What needs to be known
The U.S. Section 301 tariffs should be regarded as the new floor, not a temporary measure. Unlike the reciprocal tariffs, these tend to be procedurally robust as well as court-tested. Tariffs continue to persist beyond administrations. The window for both countries & companies to engage appears to be narrowing significantly.
Digital trade frameworks seem to be fragmenting in real time. The end of the World Trade Organization‘s (WTO) eCommerce moratorium and the U.S. not joining the eCommerce Agreement (ECA), along with the upcoming Association of Southeast Asian Nations‘ (ASEAN) Digital Economic Framework Agreement (DEFA), show how digital trade rules are breaking into different overlapping groups and regional agreements.
Timelines for international trade may be compressed. They are expected to be much tighter than they may appear. Section 232 tariffs for pharmaceuticals, semiconductors, as well as critical minerals may be announced as early as July ’26. These may no longer be distant regulatory risks but instead imminent operational decisions.
On the horizon
The United States-Mexico-Canada Agreement (USMCA) review will reshape North American supply chains, irrespective of the outcome. Given Canada’s explicit trade diversification pivot, Mexico’s fragile de-escalation strategy with Washington, as well as the U.S. administration’s preference for bilateral leverage, a straightforward renewal may be unlikely. Enterprises with integrated North American supply chains, especially in automotive and agriculture as well as manufacturing sectors, may develop contingency plans for potential annual reviews. This is in addition to the possibility of the agreement fragmenting into bilateral agreements.
Attention may focus on whether U.S. President Donald Trump, besides Chinese President Xi Jinping, may renew their truce covering Chinese goods. Additionally, there are rare-earth export controls and agricultural purchases that are set to expire in November 2026. Even though the leaders’ summit is confirmed for May 14-15, 2027, its outcomes remain uncertain. These factors may determine the likelihood of an extension. Enterprises may need to prepare for significant supply chain disruptions.
The Asia Pacific Economic Cooperation (APEC) leaders’ summit in China, along with the Group of 20 (G20) leaders’ summit in Miami, may signal the direction of major power alignment in trade governance, which could define the operating environment after 2026.
Sector overview & forecast
Tariff uncertainty may remain the norm.
Section 232 investigations & semiconductors
The post-International Emergency Economic Powers Act (IEEPA) tariff landscape may be an active transition. Following the Supreme Court’s ruling in February ’26, which invalidated all IEEPA-based tariffs, the Trump administration speedily prepared a replacement architecture centered on 3 statutory pillars: Section 122 of the ‘74 Trade Act (10% tariff expiring on 24 July ’26); Section 232 of the ‘62 Trade Expansion Act (sector-specific with national security burden, with no rate caps); and Section 301 of the ’74 Trade Act (country & practice-specific with no rate caps).
The Section 122 tariff applies globally to most imports, although goods already subject to Section 232 tariffs, such as steel, aluminum, copper, and autos, are excluded. The U.S. Trade Representative (USTR) has already accelerated Section 301, given Congress’s low likelihood of approving extensions for these tariffs. Investigations cover 16 economies for excess manufacturing capacity besides 60 economies for forced labor practices. The investigation is timed to coincide as well as produce findings that result in tariffs at or before the Section 122 tariffs expire. Legal challenges are unlikely to provide relief during ’26.
The U.S. Court of International Trade ruled on 7 May ’26 that the use of Section 122 was unlawful. The court only immediately blocked the U.S. administration from enforcing the tariffs against the two enterprises that sued. Washington State made it clear that it wasn’t using a ‘universal injunction.’ Claims from more than 20 other states were dismissed on jurisdictional grounds. The courts ruled that they weren’t direct importers. The administration may likely appeal this ruling. That process may prevent other enterprises from taking any further action. If the court upholds the decision, it may take time to issue refunds to the plaintiffs. That’s given the procedural complexity involving the issuance of the IEEPA tariff refunds.
