Trade & Tariff Update #46 - E.U. Carbon Border Tax, Low-Value Shipments & More

Court of International Trade Certifies Class in IEEPA Action  

Last week, the Court of International Trade approved class action status for Plaintiff Freestyle World, Inc. (“Freestyle World”) seeking refunds for IEEPA tariffs on behalf of itself and the proposed class.  The result of the CIT’s decision is that all importers who have not separately filed an action to recover IEEPA tariff payments will be bound by this case’s resolution, including if the case is settled.  Importers should evaluate the total amount of IEEPA refunds they are owed to determine whether filing a separate action is warranted.  Although (if granted) the proposed relief would entitle class members to recover IEEPA duties paid on all entries, including finally liquidated entries, any potential settlement may reduce that amount.  

Administration Official Dangles Tariff Threat Over European Trade Sanctions/Boycotts

Speaking last Tuesday, assistant United States attorney general Harmeet Dhillon criticized the Boycott, Divestment, Sanctions (BDS) movement against Israel and said that any country engaging in bans on goods produced in illegal West Bank settlements “is going to risk – while President Trump is in power – retaliatory or corresponding sanctions.”   Such a threat of tariff action against the U.K. over its sanctions against Israel is a departure from the Administration’s previous position not to criticize the boycotts and would challenge the trade deal currently in place.  However, unless formalized, this threat might join numerous others yet to result in concrete action.

USTR Invites Comments on E.U. Carbon Border Tax 

According to its post in the Federal Register last week, the Office of the United States Trade Representative (USTR) is inviting comments:

regarding the current and potential impact of the European Union's (EU) Carbon Border Adjustment Mechanism (CBAM) on U.S. producers, including small- and medium-sized producers; workers; U.S. direct and indirect exports; and overall U.S. trade with the EU. Under CBAM, EU importers of products covered by the CBAM (covered products) in the aluminum, cement, electricity, fertilizer, hydrogen, and iron and steel sectors are required to declare information on carbon dioxide and other specified greenhouse gas emissions generated in the production of imported goods and to purchase CBAM certificates based on the amount of that embedded carbon. The EU began the full implementation of CBAM on January 1, 2026. The EU is also considering legislative proposals to expand CBAM coverage to downstream steel- and aluminum-intensive products. USTR is seeking comments on the impact of the CBAM on U.S. trade with the EU, as well as the potential impact of the EU's proposals to expand CBAM coverage. Such comments will help inform continued USTR and U.S. government engagement with the EU on CBAM.  

China 301 Tariffs from First Trump Term Continued 

In May 2026, the USTR requested comments on the continuation of Section 301 actions from the first Trump Administration.  Last week, it published a notice in the Federal Register indicating that sufficient comments had been received to allow the actions to continue.  The notice indicates that a separate comment period on the effectiveness of the actions will be opened later. The notice can be read here. 

Low-Value Shipments

Following up on the suspension of the De Minimis Exemption elimination for items less than $800, on October 8, U.S. Customs and Border Protection (CBP) launched a comment period regarding the proposed rule to modify filing requirements for informal entries of goods valued at $2,500 or less and to establish a new electronic informal entry type for merchandise entering through the mail environment. Also proposed in the Federal Register notice are other related changes, such as mandating an additional data element for carriers regarding mail shipments and establishing bonding requirements for certain informal entries. This would impact importers bringing in products through commercial shipping and mailing services up to the $2,500 threshold. Click here to read the Federal Register notice announcing the proceeding and comment deadlines.

Trade Policy Roller Coaster 

Evaluating the impact of the administration’s trade policy based on data remains difficult.  According to one report last week (analyzing U.S. Census Bureau data released October 6), U.S. trade is on track to top $6 trillion in 2026, driven by record-setting growth in gold, oil and gasoline exports.  U.S. trade rose an above-average 8.12% to $4.05 trillion through August, marking the first time total U.S. trade surpassed $4 trillion in the first eight months of a year.  Exports are up 14.74% to a record $1.64 trillion, while imports increased 4.05% to a record $2.42 trillion.  On the year, the U.S. trade deficit decreased 13.06% from the same period in 2025 to $775.71 billion.  Regardless, the trade deficit is expected to exceed $1 trillion for the sixth consecutive year. 

In contrast, another report indicates that although the Administration’s tariff policy was intended to shrink the trade deficit, imports reached a record high.  The pattern of conflicting data continues, providing ammunition to both the Administration and its critics and possibly indicating that tariffs are neither killing the economy nor leading to a domestic manufacturing explosion.  How policymakers in Washington will respond remains an unknown.  There are signs that Democrats are preparing a legislative agenda to revoke or at least rein in tariffs.  Introduced by Sen. Ron Wyden, the Congressional Trade Review Act of 2026 (S.5081) would require Congressional approval of all new presidential tariffs.  Congressional response to this bill is still pending, but the very similar Trade Review Act of 2025 (S.1272) has only 13 cosponsors since April 2025, and Sen. Wyden is not among them. 

 Tariff Authorities Overview

The Congressional Research Service (CRS) has issued a helpful overview of active presidential tariff actions for 2026.  It can be viewed and downloaded here. 

Disclaimer: APPA does not make any representations about the completeness, suitability, or adequacy of the information provided during the Office Hours or Trade Talks.   Any information provided are intended for general informational purposes only, they do not constitute a recommendation or solicitation to do or omit to do any action and should not be interpreted as legal, regulatory, or compliance advice. You should seek independent advice from qualified professionals before acting on any information provided and/or to evaluate specific regulatory obligations and operational decisions.
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.