: The DOJ settled multiple FCA cases targeting tariff evasion, headlined by a record $549.5 million aluminum fraud settlement.
5. AGOA Modernization: The USTR is soliciting comments on overhauling AGOA before it expires at year-end 2026. Companies have the opportunity to make retroactive refund claims by August 2!
6. US-Taiwan Trade Deal: A retroactive deal caps Section 232 duties at 15% on certain Taiwanese goods and exempts aircraft components from metals tariffs.
7. USMCA Review: With President Trump signaling no renewal by the July 1 deadline, focus has shifted to bilateral US-Mexico talks on content rules and sector-specific arrangements.
8. Section 122 Tariffs: The Federal Circuit stayed the CIT’s invalidation and signaled the government is likely to prevail, keeping the tariffs in place through appeal.

1. The IEEPA Refund Litigation Heats Up

As mentioned in our previous newsletter, US Customs and Border Protection (CBP) launched CAPE Phase 1 on April 20, which generally provides refunds of International Emergency Economic Powers Act (IEEPA) tariffs for unliquidated entries or entries that had liquidated no more than 80 days prior. Since our last update, the litigation and refund process have advanced on several parallel tracks: Court of International Trade (CIT) IEEPA orders, the US Department of Justice’s (DOJ) position, the Federal Circuit appeal and related stay proceedings, class certification, and CAPE phase developments

CIT IEEPA Orders: Judge Richard K. Eaton continues to supervise refund implementation and ordered CBP to appear and explain the refund process and subsequent CAPE phases. 

DOJ Position: The DOJ responded on June 4 by filing a brief arguing that CBP cannot reliquidate or refund finally liquidated entries without importer-specific court relief. Based on CBP’s stated legal and operational limits, the IEEPA refunds were grouped into three categories: (1) CAPE-eligible unliquidated or recently liquidated entries (i.e., before 80 days post liquidation); (2) finally liquidated entries (i.e., those entries for which more than 180 days have passed since the liquidation date, placing them beyond both CBP’s 90-day voluntary reliquidation window and the 180-day protest period) for importers that filed suit; and (3) finally liquidated entries for non-plaintiffs, where the government contends the CIT lacks authority to order refunds under Trump v. CASA, Inc.

Federal Circuit Appeal/Stay: The DOJ appealed Judge Eaton’s universal refund order on June 2, and the Federal Circuit stayed the CIT order compelling CBP commissioner testimony in related stay proceedings (Judge Eaton also amended his order to the same effect). 

Class Certification: On June 4, an importer plaintiff moved for class certification covering all importers whose entries are not currently CAPE-eligible, potentially providing, if certified, a procedural path for non-plaintiffs to seek refund relief without separate lawsuits.

CAPE Phase: CBP has outlined the following anticipated schedule for subsequent CAPE phases.

• Phase II (~June 29): Enhanced capability for reconciliation-flagged entries. Once deployed, over 80% of IEEPA duties will be eligible for refund through CAPE.

• Phase III (~late July, approximately four weeks after Phase II): CBP has indicated that CAPE will expand to finally liquidated entries for importers that filed CIT lawsuits and the timing remains subject to further developments. For non-plaintiffs, CBP Executive Director Susan Thomas stated that CBP does not currently intend to refund finally liquidated entries while the broader reliquidation order remains on appeal but will comply with any final court order requiring reliquidation for all importers.

• Phase IV and Beyond (no date provided): Remaining categories, including drawback entries, reconciliation entries with a Type 09 on file, entries under administrative protest, and entries not filed in ACE.

And the Fox Says…: The government’s pending appeal and CBP’s current CAPE implementation position create continued uncertainty for importers with finally liquidated entries, particularly non-plaintiffs. 

While the two-year statute of limitations to appeal the IEEPA tariffs will begin to expire in the first quarter of 2027 for certain entries, the government’s appeal of the CIT’s universal IEEPA refund order is encouraging importers to consider whether there are benefits to filing a lawsuit before the first quarter 2027 deadline. Regardless of decisions on whether and when to file a lawsuit, importers should also continue to track liquidation and applicable 180-day protest deadlines. 

For importers looking to assess how these developments may affect their entries, or whether protective CIT action should be considered ahead of further CAPE developments, ArentFox Schiff is available to discuss these issues. 

Contributors: Nancy A. Noonan, David R. Hamill, Antonio J. Rivera, Mario A. Torrico, and Tyler J. Kimberly

2. Metals Tariffs Round Two: Further Modifications to the Section 232 Metals Framework

On June 1, President Trump signed a proclamation further adjusting the Section 232 metals tariffs, effective June 8. Just two months after the April overhaul — which moved to full-value assessment on covered metal products — the Administration is again recalibrating, offering targeted relief for certain equipment while expanding derivative product coverage and easing the US-content threshold.

Agricultural and Residential HVAC Equipment 

Combines, harvesters, and residential HVAC systems and components predominantly for residential use move from 25% into the temporarily-reduced 15% Annex III category, joining fixed industrial machinery and power equipment. 

Mobile Industrial Equipment (New Annex I-C) 

Bulldozers, forklifts, mobile cranes, and similar equipment receive temporary relief through December 31, 2027. Imports from jurisdictions with US trade deals (Japan, Korea, EU members, UK, Argentina, and others) qualify for a 15% “all-in” cap: where the Column 1 duty rate is at least 15%, no Section 232 duty applies; where it is lower, the Section 232 duty fills the gap to 15%. United States-Mexico-Canada Agreement (USMCA)-qualifying goods from Canada and Mexico pay 25% on non-US content only, with a floor of 15%. Commerce will issue guidance on assessing US content, and CBP may impose penalties for fraudulent claims. All other Annex I-C imports remain at 25%. 

Lower US Content Threshold and Newly Covered Derivatives

The “made entirely” threshold for the 10% US metals rate drop from 95% to 85% for aluminum, steel, and copper, broadening access to that preferred rate. As we noted in our prior alert on the April overhaul, the full US melt-and-pour exemption was replaced with a 10% rate, and the prior 95% bar was difficult for many products to clear. Finally, aluminum lithographic plates and steel racks are newly covered as derivative products and subject to a 25% rate.

And the Fox Says…: The June proclamation offers welcome, if uneven, relief. Importers should review classifications against the new Annex I-C, assess whether products can meet the lower 85% threshold, and prepare for newly covered lithographic plates and steel racks. Keep in mind that the Annex I-C and Annex III rates are intended to sunset on December 31, 2027, when building long-term supply chain strategies. 

Contributors: James Kim, Lucas A. Rock, and Andrew McArthur

3. Section 301 Actions to Watch: Brazil and Vietnam and Proposed Forced Labor Tariffs

As anticipated, a number of Section 301 actions were recently initiated that may result in tariffs that will replace the invalidated IEEPA and current Section 122 tariffs. The US Trade Representative (USTR) has issued two major Section 301 actions: a determination with proposed 25% tariffs on Brazilian goods and a new investigation into Vietnam’s intellectual property (IP) practices. The USTR also issued its notice of determinations in the Section 301 investigation concerning the failure of various economies to impose and effectively enforce a prohibition on the importation of goods produced with forced labor.

Forced Labor Investigation

On June 2, the USTR proposed the implementation of new tariffs (10-12.5%) based on its investigation related to the failure of 60 economies to impose and effectively enforce a prohibition on the importation of goods produced with forced labor. For more information, please see our overview here.

Brazil: Section 301 Determination

Overview

On June 1, the USTR determined that Brazil’s acts and practices across six areas are actionable under Section 301(b): digital trade, electronic payment services, unfair preferential tariffs, anti-corruption enforcement, IP protection, ethanol market access, and illegal deforestation.

Tariffs and Exemptions

The USTR proposes 25% tariffs on all Brazilian goods. Exemptions apply to informational materials, donations, accompanied baggage, articles, and parts subject to Section 232 tariffs, and certain Annex-listed products, including raw materials that if subject to the proposed additional tariffs could lead to the unavailability of domestic supply.

Vietnam: New Section 301 Investigation

Overview

On May 29, the USTR initiated a Section 301 investigation into Vietnam’s IP practices after designating Vietnam as a priority foreign country in its April 30 Special 301 Report. The investigation covers five grounds for investigation: online piracy, counterfeiting, inadequate border enforcement, unlicensed software use, and lack of criminal measures against cable and satellite signal theft.

Tariffs and Potential Action

No tariffs are proposed yet. The USTR proposes to find Vietnam’s practices actionable and is seeking comments on potential tariff and non-tariff measures.

Depending on final results, Vietnam could be subject to Section 301 tariffs related to the country specific investigation, forced labor, and overcapacity.

Timelines

And the Fox Says…: These actions reflect an escalating US trade enforcement posture and possible new tariffs to replace former tariff regimes. Importers of Brazilian goods and products of goods from the 60 economies listed in the forced labor import ban investigation should assess tariff exposure and review the list of exemptions. For Vietnam, while no tariffs are immediate, companies with IP-sensitive operations or Vietnam-based supply chains should monitor the investigation. We are also monitoring the developments in the Section 301 investigation on structural excess capacity and overproduction in manufacturing covering 16 economies. Companies should consider submitting public comments if they are impacted, as this may be the only opportunity to request that your Harmonized Tariff Schedule of the United States codes be exempt from new possible tariffs.

Contributors: Denny Peixoto, Lucas A. Rock, and Angela M. Santos

4. April and May in Review: FCA Enforcement Actions Targeting Customs Fraud

May saw a flurry of False Claims Act (FCA) enforcement actions targeting customs fraud, underscoring the DOJ’s aggressive use of the FCA as a trade enforcement tool. Coordinated through the interagency Trade Fraud Task Force established in August 2025, these actions span duty evasion schemes involving misclassification, undervaluation, and country-of-origin fraud. Below is a brief summary of each.

Perfectus Aluminum: $549.5 Million (Misclassification and AD-CVD Evasion)

On May 12, the DOJ announced that Perfectus Aluminum, Inc. and affiliated entities agreed to pay $549.5 million, one of the largest customs fraud settlements ever, to resolve allegations that they knowingly evaded antidumping and countervailing duties (AD/CVD) on aluminum extrusions imported from China. The defendants allegedly misrepresented over 2.2 million aluminum extrusions as finished merchandise exempt from AD/CVD orders by spot-welding them into pallet shapes. The settlement followed criminal convictions for fraud and a $1.8 billion restitution order, and resolved three consolidated qui tam suits, with whistleblowers receiving approximately $96 million. See our full alert on this settlement here.

Farjess and Royal Canadian Steel: $19 Million (Country-of-Origin Fraud)

On May 20, two Canadian steel companies, Farjess Inc. and Royal Canadian Steel Inc., along with their owner and president, agreed to pay $19 million to resolve allegations that they misrepresented the origin of flat-rolled steel manufactured in China, Indonesia, Italy, Turkey, and Vietnam as Canadian or American to avoid duties. The case was initiated by a customs broker whistleblower who will receive approximately $3.6 million.

Echelon Fitness: $2.1 Million (Undervaluation)

Announced in April, Echelon Fitness Multimedia, LLC settled for $2.1 million over allegations it used duplicate invoices to understate import values on fitness equipment by 25-30% and omitted the cost of computer tablets and LCD screens that were incorporated into the equipment from declared customs values. The case was brought by a former VP of Supply Chain and highlights the risk that insider whistleblowers with access to purchasing records and entry data pose to importers.

And the Fox Says…: These cases reflect a clear enforcement pattern. The DOJ is treating alleged tariff evasion as seriously as traditional procurement or health care fraud; whistleblowers throughout the supply chain are incentivized through monetary compensation to report; and importers face overlapping civil, criminal, and administrative exposure. Importers should treat customs declarations as high-stakes legal certifications and consider proactive compliance audits.

Contributors: Jackson David Toof, Nadia Patel, Mario A. Torrico, Andrew McArthur, and Isabella Wellinghorst

5. USTR Seeks Public Comments on AGOA Modernization: Opportunity for Retroactive Claims and Refunds Through August 2

On April 28, the USTR published a Federal Register notice inviting public comments on the modernization of the African Growth and Opportunity Act (AGOA). The current authorization for AGOA extends only through December 31. The USTR seeks comments regarding how the AGOA program can be modernized to benefit and protect US interests. Many have broadly urged the United States for a long-term renewal of the AGOA.

Background

The AGOA provides duty-free treatment for certain products from eligible sub-Saharan African countries. In a May 29 proclamation, the president also decided to designate Gabon as a beneficiary sub-Saharan African country.

And the Fox Says…: It is clear that the Administration is aiming to overhaul several trade programs, including the AGOA. With the AGOA’s current authorization set to expire at the end of 2026, this represents a critical window for stakeholders to engage in the future direction of US-Africa trade policy. Many companies rely on AGOA and received a reprieve when the program was temporarily extended in February, with retroactive claims allowed for the period from September 30, 2025, to February 3, 2026. Importers should review the most updated CSMS # 68987884 for the process to make retroactive claims before this window closes on August 2.

Contributors: Yusra H. Siddique, Lucas A. Rock, and Angela M. Santos

6. Made in Taiwan: United States Implements Section 232 Trade Deal With Taiwan

On May 28, the International Trade Administration and the USTR jointly published a Federal Register notice implementing key tariff elements of the recent US-Taiwan trade deal. The agreement stems from an executive order authorizing the Secretary of Commerce and the USTR to implement trade and security agreements addressing the concerns underlying Section 232 national security tariffs and the reciprocal tariffs imposed under IEEPA. Notably, while the US Supreme Court struck down the IEEPA tariffs in February, the Section 232 measures here are unaffected by that ruling.

Reflecting Taiwan’s unique political position, the notice implements a January 2026 memorandum of understanding (MOU) between the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office — the unofficial bodies representing US and Taiwanese interests. The changes took effect retroactively to May 1. They are part of a broader package in which Taiwanese enterprises committed to up to $250 billion in credit guarantees and $250 billion in new US investments in semiconductor, energy, and artificial intelligence production capacity. A separate reciprocal trade agreement signed in February is not yet in force.

The notice caps Section 232 duties at 15% for certain Taiwanese automobile parts, timber, lumber, and wood derivative products: where the Column 1 (MFN) rate is already 15% or higher, no Section 232 duty applies; where it is lower, the combined rate is capped at 15%. It also exempts Taiwanese civil aircraft components from Section 232 steel, aluminum, and copper tariffs, which is a significant carve-out, given those metals duties run as high as 50%. 

And the Fox Says…: These reductions create immediate supply-chain opportunities. Because they apply retroactively, importers should review recent entries for refunds through CBP, assess how the 15% cap interacts with their products’ MFN rates, and confirm eligibility for the aircraft-component exemption. 

Contributors: Maya S. Cohen, Collin M. Douglas, and James Kim

7. Tension as the July 1 Deadline Looms for USMCA Review

As we reported last month, the mandatory six-year USMCA review is set for July 1. On May 29, the United States and Mexico concluded the first bilateral round in Mexico City, covering automotive rules of origin, steel and aluminum trade, and economic security. A second round was scheduled for June 16–17 in Washington, DC, with agriculture added to the agenda, followed by a third round the week of July 20 in Mexico City.

President Trump told reporters on June 10 that he is “not looking to renew” the USMCA, stating “we don’t need anything that Canada has, we don’t need anything that Mexico has.” Officials and commentators expect no renewal by July 1, which would trigger annual reviews for 10 years in place of a 16-year extension.

Canada has not yet secured an official negotiating round with the United States, though some informal talks have started. Meanwhile, former Mexican USMCA negotiator Juan Carlos Baker suggested the United States and Mexico could forge “transitional agreements” to preserve market access in priority sectors, including autos, steel, aluminum, semiconductors, pharmaceuticals, and agriculture. This tracks with the US proposal to raise North American automotive content requirements to 82% and introduce a 50% US-content rule. US priorities from the initial round of negotiations with Mexico also included a desire to address the issue of foreign investment from China.

And the Fox Says… Trump’s rhetoric may sound alarming, but the USMCA will not vanish on July 1 — even without an extension, the agreement remains in force under annual reviews for another decade. The real action is in the bilateral tracks now taking shape, particularly US-Mexico “transitional agreements” that could lock in sector-specific market access. Companies with North American supply chains should track the proposed 82% content requirement and new 50% US-content rule, as these changes could reshape sourcing decisions. Canada’s exclusion from formal talks could create an uneven playing field. The bottom line: prepare for prolonged negotiation and engage with counsel now to assess how proposed rules-of-origin changes may affect your operations.

Contributors: James Kim and Tyler J. Kimberly

8. Section 122 Tariffs: Down, But Not Out

Section 122 litigation has moved from “watch this space” to “watch the Federal Circuit” — and recent signals have moved towards favoring the government. On May 7, the CIT struck down the Section 122 tariffs for certain plaintiffs, finding that “balance-of-payments deficits” had a historically specific meaning when US Congress enacted the statute — deficits measured by liquidity, official settlements, or basic balance — and that Proclamation 11012 did not identify a qualifying balance-of-payments deficit under that meaning. Instead, the CIT concluded, the proclamation impermissibly used trade and current-account deficits, along with related income-balance and investment-position metrics, to stand in for the statutory trigger. But the practical effect of that ruling is now frozen: On June 11, the Federal Circuit granted the government’s request for a stay pending appeal, meaning the CIT’s decision cannot be enforced while the Federal Circuit appeal remains pending, absent further order.

More notable than the stay itself is what the Federal Circuit said in its opinion. The court found that the government “is likely to succeed on the merits,” concluding that the legislative history “strongly call[s] into question” the CIT majority’s narrow reading of Section 122 and that there is “ample support” for the government’s broader interpretation. The court also rejected, at least for now, the challengers’ nondelegation argument, finding “merit to the federal government’s argument that Section 122 already contains the guardrails required by the nondelegation doctrine.” As for the remaining stay factors, the court agreed the government would suffer irreparable harm absent a stay — noting that an injunction has “important signaling value” that undermines the Administration’s use of Section 122 tariffs as negotiating leverage — and found that importers would not be substantially harmed because refunds with interest would reduce any injury if the tariffs are ultimately found unlawful. The public interest factor, the court said, favored neither side at this preliminary stage.

And the Fox Says…: While Section 122 expires at the end of July, based on the recent Federal Circuit ruling, it is possible that these tariffs will not ultimately be invalidated like the IEEPA tariffs, as many importers hoped. The Federal Circuit’s stay keeps the tariffs in place during the appeal, and the court’s favorable language on the merits is a meaningful headwind for challengers — even though the CAFC cautioned it has not reached a “final conclusion” on the CIT’s judgment. Importers should continue tracking Section 122-paid entries, liquidation dates, and protest deadlines. Even if the tariffs expire before a decision on the merits, the case may shape the outer limits of presidential tariff authority going forward, particularly as the government continues to rely on multiple trade statutes to preserve tariff leverage.

Contributors: Mario A. Torrico, Tyler J. Kimberly, Jake Haldeman, and Angela M. Santos

Additional research and writing from Isabella Wellinghorst and Jake Haldeman, 2026 summer associates in ArentFox Schiff’s Washington, DC, office.