It was another newsworthy series of days for international trade and tariffs. Here's the latest, compiled by the PRI Washington, D.C., office:

A major court ruling. A federal appeals court ruled that the tariffs President Trump imposed under the International Emergency Economic Powers Act (IEEPA) are unlawful and exceed IEEPA's authority. The 7-4 ruling takes effect on October 14, giving the Trump administration time to appeal the decision to the U.S. Supreme Court.

If upheld, the ruling could:

● Require the federal government to repay businesses for IEEPA tariffs previously collected. Click here for a link to country-by-country tariff rates.
● Impact trade deals that the Trump Administration has struck with the European Union, Japan, South Korea and other major trading partners that provide reduced reciprocal tariff rates on their imports (compared to the tariff rates the President first proposed in April).
● Impact IEEPA tariffs imposed on China, Canada and Mexico, including: 
                    ➔ Canada (EO 14193) and Mexico (EO 14194): 25% tariff for goods that do not claim or qualify for USMCA duty-free preference, and a 10% tariff for energy and potash imports that do not claim or qualify for USMCA duty-free preference. 
                    ➔ China (EO 14195): 20% tariff for all goods from China. 

Canada Acts on Retaliatory Tariffs on United States Exports

Canadian Prime Minister Mark Carney in late August announced that Canada will remove many of its retaliatory tariffs on American goods in an effort to align Canada's tariff regime with United States exemptions under the United States-Mexico-Canada Agreement (USMCA). The changes were effective September 1, although tariffs on American steel, aluminum and automobiles remain in place. However, automotive parts that comply with USMCA remain tariff free.

Canada continues to apply a 25% tariff on non-USMCA-compliant American vehicles. In addition, even vehicles that qualify under USMCA can face a 25% duty on non-Canadian or non-Mexican content. These tariffs were adopted as countermeasures to American trade actions earlier this year and remain in force pending further negotiations.

On the United States side, automobiles and certain categories of auto parts imported from Canada and Mexico are subject to a 25% tariff unless they qualify under USMCA. USMCA-compliant parts remain tariff-free, but the U.S. Department of Commerce has indicated that tariffs may eventually be calculated only on the non-United States content within otherwise compliant goods.

The announcements followed a phone call between President Trump and Prime Minister Carney, during which both sides discussed trade, security and the potential for renewed negotiations. Canada's move was described as an effort to de-escalate tensions and preserve a framework for future talks.

More Clarity on Derivative Tariffs, Stacking

The U.S. Department of Commerce recently expanded Section 232 to cover 407 additional steel and aluminum derivative products, which are subject to a 50% tariff on their metal content. When looking at the potential impact of this increased tariff, it's important to look at "tariff stacking," which outlines below how it works. Executive Order 14289 (April 2025) and subsequent CBP guidance created a hierarchy to reduce overlap on Section 232 duties--especially in autos and metals--while leaving most other tariffs cumulative.

1. Automobiles and Auto Parts: Highest priority; if these tariffs apply, no other Section 232 or IEEPA duties attach to the same product.
2. Aluminum: Applies only to the aluminum content; non-aluminum components can still face lower-tier tariffs.
3. Steel: Same principle as aluminum: duty covers steel content only, with other materials potentially subject to additional tariffs.
4. IEEPA Canada and Mexico:
                    ➔ These tariffs only apply if the auto/auto parts, aluminum and steel tariffs do not.
                    ➔ USMCA-qualified articles are exempt from IEEPA tariffs.

Outside this hierarchy, rates, global surcharges, Section 301 (China) and reciprocal tariffs generally stack, often pushing cumulative duties for China-origin goods above 40–70. Accurate HTS classification, supply-chain mapping and mitigation strategies (e.g., tariff engineering or shifting origin) are now essential to control landed costs.

HTS Codes Related to Automobiles Impact by Derivative Item Tariffs

Below is a running list of Harmonized Tariff System (HTS) codes in the motor vehicle space that are subject to derivative tariffs. Note: some vehicular tariffs are for agricultural equipment components.

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