As the (Customs and Trade) World Turns: June 2025

We are navigating an unpredictable and fast changing trade landscape and what we are reporting today may change by tomorrow (or in the next hour). However, our team is regularly issuing reports and alerts to help our clients and friends stay up to date. Sign up here for regular updates and to receive this newsletter each month. In addition, our Trump 2.0 Tariff Tracker can be found here and information regarding navigating the new tariffs can be found here.

This edition provides essential insights for sectors including international trade, national security, aluminum and steel industries, fashion and retail, automotive, life sciences, electronics, transportation, electric mobility, e-commerce, shipping and logistics, and compliance, as well as for in-house counsel, importers, and compliance professionals.

In this June 2025 edition, we cover:

1. Legal battle over IEEPA tariffs continues; Federal Circuit grants stay of CIT’s order pending appeal, allowing tariffs to continue to be collected.
2. In other tariff news, steel and aluminum tariffs increase to 50%, Section 301 exclusions are quietly extended, and a framework for a potential US-China trade deal is announced.
3. Sanctions shift; OFAC’s new license eases restrictions on Syrian transactions amid policy changes.
4. DOJ targets trade and customs fraud under the Trump Administration.
5. Export license revocations complicate business deals with China.
6. Expanded Section 232 derivatives list coming? BIS evaluates Section 232 aluminum and steel derivative inclusion requests as first submission window closes.
7. Commerce announces the process for automakers to apply for US-content relief from Section 232 auto tariffs on USMCA-qualifying vehicles.

1. Tariff Litigation Update – Two Federal Courts Strike Down Trump’s IEEPA Tariffs, but No Relief Yet!

As detailed in a prior alert, both the US Court of International Trade (CIT) and the US District Court for the District of Columbia issued landmark rulings at the end of May (CIT ruling, district court ruling), striking down President Trump’s tariffs imposed pursuant to the International Emergency Economic Powers Act (IEEPA). However, importers will not yet receive immediate tariff relief and much needed refunds.

In the CIT case, the government filed an immediate notice of appeal to the US Court of Appeals for the Federal Circuit together with an emergency motion to stay the permanent injunction. On May 29, the appeals court granted a temporary administrative stay, which was followed by grant of the government’s request for a stay pending the appeal on June 10. This means IEEPA duties will continue to be collected through the appeals process, which could take several months to conclude.

The government has also appealed the district court’s judgement to the US Court of Appeals for the DC Circuit (that judgment was stayed automatically by the district court itself pending appeal). That appeal will be decided by a panel of three judges appointed by President Trump during his first term. While the parties initially agreed to expedite the appeal, on June 9, plaintiff-appellees requested the DC Circuit to defer ruling on the request to expedite and instead align its briefing schedule on the merits with the schedule to be issued in the appeals court’s case.

And the Fox Says…: While the appeals are pending, IEEPA duties will continue to be collected. Given the uncertainty on the legality of the IEEPA duties and whether they will be ultimately confirmed invalid by the appeals courts, importers should continue to monitor tariff litigation developments, track entries affected and duties paid and take steps to protect their rights to refunds in the event that the IEEPA tariffs are ultimately invalidated.

Contributors: Antonio J. Rivera, Mario A. Torrico, Andrew McArthur, and Angela M. Santos

2. AFS Tariff Tracker: Essential Tariff Updates

Several significant tariff developments have emerged, impacting global business operations, particularly in industries that rely on steel and aluminum as well as companies that purchase products from China or the European Union (EU).

Section 232 Steel and Aluminum Tariffs Increase: The White House announced that starting June 4 Section 232 tariffs on steel and aluminum imports will increase from 25% to 50%. Key changes to the application of these tariffs include:

• The tariff rate on steel and aluminum and their derivatives has increased to 50%, with the exception of imports of United Kingdom-origin, which will remain at 25% until July 9, after which the US Department of Commerce may impose tariff rate quotas or potentially raise the tariff rate.
• Generally, reciprocal tariffs will now apply to the value of the non-steel/aluminum content for steel products in Chapter 73 and aluminum products in Chapter 76, even where Section 232 tariffs are applicable.
• The tariff “non-stacking” hierarchy has been revised, with Section 232 steel/aluminum duties now taking precedence over IEEPA fentanyl tariffs on Canada/Mexico. For more details on the non-stacking rule, see here.

Section 301 Exclusion Extensions: The US Trade Representative (USTR) has announced a three-month extension of certain product exclusions from Section 301 tariffs on Chinese imports. The exclusion extensions, effective from June 1 to August 31, covers products such as solar manufacturing equipment, electric vehicles, batteries, semiconductors, certain consumer products, and more.

Tariffs Threatened on the EU: President Trump has threatened to impose 50% tariffs on imports of EU origin. After initially threatening to impose the tariffs by June 1, the tariff increase has been delayed until July 9 following negotiations with European Commission President Ursula von der Leyen. There are some indications the July date will be further extended. This delay provides a window for further discussions aimed at resolving trade disputes and avoiding retaliatory measures.

US-China Reciprocal Tariffs: As we previously reported, the United States and China have agreed to temporarily reduce reciprocal tariffs for 90 days beginning May 14. This reduction lowers the tariff rate from 125% to 10%. On June 10, confirmed by President Trump’s Truth Social post the following day, the countries announced that it had agreed upon a framework in principle to maintain current tariff rates in exchange for the United States securing access to Chinese rare earths while allowing Chinese students access to American universities. Some reports indicate that the countries negotiated a 55% tariff rate, however it is unclear whether that percentage includes Section 301 tariffs.

And the Fox Says…: These changes highlight the dynamic nature of the tariff landscape. Although the Trump Administration has demonstrated a willingness to negotiate with trade partners, the Administration continues to use tariffs as a strategic tool. Importers and supply chain managers should assess their tariff exposure and explore duty mitigation strategies.

Contributors: Angela M. Santos, Lucas A. Rock, and James Kim

3. Broad Sanctions Relief for Syria, but Export Controls Remain

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Syria General License (GL) 25, following President Trump’s statement that he intends to lift sanctions against Syria. This license authorizes most, but not all, of the transactions previously prohibited under the Syrian Sanctions Regulations (31 C.F.R. part 542), including services related to telecommunications, energy, health care, education, construction, and more. It also allows US banks to process transactions for any of the authorized transactions and allows US persons and members of the Syrian diaspora community to provide support to the new government of Syria. However, GL 25 excludes from its authorization transactions involving individuals or entities on OFAC’s Specially Designated Nationals (SDN) and Blocked Persons list or their subsidiaries unless the SDNs are specified in the Annex of GL 25, and it does not permit the unblocking of property or interests blocked as of May 22. Additionally, transactions, including the transfer of goods, services, or technology, related to the governments of Russia, Iran, or North Korea remain prohibited.

Concurrently, the US Department of State issued a 180-day waiver under the Caesar Syria Civilian Protection Act to facilitate investments and reconstruction efforts in Syria. OFAC also issued an FAQ confirming that foreign persons could engage in the same transaction as covered by GL 25 without risking sanctions designation, and the Financial Crimes Enforcement Network allowed US banks to maintain accounts for the Commercial Bank of Syria under the USA Patriot Act. We discuss GL 25 and the corresponding sanctions and export control implications in greater detail in our June 2 alert.

Despite these changes, the export control provisions under the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations continue to apply to exports or reexports of US-regulated items to Syria. Companies must also continue to comply with the reporting requirements under Section 219 of the Iran Threat Reduction and Syria Human Rights Act, which may require disclosure of their or their affiliates’ activities involving certain individuals or entities on the GL 25 Annex that are also sanctioned under certain other sanctions programs.

And the Fox Says…: This general license follows the president’s May 13 announcement regarding intentions to remove the sanctions on Syria and is “intended to help rebuild Syria’s economy, financial sector, and infrastructure, in line with US foreign policy interests,” but some obstacles remain to engaging in business with Syria.

Contributors: Matthew Tuchband, Maya S. Cohen, and Gamin Kim

4. DOJ Intensifies Enforcement of Trade and Customs Fraud Under the Trump Administration

Under the Trump Administration, the US Department of Justice (DOJ) has significantly heightened its focus on prosecuting trade and customs fraud, particularly tariff evasion. A recent DOJ Criminal Division memorandumidentifies trade and customs fraud as a top enforcement priority, marking a shift from US Customs and Border Protection’s (CBP) traditional administrative actions to more aggressive criminal prosecution. The DOJ is also leveraging the False Claims Act (FCA) to target customs violations, signaling a robust approach to combating fraudulent import practices.

Recent enforcement actions underscore this new direction. For example, the DOJ intervened in a FCA lawsuit against Barco Uniforms Inc., alleging that the company and its suppliers conspired to undervalue imported goods from China to reduce customs duties, using dual invoicing schemes. The DOJ’s intervention follows other high-dollar FCA settlements involving Evolutions Flooring Inc. ($8.1 million for evading duties and misrepresenting supply chain information), Precision Cable Assemblies, Inc. and Global Engineered Products, Inc. ($10 million for submitting falsified invoices), and Alexis, LLC ($7.6 million for underpaying customs duties over seven years).

These cases highlight the DOJ’s intent to hold importers accountable for accurate reporting of product value, country of origin, tariff classification, and other entry information. The DOJ has also expanded its Corporate Whistleblower Awards Pilot Program to incentivize reporting of trade and customs fraud.

And the Fox Says…: The DOJ’s intensified enforcement posture makes robust customs compliance more critical than ever for companies engaged in international trade. Importers should stay current on tariff changes, update internal customs manuals, ensure accurate data reporting, maintain supply chain transparency, consult with customs experts, train employees, and keep records for at least five years. Establishing internal reporting mechanisms for suspected violations is also recommended to mitigate FCA liability and demonstrate a commitment to compliance.

Authors: Jackson David Toof, Nadia Patel, Mario A. Torrico, and HaMin Jeong

5. Access Denied: Administration’s Use of License Suspensions and Notifications of New Licensing Requirements Adds to Uncertainty

Against the backdrop of ongoing trade negotiations between the United States and China, recent months have seen an increase in the use of a variety of mechanisms with an apparent intent to curtail US companies’ business with China. In particular, Commerce appears to have taken a three-pronged approach in this regard by (1) revoking or suspending previously approved export licenses, (2) issuing “is-informed” letters putting US companies on notice that a license is now required for the export of certain items to China, and (3) placing a general pause on the processing of a number of pending export licenses to China. While none of these actions are by itself unprecedented, when taken together, the result is that companies are finding themselves in a position of uncertainty with respect to whether they will be able to conduct new or ongoing business in China.

Companies that are the recipients of notices of license suspensions will need to review the suspended licenses to determine the scope of activities that are no longer authorized and ensure that ongoing activities pursuant to such licenses are not conducted, and they should consider whether to appeal those suspensions. EAR provides that such appeals must be filed within 45 days of the suspension. Companies receiving “is-informed” letters should review carefully to determine the items and activities that will now require a license and ensure that mechanisms are in place to verify that no covered activities are conducted unless such licenses have been obtained.

And the Fox Says…: Adding to the miasma of uncertainty plaguing the world of international trade today, companies relying on US licenses to engage in cross-border transactions, particularly in countries subject to increased scrutiny by the current Administration, should ensure that they understand the scope of their operations and activities in those countries and are prepared to be nimble to address any changes. Better safe than sorry!

Contributors: Megan Barnhill and Terry M. Frederic

6. First Round of New Section 232 Inclusions Process Concludes

As we reported in our May edition, Commerce’s Bureau of Industry and Security (BIS) issued an interim final rule, establishing a process to expand the scope of the current Section 232 tariffs on steel and aluminum to include additional derivative products. US producers and trade associations have three separate, two-week filing windows each year to submit an inclusion request, the first of which closed on May 14. Following each submission window, BIS will post public versions of valid requests for a 14-day public comment period (i.e., rebuttal comment period). Within 60 days of receiving an inclusion request, BIS will make decisions on the inclusion requests either granting or denying them.

During the first submission window from May 1 through May 14, around 58 separate inclusion requests were submitted, covering hundreds of derivative products, spanning from kitchenware and construction tools to advanced technological items such as electric modules and drones. Nearly 13,000 rebuttal comments were filed by the June 4 deadline arguing that BIS reject these inclusion requests. BIS’ determinations on these requests are due by July 19.

As demonstrated by the overwhelming response by US importers and downstream producers to the inclusion requests, the process has the potential to significantly expand the scope of derivative products to products that are not traditionally thought of as a steel or aluminum derivative.

And the Fox Says…: US producers and importers should be aware of this process and stay current on any developments related to it. US producers have the opportunity to request the inclusion of specific products. Meanwhile, importers and downstream producers must remain vigilant, as the process could lead to expanded duties on a wide range of products. Importers should closely monitor the July 19 determination deadline and prepare for the upcoming submission and rebuttal windows set to open again in September.

Contributors: Antonio J. Rivera, Mario A. Torrico, Andrew McArthur, and Fernando Ramírez

7. New Procedures for USMCA Automobiles to Claim US Content Relief From Section 232 Auto Tariffs

On May 20, Commerce published new procedures in the Federal Register for importers seeking to exclude the value of US content from the 25% tariff on automobiles imposed under Section 232. These procedures implement the carve-out established in Presidential Proclamation 10908 for autos assembled in Canada or Mexico that qualify as originating under the United States-Mexico-Canada Agreement (USMCA).

Under the new rules, importers of USMCA-originating vehicles must submit documentation to Commerce certifying the total declared customs value of each vehicle in a model line, the value of US content, and the value of non-US content. Importers may use averaging methods consistent with USMCA Automotive Appendix.

In addition, USMCA certifications of origin and producer-submitted auto certifications relating to the North American steel and aluminum content and labor value content requirements must be submitted. The notice clarifies that “U.S. content” includes parts and materials that are wholly obtained, produced entirely, or substantially transformed in the United States. A senior corporate officer, such as the CFO or general counsel, must certify the accuracy of each submission.

Commerce will review each submission for completeness and compliance and may require additional information. If approved, Commerce will provide CBP a list of importers and vehicles authorized to benefit from the US content carveout.

In addition, if there are changes in sources or production that would impact an importer’s eligibility, the importer must request a new eligibility determination from Commerce. Eligibility determinations will only be valid for six months, requiring the importer to resubmit its application for a model line at least 30 days prior to expiration. If US content is overstated or later disallowed, CBP may impose the full 25% tariff on all relevant imports retroactively to April 3.

And the Fox Says…: The new procedures provide a clear path for USMCA-qualifying autos to obtain relief from the Section 232 tariff, but the process is documentation-heavy and compliance-focused. Importers should ensure that their US content calculations, which rely significantly on existing customs and USMCA rules, are undertaken with care and that all certifications are accurate to avoid retroactive liability.

Separately, the auto parts covered by the Section 232 tariff are still exempt from the tariff based on USMCA qualification, but this exemption will only last until Commerce develops a system to apply the tariff on the non-US content in such parts. With the procedures for autos now implemented, will Commerce develop a similar system for auto parts?

Contributors: Antonio J. Rivera and James Kim