In contrast to the recently announced new Section 301 and 338 duties, last week, there were no major tariff developments. Instead, affected countries continued to evaluate their responses. Brazil responded forcefully to challenge the Section 301 duties by filing a consultation request to the World Trade Organization. While the ultimate efficacy of this challenge is questionable, the Administration continues to escalate its actions against Brazil. Last week, President Trump issued a declaration continuing for one year the National Emergency with respect to Brazil that was established on July 30, 2025.
Canada is also evaluating its response to the Section 338 duties imposed on it as the Administration appears to be negotiating with Mexico to refine an agreement that would marginalize Canada. Canadian Prime Minister Mark Carney is walking a tightrope to respond to the situation without making it worse, and it remains to be seen if this will lead to the successful resolution of disputes over dairy and alcohol products and retaliatory tariffs. We continue to monitor the situation for any action that would result in duties being applied to USMCA-compliant products.
Congress remains ambivalent regarding the President’s tariff actions; in many quarters, leveling heavy criticism, followed last week by the Senate advancing the late Senator Lindsey Graham’s bill to significantly increase tariff authority related to countries doing business with Russia. The legislation would authorize President Trump to impose tariffs of up to 100% on the five largest purchasers of Russian oil and natural gas, as well as on countries found to be helping Moscow evade energy sanctions. It would also extend the Iran Sanctions Act through 2031, preventing its expiration this year, and authorize tariffs of up to 500% on Russian goods imported into the United States. 86 Senators supported the bill, in stark contrast to the Trade Review Act of 2025, which would fundamentally reclaim congressional authority over tariffs and has garnered only 13 supporters.
Meanwhile, last week United States Trade Representative Jameison Greer asserted that the new tariffs will not have a negative impact on the economy. He took the position that the new tariffs are similar to the expired Section 122 duties to which, arguably, the economy has largely adapted. Part of that adaptation, however, appears to be some countries' shift of production back to China. Further undermining Secretary Greer’s argument is the lackluster 1.5% GDP growth last month, and inflation at 3.5% (well above the Federal Reserve’s preferred 2% target), along with an expanding trade deficit.
Last Thursday, the National Association of Wholesaler-Distributors (NAW) filed a federal lawsuit in Colorado challenging that state’s extended producer responsibility program and arguing that its rigid fee-setting rules and lack of oversight are unconstitutional.
NAW claims that Colorado's EPR law violates the 14th Amendment’s Due Process Clause by:
1. Delegating government fee-setting authority to a private entity, Circular Action Alliance (CAA), without sufficient standards nor oversight; and
2. Barring businesses from challenging CAA decisions in court
NAW argues that the statute violates the First Amendment by:
1. Forcing businesses to join and fund the CAA as a condition of operating in Colorado;
2. Prohibiting businesses from disclosing the mandatory fees to their own customers: and
3. Allowing CAA to spend mandatory member dues on political and policy advocacy that businesses might not support
Along with its complaint, NAW filed a motion for a preliminary injunction, seeking to block enforcement of the EPR law while the case proceeds. NAW previously won a preliminary injunction in a separate EPR lawsuit in Oregon earlier this year, blocking the Oregon Department of Environmental Quality from enforcing its EPR law against certain NAW-member companies. These rulings will also have implications for broader EPR action as California moves forward with its textile EPR law.
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Disclaimer from Progressive Trade Consulting: PTC is not a law firm, does not practice law, and does not provide legal advice. The Client should consult legal counsel for any legal matters, including trade compliance. The Importer of Record (IOR) is responsible for complying with customs regulations and managing the import process. This includes obtaining required licenses and permits, classifying and valuing goods correctly, declaring goods accurately, paying duties and taxes, following import rules, and maintaining proper records.