Perhaps in light of the focus on the war with Iran, the Trump Administration’s tariff activity was light last week. However, President Trump did threaten to impose 50% tariffs on countries supplying arms to Iran. As one of Iran’s major weapons suppliers, China would be most significantly impacted by this policy. Although the authority for such tariffs remains unclear, it should be noted that the so-far unused Section 338 Tariff Act of 1930 provides for duties up to 50%.
The trade relationship between the United States and China will face increased scrutiny and focus as the May 15, 2026 date for the postponed summit between President Trump and Chinese President Xi approaches. It remains to be seen how each will play their cards, but both face political challenges in their respective countries and a major trade breach would not serve either country’s best interests. The roller-coaster relationship between the two counties since last year is well-detailed here. The four pending Section 301 investigations grant the Administration potential leverage, but China has initiated its own counter trade inquiries, creating some uncertainty before the summit.
The Administration was back before the Court of International Trade (CIT) last week for a hearing on a legal challenge to the Section 122 10% duties. The oral arguments presented awkward moments for both sides as the Administration had taken a prior position in the IEEPA challenge that Section 122 did not apply to trade deficits, and the plaintiffs the CIT’s rationale in striking down the IEEPA duties that Section 122 was a viable alternative. Unlike with the IEEPA challenge, however, court observers believe that this time the Administration is likely to prevail. The point might be moot, however, as a decision likely will not be issued before the Section 122 duties expire in July.
Customs and Border Protection released guidance on the implementation of the forthcoming CAPE system to process IEEPA refunds, set to launch on April 20, 2026. Details may be referenced here.
Last week, the administration also issued an Executive Order in the Federal Register confirming the suspension of the de-minimus tariff exemption for small purchases. According to the Order, these shipments are subject to duties as part of the Section 122 10% duties now in effect.
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