Section 232 Steel and Aluminum Tariff Changes Announced
President Trump issued a proclamation on June 1, 2026, making several targeted changes to the Section 232 tariff framework for steel, aluminum, and copper products. The changes adjust tariff treatment for certain industrial equipment and downstream products while maintaining the broader Section 232 tariff structure established earlier this year.
One of the most significant changes is the creation of a new Annex I-C, which applies to certain mobile industrial equipment, including products such as forklifts, bulldozers, and other heavy equipment, through December 31, 2027. Products covered by Annex I-C will generally face a 25 percent tariff, although imports from countries with qualifying trade agreements may be subject to a 15 percent rate. Covered products that qualify as being made “entirely” from U.S.-melted-and-poured steel, U.S.-smelted-and-cast aluminum, or U.S.-processed copper are eligible for a reduced 10 percent tariff rate.
The proclamation also lowers the threshold used to determine whether a covered product is considered made “entirely” from U.S. steel, aluminum, or copper. Previously, at least 95 percent of the metal content had to be domestically produced; the new proclamation reduces that requirement to 85 percent. This change applies across the Section 232 metals tariff regime and is intended to make it easier for manufacturers to qualify for the lower tariff treatment while continuing to encourage the use of domestic metals.
In addition, the proclamation expands the list of derivative products covered under Annex I-B, adding items such as steel racks and aluminum lithographic plates, which will be subject to the Annex I-B tariff rate of 25 percent. At the same time, certain agricultural machinery and selected residential-use HVAC systems and components are moved from Annex I-B to Annex III, reducing their tariff treatment from 25 percent to 15 percent.
According to the administration, the changes are intended to encourage investment in U.S. manufacturing and increase the use of domestically produced steel and aluminum while preserving Section 232 protections for domestic metal industries. The revised tariff provisions take effect June 1 and remain in place through the end of 2027.
USTR Proposes New 10-12.5% Tariffs Following Forced Labor Investigation Findings
The Office of the U.S. Trade Representative (USTR) has released findings from a series of Section 301 investigations examining whether U.S. trading partners have taken adequate steps to prevent the importation of goods produced with forced labor.
The investigations, launched in March 2026, covered 60 economies and evaluated whether governments have adopted and effectively enforced prohibitions on goods made with forced labor. USTR concluded that each of the economies reviewed maintains policies or practices that are unreasonable or discriminatory and burden U.S. commerce, making them actionable under Section 301 of the Trade Act of 1974.
As a result, USTR has proposed imposing additional duties on virtually all imports from the affected countries. Under the proposal, imports from economies that have adopted forced labor import prohibitions, made commitments to implement such prohibitions under Reciprocal Trade Agreements, or established partial regimes to restrict certain forced labor goods would be subject to a 10 percent tariff. This group includes Canada, the European Union, Mexico, Pakistan, Argentina, Bangladesh, Cambodia, El Salvador, Guatemala, Indonesia, Malaysia, Taiwan, the United Kingdom, and Ecuador.
Imports from all other economies covered by the investigations would face an additional 12.5 percent tariff. USTR determined that these countries have failed to adopt and effectively enforce prohibitions on imports produced with forced labor.
According to USTR, the proposed duties are intended to address the competitive advantages gained through the use of forced labor and encourage trading partners to strengthen enforcement efforts. The agency noted that goods produced with forced labor can enter global supply chains and compete with products manufactured under market-based labor standards.
While the proposed action would apply broadly to imports from covered economies, USTR has proposed a number of exemptions. These include all products and parts already subject to Section 232 tariffs, as well as certain raw materials that could become unavailable if additional duties were imposed. The proposed exemptions also cover products that could cause broader economic disruptions if subject to the new tariffs, goods that cannot be produced or sourced in sufficient quantities in the United States, informational materials such as books, donations, accompanied baggage, and products for which additional duties are unlikely to contribute meaningfully to eliminating the practices identified in the investigations.
USTR is accepting public comments on the proposal through July 6, 2026, and has scheduled a public hearing for July 7. Following review, the agency will determine whether to modify, finalize, or withdraw the proposed action.
The forced labor investigations are one of several ongoing Section 301 initiatives launched this year. USTR is also conducting investigations into alleged structural manufacturing overcapacity and production practices in a number of foreign economies. The outcomes of these investigations could result in additional trade actions, including tariffs or other import restrictions.
USMCA Review Discussions Begin with U.S.-Mexico Talks
U.S. and Mexican officials concluded two days of discussions in Mexico City on May 29 as part of the review process for the United States-Mexico-Canada Agreement (USMCA). The meetings marked the first in a series of bilateral negotiating rounds announced by the two governments ahead of the agreement’s formal review.
During the talks, the United States proposed changes to the automotive rules of origin. According to reports, U.S. negotiators called for increasing the regional value content requirement for passenger vehicles and light trucks from the current 75 percent to 82 percent in order to qualify for preferential treatment under the agreement. The proposal would also require that 50 percent of a vehicle’s value be produced in the United States. For heavy trucks, the United States reportedly proposed increasing the regional value content requirement from 70 percent to 75 percent.
The discussions also covered steel and aluminum trade, economic security provisions, and measures related to preventing goods and investment from non-market economies from obtaining benefits under the agreement. Officials discussed supply chain and trade provisions affecting North American manufacturing and regional sourcing.
Canada did not participate in the talks, and reports indicated there was no discussion of Canadian content requirements in North American vehicle production.
The next round of negotiations is scheduled for June 16-17 in Washington, D.C. According to the Office of the U.S. Trade Representative, those discussions will focus on agriculture and issues related to maintaining a “level playing field” for trade. Additional negotiating rounds are planned through September.
DOJ Challenges CIT Order Requiring Broader IEEPA Tariff Refunds
The Trump administration is appealing a recent Court of International Trade (CIT) order involving refunds of tariffs that were imposed under the International Emergency Economic Powers Act (IEEPA). The dispute centers on whether importers that did not participate in the original lawsuits are entitled to receive refunds for duties paid on entries that have already been finalized by U.S. Customs and Border Protection (CBP).
On May 29, 2026, the Department of Justice (DOJ) informed the court that it plans to appeal Judge Richard Eaton’s order, which would allow refunds to extend beyond the companies that directly challenged the tariffs in court. The administration argues that refunds for finalized, or “liquidated,” import entries should be limited to importers that filed their own legal claims.
The appeal does not affect the broader refund process already underway. CBP will continue issuing refunds for unliquidated entries, entries that remain under agency control, and importers covered by specific court orders. The administration’s challenge is focused solely on finalized entries, which represent a large share of imports affected by the now-invalid tariffs.
The issue stems from the February 2026 Supreme Court decision that found IEEPA does not authorize the president to impose broad import tariffs. Since then, CBP has been working to return duties collected under the tariff program. However, questions remain about how refunds should be handled for importers whose entries became legally final before the courts ruled the tariffs unlawful.
The court continues to examine that question. In a May 27, 2026, order, Judge Eaton declined a request to excuse CBP Commissioner Rodney Scott from a June 9 status hearing, stating that the court needs information about how CBP plans to address the millions of finalized entries that remain unresolved. The outcome of the appeal could determine whether refunds are limited to companies that challenged the tariffs in court or are made available to a broader group of importers.
USTR Launches Trade Investigation into Vietnam
The Office of the U.S. Trade Representative (USTR) has initiated a Section 301 investigation into Vietnam’s intellectual property (IP) protection and enforcement practices, marking the latest in a series of new trade investigations launched by the Trump administration. The investigation was announced on May 29, 2026, following USTR’s decision in April to designate Vietnam as a “Priority Foreign Country” in its annual Special 301 Report, the agency’s most serious classification for countries with significant intellectual property concerns.
According to USTR, the investigation will examine whether Vietnam’s longstanding shortcomings in protecting and enforcing intellectual property rights are unreasonable or discriminatory and whether they burden or restrict U.S. commerce. The agency cited concerns involving counterfeit goods, online piracy, software licensing violations, theft of cable and satellite signals, and other enforcement issues that U.S. companies have raised for years.
Section 301 investigations can result in a range of remedies, including additional tariffs or other trade restrictions if USTR determines that a country’s practices unfairly burden U.S. commerce. The investigation follows a similar path to the Section 301 case against China launched in 2017, which ultimately led to tariffs on hundreds of billions of dollars in imports.
The intellectual property investigation is the third active Section 301 case involving Vietnam. USTR is already conducting investigations into Vietnam’s alleged failure to prohibit and effectively enforce a ban on imports produced with forced labor, as well as the country’s role in contributing to structural excess capacity and production in manufacturing industries.
Public comments on the investigation are due to USTR by July 2, 2026, after which the agency will determine potential next steps. A final determination is due by November 29.
EPA Heavy-Duty NOx Rule Revisions Under Review at OMB
A proposal to revise the Environmental Protection Agency’s (EPA) heavy-duty truck emissions program is currently under review at the White House Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA), the final step before a proposed rule is released for public comment. OMB began reviewing the proposal on May 20, 2026.
The rulemaking would amend portions of EPA’s “Control of Air Pollution from New Motor Vehicles: Heavy-Duty Engine and Vehicle Standards” rule, which was finalized in December 2022 and applies to model year 2027 and later heavy-duty vehicles and engines. The Biden-era rule established significantly stricter nitrogen oxide (NOx) emissions standards for heavy-duty trucks and expanded emissions-control requirements, including longer useful-life periods, extended emissions warranties, and enhanced maintenance obligations.
According to reports, EPA’s current proposal is expected to ease several of the program’s compliance requirements, particularly those related to emissions-control system warranties, useful-life provisions, and certain maintenance requirements. While details of the proposal have not yet been released publicly, the agency previously announced plans to reevaluate aspects of the 2027 heavy-duty NOx program amid concerns about vehicle costs and implementation challenges.
The 2022 rule was a key component of EPA’s Clean Trucks Plan and was designed to reduce NOx emissions from heavy-duty vehicles by more than 80 percent compared to prior standards. Industry groups have argued that the combination of tighter emissions limits, extended warranty requirements, and longer useful-life standards could substantially increase the cost of new diesel trucks, while supporters maintain the rule is necessary to improve air quality and public health.
Following completion of OMB review, EPA is expected to publish a proposed rule outlining the specific changes under consideration and open a public comment period before any revisions can be finalized. No timeline for publication has yet been announced.
Labor Department Holds Civil Penalties Steady for 2026
The U.S. Department of Labor (DOL) has announced that its civil monetary penalties will remain unchanged in 2026. The decision affects penalties administered by several DOL agencies, including the Occupational Safety and Health Administration (OSHA), the Wage and Hour Division, and the Mine Safety and Health Administration.
Federal law generally requires agencies to adjust civil penalties annually to account for inflation. However, the Department said it was unable to make the required calculation for 2026 because inflation data for October 2025 was not available. The Bureau of Labor Statistics did not publish the October 2025 Consumer Price Index (CPI-U), the inflation measure required by law for the annual adjustment, due to the federal government funding lapse that temporarily disrupted agency operations. Because the statute specifically requires the use of that data and does not provide an alternative calculation method, DOL determined that no inflation adjustment could be made for 2026.
As a result, penalty amounts that took effect in 2025 will remain in place throughout 2026. For example, OSHA’s maximum penalty for serious violations will remain $16,550 per violation, while the maximum penalty for willful or repeated violations will remain $165,514 per violation.
While no increase will occur in 2026, employers remain subject to the current penalty levels, and annual adjustments are expected to resume when the required inflation data becomes available.
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