Tariff Watch: The Newest US Trade Policy Moves and Who They Affect

October 22, 2026 | ATN Trade & Finance

The US tariff landscape is simultaneously expanding, being contested in court, and — in two significant cases — showing early signs of negotiated retreat. This week's watch covers the moves that matter most for importers right now: a court-certified class action that could unlock $30 billion in IEEPA refunds, the global Section 301 forced labour tariff that replaced the Section 122 surcharge in July, the official continuation of Section 301 duties on China, Section 232's expansion into pharmaceuticals, and nascent deal talks with China and India.

IEEPA Refunds: Class Action Certified, $30 Billion Still at Stake

The most consequential legal development of the month came October 8, when the US Court of International Trade certified a class action covering importers who paid duties under the International Emergency Economic Powers Act (IEEPA) between February 1, 2025 and February 19, 2026. The Supreme Court struck down those tariffs in February 2026, and CBP has since processed approximately $126 billion of the roughly $166 billion collected — leaving an estimated $30 billion potentially unrecovered.

The class action, Freestyle World, creates a collective route to recovery without requiring individual lawsuits — a meaningful opening for smaller importers who lack the resources to litigate independently. Importers already pursuing their own suits are excluded from the class. Critically, the certification is not a refund order: the US government is appealing the court's authority to order refunds on finally liquidated entries, and analysts say the class process could extend into spring or summer 2027.

CBP's CAPE Phase 3 refund program launched October 6, the same week as the class certification, opening a parallel administrative channel. Importers in the relevant window should confirm liquidation status, verify whether they fall within the class, and consider a protective individual suit under 28 U.S.C. § 1581(i) if large balances are at stake — the two-year accrual clock does not pause automatically for class members.

Section 301 Forced Labour Tariffs: The New Global Baseline

On July 24, 2026 — the same day the Section 122 10% global surcharge expired — a new Section 301 forced labour tariff took effect, covering approximately 60 trading economies. The rate structure is more complex than its predecessor. Flat 10% duties apply to Canada, India, Mexico, Bangladesh, Indonesia, Malaysia, the UK, and a dozen others. The European Union and Taiwan face a 10% minimum net of their MFN rate, meaning goods already facing a 10% MFN duty owe nothing additional. Japan, South Korea, and Switzerland face a 12.5% floor on the same net-of-MFN basis. China, Brazil, Vietnam, Australia, and roughly 25 other economies face 12.5% stacked on top of their MFN rate — the most punitive tier.

USMCA-originating goods are exempt. Agricultural commodities, certain pharmaceuticals, chemical and industrial inputs, seafood, forest products, and some leather goods also carry product-specific exemptions. Tariff-rate quotas apply to textile imports from Bangladesh, Cambodia, Indonesia, and Malaysia, pending further USTR guidance. The tariff is currently being challenged in court (In re Section 301 Forced Labor Cases), with supplemental briefing completed October 16; no decision has been issued.

Section 301 China: Tariffs Officially Continued

On October 8, USTR formally announced that Section 301 tariffs on Chinese imports covering approximately $370 billion in goods will not expire. The tariffs — ranging from 7.5% to 25% across Lists 1 through 4A — had been signaled as potentially expiring at their four-year anniversaries in July and August, but domestic industries lobbied successfully for continuation. A statutory four-year review will proceed separately. 178 product exclusions remain valid through November 9, after which their fate will be determined through the review process.

The continuation matters because China's effective tariff rate is now 24.3% — far below its 2025 peak but still the highest of any major trading partner. The Section 301 tariffs layer on top of the Section 301 forced labour duties (China is in the 12.5%-additive tier) and any applicable Section 232 rates, making total effective burdens on Chinese goods among the highest in the US tariff schedule.

Section 232 Pharmaceuticals: Expansion to Smaller Companies

The Section 232 100% tariff on patented pharmaceutical products and ingredients expanded to smaller companies on September 29, 2026 (large companies had been subject to it since July 31). The regime includes meaningful relief mechanisms: companies from the EU, Japan, South Korea, Switzerland, Liechtenstein, and the UK qualify for a reduced 15% rate. Companies with both qualifying MFN pricing commitments and onshoring agreements can access a 0% rate through January 20, 2029. Onshoring agreements alone yield a 20% rate. The structure is designed to reward domestic manufacturing commitments while maintaining tariff pressure on companies with no US investment plans.

For pharma importers and their supply chains, the September 29 expansion completes a coverage gap that had allowed smaller companies a summer window to plan. The 0% pathway is significant for any company considering US manufacturing announcements, given the timeline certainty it provides.

Tariff Deal Signals: China and India

Two partial retreats are in early stages. On September 27, the US and China agreed in principle to reduce tariffs on 77 product categories including toys, child safety seats, Christmas ornaments, microwave ovens, towels, and bed linens. Formal implementation has not occurred; timing, final product lists, and specific rates remain unconfirmed. Tariff adjustments of this type are expected no more than once per year once the mechanism is established.

Separately, reports suggest the US and India are in advanced discussions to cut the US tariff on Indian goods from 50% to approximately 15–16%. The 50% rate was imposed in August after the US identified India's continued purchases of Russian oil as an actionable trade practice. No formal deal has been announced.

The Macro Picture

Wharton's Budget Model puts the average US effective tariff rate at 7.1% as of August 2026 — up from 2.3% in January 2025 — with a pre-substitution rate of 10.1%. Total customs revenue from new tariffs has reached approximately $314.8 billion gross since January 2025, before IEEPA refunds. Steel and aluminum carry the highest effective category rate at 39.8%, reflecting the Section 232 rate increase from 25% to 50% in June 2025. Automotive vehicles sit at 13.8%. USMCA-originating goods account for 81.4% of qualifying imports from Canada and Mexico — meaning the preferential origin system is working at high utilization even under the current tariff friction.

What this means: The tariff environment is not static and not moving in one direction. The IEEPA class action and the US-China deal talks show that tariffs are both being contested and selectively rolled back at the same time they are expanding through Section 301 forced labour and pharmaceuticals. For importers, the immediate priorities are: (1) confirm IEEPA refund eligibility before the two-year accrual clock closes on early-2025 entries; (2) map exposure to the Section 301 forced labour duties by country and product, particularly for the additive 12.5% tier; (3) check whether Section 232 pharmaceutical relief pathways apply; and (4) monitor the China and India deal talks, which — if finalized — could reduce costs on a targeted but commercially significant set of products.

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Tariff Watch: The Newest US Trade Policy Moves and Who They Affect

Tariff Watch: The Newest US Trade Policy Moves and Who They Affect

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