Price on Trade: 2026 another year of rapid change with IEEPA, USMCA, WTO

As we move into 2026, it’s time to look forward. While the “Donroe Doctrine,” Venezuela, and Greenland absorb significant press attention, important trade developments will also continue to make headlines this year. The unprecedented changes we saw in 2025 will continue in 2026, particularly in the areas of IEEPA and tariffs, USMCA, and the WTO.

IEEPA and tariffs

Those of us clicking “refresh” on the Supreme Court’s opinions page last Friday were disappointed to find out that we will have to wait a little longer for the International Emergency Economic Powers Act (IEEPA) tariff decision. The anticipation for US companies (and their trade lawyers) will continue to build until at least next Wednesday, when the Supreme Court could issue the next batch of opinions.

The IEEPA opinion release date is not the only unknown swirling around the decision. The immediate concern for many importers is how a decision striking down IEEPA tariffs would impact refunds. Confusion surrounding the refunds is legitimate if the Court invalidates the IEEPA tariffs. The US government has previously been required to issue refunds after a court’s decision, but there has never been a duties case on the scale of the IEEPA tariffs. Despite the far-reaching implications of a potential reversal, the issue of refunds was barely discussed at the Supreme Court’s oral argument in November. This may mean the Court plans to leave the issue for the Court of International Trade (CIT) to decide if the IEEPA tariffs are overturned. And, as we focus on refunds, the administration will rapidly implement the “Plan B” measures discussed below. 

The longer we wait for a decision, the more importers will find the clock running out on their suspended entries. In recent weeks, US Customs and Border Protection has begun liquidating IEEPA duties (initially mostly “fentanyl” duties on China, but not exclusively), and hundreds of importers have filed cases asking the Court of International Trade to prevent liquidation. While administration officials have indicated they will issue refunds if the Court strikes down the IEEPA tariffs, those companies filing protective cases are concerned that it will not be possible to protest IEEPA duties through CBP’s usual process. Whether this is a valid legal argument is open to debate, but debate is enough to create a mini stampede to the CIT. The flood of these cases highlights the anxiety importers feel about how the Supreme Court’s decision would be procedurally implemented. For its part, the CIT has issued a blanket order staying all these cases. Of course, the possibility of refunds assumes the Court does erase the IEEPA tariffs wholesale.

If IEEPA tariffs remain in place, expect the administration’s negotiating posture to be strengthened, backed by this Court-approved leverage. But if IEEPA is struck down, no one expects a return to pre-Trump tariff levels and free trade. Most trade experts anticipate that the administration may quickly issue new tariffs. Section 122 of the Trade Act of 1974 allows the president to impose tariffs up to 15% for up to 150 days without Congressional approval. The administration could use this time to issue new industry-specific Section 232 investigations or country-specific Section 301 investigations. Section 338 of the Tariff Act of 1930, a very old and dormant statute, could also be used as a county-specific backstop to apply tariffs up to 50%.

In addition to any new investigations, several open Section 232 investigations are expected to reach final decisions soon. Of particular interest to steel and aluminum producers, the administration has not yet released its report or decision in the Section 232 investigation into critical minerals—a category that includes aluminum, boron, chromium, manganese, and nickel, among others.

In the end, an adverse Supreme Court ruling will not change US government policy. It will result in billions of dollars in refunds and a lot of work for lawyers as the administration issues them and implements Plan B.

USMCA

Formal review of USMCA begins July 1 of this year, and USTR has already solicited extensive feedback from US industries. We anticipate this will be a fundamental renegotiation of the agreement.

As we have previously written, there are many areas of USMCA that need to be reworked. Ensuring that Mexico (and to a lesser degree Canada) does not continue to be a transshipment point for the world’s steel oversupply, including in the form of steel-containing products, is at the top of the list. Most of the Chinese export shift of steel-containing products to third countries is unrelated to actual consumption in those countries. It is further evidence of “legal” and illegal tariff evasion involving the manipulation and processing of products, including steel, to change countries of origin to reduce tariff exposure. These tariff evasion schemes must be addressed in the USMCA and more broadly. Likewise, US negotiators must tackle the distortive effects of so-called “green subsidies” and massive bailout subsidies propping up certain Canadian steelmaking capacity (effectively maintaining and expanding excess capacity) that is ultimately directed towards the United States.

Underlying all these developments is the continued resurgence of Chinese steel exports. China’s own internal economic weakness has caused Chinese producers to turn to export markets. This familiar phenomenon will soak up demand in those markets and displace production. US trade policy will need to remain focused on ensuring the secondary and tertiary impacts of Chinese oversupply do not harm US producers.

The WTO and the end of US support for MFN trade principles

Why even bother discussing the WTO? In many respects, the US began a long process to reduce the WTO’s relevance when it crippled the dispute-resolution process in Trump I. But the US sent the WTO a major communique in late December that fundamentally expands its challenge to most-favored-nation (MFN) trade-negotiating principles.

MFN principles are at the core of the GATT and the WTO, and the United States’ challenge aims at the root of the broken global trading system. MFN policies anticipated that member states would undertake market-based reforms as a predicate for receiving equal tariff treatment. Clearly, not all member states have transitioned to market-based economies, yet they have reaped all the benefits awarded to those countries that played by the rules. And, as the communique points out, the MFN requirement to apply the same tariff treatment to all WTO members prevents individual countries from engaging in mutually advantageous negotiations.

In the communique, the US highlights several other issues for reform: (1) the need for greater negotiating flexibility, (2) limiting instances where certain countries receive carveouts from generally applicable rules, and (3) ensuring that member countries live up to their obligations to institute market-based economic systems and comply with notification procedures.

Ultimately, the communique concludes that other member states are fundamentally unwilling to address promised reforms. This has led to a global system that is irreparably imbalanced and rewards those nations that recklessly amass production capacity at the expense of other members, most often through non-market means. The United States’ pointed opposition to the WTO’s operations and MFN policies points to the end of the post-World War II international trade system. Absent an announcement of radical reform following the WTO’s March 2026 ministerial conference, the WTO could become a zombie international organization. While not a headline-grabber in the popular press, the opening for meaningful reform may narrow substantially this year, with significant, unknown, positive and/or negative consequences for various countries and companies.