Global trade in 2026: An update on tariffs and key policy shifts

While much of Washington and the world await the ruling from the U.S. Supreme Court on President Trump’s global reciprocal tariffs imposed under IEEPA, the Office of the U.S. Trade Representative (USTR) continued to negotiate under the cover of tariffs still in place.

Throughout November and into December, Washington collaborated with China, South Korea, the United Kingdom, and Switzerland, as well as other countries, while also launching an internal review of the U.S.-Mexico-Canada Agreement (USMCA).

These developments signal a complex year ahead for importers and businesses as they navigate an evolving system of duties and trade agreements.

Here’s what you need to know about the latest updates on tariffs:

The IEEPA ruling

The U.S. Supreme Court will determine whether the President acted within the scope of the International Emergency Economic Powers Act (IEEPA) when imposing broad tariffs on multiple U.S. trading partners. However, the timing of that ruling is currently unclear. 

Lower federal courts have previously concluded that the administration exceeded its statutory authority under IEEPA, and the Supreme Court is now reviewing those decisions on appeal.

If the Court ultimately rules that the tariffs were unlawful, the federal government could be required to issue an estimated $133 billion in refunds to affected importers.

Tariffs on China  

The U.S. and China in November agreed to a one-year détente, with Washington lowering the 20% “opioid” tariffs on Chinese imports to 10% until November 10, 2026. This rate is still combined with any applicable Section 301 intellectual property tariffs and Section 232 tariffs applied to:

• Steel
• Aluminum
• Copper
• Autos and parts
• Medium, heavy-duty trucks and parts

In addition to the tariff reduction, the U.S. is also suspending the fees on Chinese-built, operated or owned vessels that had been in effect since October 2025.

South Korean automotive tariffs

The deal with South Korea reduces tariffs on autos and parts to 15% and lowers rates on certain pharmaceuticals and aviation components. In return, South Korea agreed to remove the 50,000-unit cap on U.S. vehicle imports meeting U.S. safety standards and streamline emissions certification for U.S. vehicle exports.

Swiss industrial machinery tariffs

Switzerland, a source of precision industrial machinery to the U.S., is negotiating an agreement that may result in Washington lowering the 39% tariff on Swiss imports to 15% by the end of the first quarter of 2026.

U.K. tariff relief

Under the new U.S.–U.K. pharmaceutical and medical technology trade agreement, the United States has committed to providing significant tariff relief and trade protections to the United Kingdom in exchange for reforms to British drug‑pricing policies.

This is a significant shift from earlier White House considerations of imposing extremely high duties on these products (previously discussed at rates up to 250%). The official announcement states that these U.K.-origin goods will be fully exempt from Section 232 tariffs.

Under the U.K. agreement, the U.S. agreed to exempt U.K.-origin pharmaceuticals, pharmaceutical ingredients and medical technology from Section 232 tariffs and any future 301 tariff action.

New exemptions on agricultural imports

Additionally, action was taken on November 14 to exempt nearly 250 agricultural imports from the IEEPA tariffs, including certain:

• Coffee
• Tea
• Fruits
• Nuts
• Cocoa
• Bread
• Spices

These exemptions are intended to lower import costs and limit the rising food prices for items that Americans cannot produce domestically. The full list of exemptions is included in Annex II. 

USMCA review 

In early December, the USTR held a three-day hearing on the USMCA, with over 100 witnesses providing testimony on the agreement following 1,551 public comments submitted in November 2025.

The U.S., Mexico, and Canada must declare their intention on July 1, 2026, whether to remain in the USMCA, to withdraw from the agreement or to seek changes. This July 1, 2026, review is a sunset check-in that could lead to the agreement’s termination in 10 years if parties don’t agree to extend.

Public comments by officials in Washington indicate that the U.S. increasingly prefers to negotiate separately with Canada and Mexico. Additionally, the U.S. is expected to push for stricter rules of origin in the automotive and steel industries to prevent China from using Mexico or Canada as a backdoor to the U.S. market.

What businesses can do next

For companies impacted by tariffs, consider these strategic next steps:

• Reassess North American sourcing and production: Evaluate where your components and finished goods are produced, especially those sourced from Canada and Mexico. If the rules of origin tighten, products that currently qualify for duty-free status under the USMCA may become fully dutiable in the coming years. Now is the time to review your bill of materials, supplier footprint and production routing to help ensure you maintain sufficient North American content.
• Prepare for potential IEEPA tariff refunds: If the Supreme Court rules that the IEEPA‑based tariffs were unlawful, businesses that imported affected parts, materials or finished goods may be eligible for refunds. To position yourself for a smooth refund process, begin compiling documentation of all duties paid under these tariffs.

How Wipfli can help

Take control of your tariff and trade exposure before the landscape shifts again. Wipfli’s specialists can help you assess your current risks, model potential cost impacts and build a forward‑looking strategy that strengthens your business.  

If you’re ready to protect margins and stay ahead of upcoming regulatory changes, explore how our tariff and trade team can support you.

Read more:

• 2026 manufacturing trends: adapting to tariffs and costs
• How businesses can navigate tariff uncertainty and costs
• Building a smarter sales strategy