As the (Customs and Trade) World Turns: November 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, steel, and copper industries, fashion and retail, automotive, life sciences, electronics, artificial intelligence, transportation, electric mobility, e-commerce, shipping and logistics, and compliance, as well as for in-house counsel, importers, and compliance professionals.

In this November 2025 edition, we cover:

1. DOJ intensifies FCA enforcement against transshipment-related tariff evasion and implements AI tool to increase detection across CBP.

2. The United States and China agree to de-escalatory measures impacting IEEPA tariffs, export controls, Section 301 exclusions, and shipbuilding measures.

3. Developments of trade frameworks with various Southeast Asian and Latin American countries.

4. New Section 232 tariffs on medium and heavy-duty trucks.

5. Canada provides relief for certain US-origin steel and aluminum imports by extending the United States Surtax Remission Order.

6. BIS suspends for one year the implementation of export control restrictions under the “Affiliates Rule.”

7. US Supreme Court hears oral arguments on IEEPA trafficking and reciprocal tariffs.

8. State Department eases export controls on Cambodia.

1. FCA Heat on Transshipment: DOJ Ramps Enforcement as CBP Deploys AI, Elevating Tariff Evasion Risk for Importers

Recent reporting indicates a sustained ramp-up by the US Department of Justice (DOJ) in claims and enforcement under the False Claims Act (FCA) to pursue alleged tariff evasion tied to transshipment schemes (see our prior articles for September and August). The FCA permits qui tam actions, meaning anyone, including private citizens, with knowledge of a potential violation can file suit on the government’s behalf. Additionally, under the FCA, the DOJ can recover penalties and triple the value of the government’s losses from the fraudulent transaction(s). This trend reflects a broader shift towards treating import-related statements as fraud, not just compliance errors, especially where transshipment may be involved.

In parallel, the US Customs and Border Protection (CBP) has awarded an exclusive and lucrative contract to Exiger AI to deploy artificial intelligence (AI)-driven transshipment detection across CBP. The platform is designed to score shipments in real time based on risk, map multi-tier supply chains, and validate origin, classification, and value. While the software will be utilized by CBP, its data and analytics capabilities will likely bolster interagency scrutiny of possible tariff evasion and, in turn, support FCA-based theories of liability when importers’ statements to the government are alleged to be false or misleading.

Importantly, FCA exposure is in addition to CBP’s own penalty regime. Companies with potential compliance issues now face overlapping risk, including administrative penalties, liquidated damages, and seizures from CBP, and parallel FCA investigations and civil fraud remedies from the DOJ.

And the Fox Says… Importers should increase focus on diligence and compliance efforts, especially where supply chains touch higher-risk transshipment hubs such as Vietnam or Thailand. Additionally, like CBP, importers should consider leveraging advanced screening and supply chain mapping solutions to further support origin determinations, monitor supplier routings, and document compliance measures.

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

2. China Tariffs: What Changed, What’s Paused, and What’s Next

The United States and China agreed to a number of trade adjustments that ease tensions while negotiations continue. Below, we summarize these actions.

IEEPA Fentanyl and Reciprocal Tariffs: Effective November 10, the International Emergency Economic Powers Act (IEEPA) fentanyl tariffs for imports from China and Hong Kong were lowered from 20% to 10%. At the same time, the IEEPA reciprocal duties for Chinese-origin goods (including products from Hong Kong and Macau) will remain at 10% until November 10, 2026, following a one-year extension of the suspension of the heightened reciprocal rate.

Section 301 Shipbuilding Actions Suspended: The United States proposed a one-year suspension of the ship-related fees adopted in the Section 301 action against China’s dominance of the maritime, logistics, and shipbuilding sectors, effective November 10.

Section 301 Exclusion Extended: While there is no formal publication in the Federal Register yet, the United States agreed to extend certain Section 301 exclusions that were set to expire on November 29, until November 10, 2026 (see here). It is still unclear at this time whether all current Section 301 exclusions will be extended through November 2026.

Relief for Export Controls: The US Department of Commerce’s Bureau of Industry and Security (BIS) published a final rule, “One Year Suspension of Expansion of End-User Controls for Affiliates of Certain Listed Entities.” Effective November 10, the final rule suspends the implementation of the interim final rule “Expansion of End-User Controls to Cover Affiliates of Certain Listed Entities” (the BIS Affiliates Rule). We discussed the suspension of the BIS Affiliates Rule in further detail in our alert.

Chinese Commitments: China will suspend rare‑earth export controls announced October 9 and issue general licenses for rare earths and other minerals for US end users; halt shipments of fentanyl‑related chemicals to North America and tighten controls globally; suspend certain retaliatory tariffs and non‑tariff actions against companies on the end user and unreliable entity lists, including those tied to Section 301 shipbuilding actions; resume purchases of various US exports; extend its tariff‑exclusion process for US imports through December 31, 2026; and terminate antitrust, anti‑monopoly, and anti‑dumping investigations targeting US semiconductor supply chain companies.

And the Fox Says… The Administration’s tariff and trade policy for China remains dynamic and subject to rapid reversal. Importers should assume continued fluidity in tariff rates, exclusions, and enforcement priorities, and build contingency plans that account for periodic resets in policy and implementation.

Contributors: Mario A. Torrico, Maya S. Cohen, and Fernando Ramírez

3. Southeast Asian Trade Deals and Frameworks Offer Insights Into US Trade Priorities

The United States announced headline trade deals and frameworks of deals with four Southeast Asian partners on October 26, including trade deals with Malaysia and Cambodia, and frameworks of deals with Thailand and Vietnam. On November 13, the White House announced additional frameworks of agreements with Argentina, Guatemala, El Salvador, and Ecuador. We expect that additional frameworks and agreements will be announced in the coming months. Please look for further updates on the November 13 frameworks in our December newsletter.

Reciprocal Tariff Rate

The agreements and frameworks of agreements provide for the following reciprocal rates, which maintain the rates that were previously announced in August 2025.

Origin and Transshipment

Both the Malaysia and Cambodia agreements contemplate alternative rules of origin to ensure that the benefits of the agreements would not accrue to third countries. These alternative rules of origin have not been published and could be agreed upon at a later date. The rules of origin may provide an increased duty rate for products that do not meet certain thresholds, and we have heard rumors of regional value content requirements or maximum foreign content ceilings. 

Export Controls

The agreements also require the trade partners to develop export controls. Malaysia will align with US unilateral controls, restrict dealings with BIS/ Office of Foreign Assets Control (OFAC)‑listed parties, and also explore investment security review. Cambodia will cooperate with multilateral and US controls on a case‑by‑case basis, restrict transactions with BIS/OFAC‑listed parties, and increase transparency into third‑country investment activity. 

Forced Labor

The current US agreements with Malaysia and Cambodia also require those countries to adopt and implement prohibitions on forced labor, similar to the requirements that were in the United States-Mexico-Canada Agreement (USMCA).

And the Fox Says… Importers should assess the tariff implications of recent reciprocal tariff agreements and frameworks with ASEAN countries and prepare for heightened scrutiny and compliance obligations related to sourcing, transshipment, export controls, and labor risk. Fashion and retail companies that shifted supply chains away from China to other Southeast Asian countries may be particularly impacted.

Contributors: Yusra H. Siddique, Lucas A. Rock, Fernando Ramírez, and Angela M. Santos

4. A Heavy Lift: Section 232 Tariffs Arrive for Trucks and Parts

Effective November 1, new Section 232 tariffs are rolling out on trucks and their parts. Under Presidential Proclamation 10984, imports of medium- and heavy-duty vehicles (MHDVs) and MHDV parts (MHDVPs) are now subject to an additional 25% duty, while buses and similar vehicles under Harmonized Tariff Schedule 8702 face a 10% duty.

As with the auto tariffs announced earlier this year, the Administration cited national security concerns tied to supply chain dependence on foreign truck and bus parts. Imports of subject vehicles and parts from all countries are covered, with no special rates (yet) for any countries with which the United States has struck a trade deal, such as the United Kingdom, Japan, or the European Union.

Several key flexibilities stand out.

• USMCA Relief: Following the framework of the Section 232 auto tariff, for MHDVs that qualify under the USMCA, the 25% tariff will only apply to its non-US content, while USMCA-qualifying MHDVPs will have a full tariff exemption until Commerce comes up with a process to apply the tariff to their non-US content.

• Offset Program: Through 2030, original equipment manufacturers (OEMs) assembling trucks in the United States can earn credits — equal to 3.75% of the value of US-assembled trucks — to offset the impact of MHDVP tariffs. The offset can only be used by an importer of record authorized by the OEM. Changes were also made to the Section 232 auto tariff version of this program to harmonize both programs.

• Self-Certification: Imports may be classified by importers as “auto” or “MHDV” components and are therefore subject to Section 232 auto or truck tariffs, making such parts eligible for the offset program or potentially avoiding other applicable tariffs, such as the Section 232 steel or aluminum tariffs.

• Potential Steel and Aluminum Tariff Relief: The proclamation established a new program which may lower Section 232 tariffs on steel or aluminum produced in Canada or Mexico and supplied to auto or MHDV manufacturers in the United States.

And the Fox Says… Presidential Proclamation 10984 did more than simply set a new tariff on trucks and their parts. It introduced a whole host of new complexities and potential new tariff relief measures into the already multifaceted tariff landscape that impact automobiles and their parts and the steel and aluminum industry, among other country and commodity issues. Many of these programs will require more implementing guidance from Commerce and CBP to be fully operational, so importers of MHDVs and their parts should continue to monitor development closely. For other impacted products, there are actionable benefits to consider.

Contributors: James Kim and Antonio J. Rivera

5. Canadian Government Extends Surtax Relief

The Canadian government has extended, for an additional two months, the relief available under the United States Surtax Remission Order (2025) to mitigate the impact of the 25% surtax on certain US-origin steel and aluminum imports imposed since March 13.

Key Change

The eligibility period for remission and refunds now expires on December 16. Administrative guidance can be found in Customs Notice 25-19.

Eligibility Criteria

• For use in Canadian manufacturing, processing, agricultural production (added October 15), and food and beverage packaging.

• Goods imported on behalf of certain public sector entities: public health, safety, or national security.

• In limited circumstance and upon approval, relief may be obtained for goods in short supply within Canada.

Compliance Considerations

• There is no administrative appeal. Canada Border Services Agency (CBSA) decisions are final. Judicial review in the Federal Court of Canada may be initiated within 30 days where serious errors are alleged.

• Accuracy and completeness of documentation are critical. Applications and supporting materials must be submitted through CBSA’s Assessment and Revenue Management electronic portal.

Action Steps for Importers

• Confirm eligibility based on end-user and end-use requirements set out in the order.

• Track deadlines. December 16 for remission, and within two years of importation for refunds. This is critical given the absence of appeal rights, and any judicial review challenge has to be based on documentation provided to the CBSA.

And the Fox Says… Seek relief against the 25% surtax by ensuring that accurate and complete documentation is provided to the CBSA at the time of importation or when seeking refunds. Full compliance at the outset with the legal requirements is essential, as a rejection will not be appealable. Judicial review, while available, will be limited to serious errors on the part of the CBSA in the face of a complete record consisting of cogent evidence to support the claim for remission or refund.

Contributors: Riyaz Dattu and James Kim

6. BIS Affiliates Rule: Partially Suspended, But Not Settled

On September 29, BIS issued an “Affiliates Rule” extending export control restrictions applicable to Entity List parties, Military End Users (MEUs), and certain Specially Designated Nationals (SDNs) to all non‑US entities owned 50% or more, directly or indirectly, by such parties, worldwide. We discussed the rule at length here and here.

Just one month later, on October 30, the US Secretary of the Treasury announced that the rule would be suspended for one year, which was also reflected in a fact sheet published by the White House on November 1. BIS did not officially acknowledge the suspension until November 10 when it published a final rule suspending the implementation of the Affiliates Rule through November 9, 2026, absent further extension.

What Is Suspended … and What Is Not

While the final rule suspending the Affiliates Rule states that the rule “imposes a one-year suspension of the Affiliates Rule,” the text of the rule creates some uncertainty in that it states that “amendatory instructions 3, 6, 9, 12, 14, 16, 18, 20, 22, 24, 27, and 29 are effective November 10, 2026… . All other amendatory instructions become effective November 10, 2025.”

This creates a puzzle. The Affiliates Rule as published contained only 17 amendatory instructions. On review, instruction 12, covering Entity List amendments, and instruction 14, setting 50% ownership guidelines, are suspended, which tracks the policy rationale. But instruction 8, concerning the SDN List amendment, and instruction 13, concerning the MEU List amendment, are apparently not suspended. Likewise, instruction 2, which adds Red Flag 29, and instruction 4, which changes the Foreign Direct Product Rule, are not listed as suspended.

As a result, serious questions remain about the implementation of the BIS Affiliates Rule and its subsequent suspension.

Practical Takeaways

Near‑term priorities include assessing sunk costs and seeking contractual mitigation; maintaining operations where tools are deployed and using the pause to refine procedures, controls, and documentation; briefly deferring new purchases while vendors integrate affiliate screening and harden features; and monitoring for editorial corrections to reconcile the numbering mismatch.

And the Fox Says… The suspension is temporary and could be rescinded. Use this window to map risk, tighten contracting and timelines, and operationalize controls to be ready if — and when — the Affiliates Rule returns.

Contributors: Megan Barnhill, Kendall Murphy, and Maya S. Cohen

7. SCOTUS Shows Skepticism and Flags a Potential Refund “Mess” on the IEEPA Tariffs

On November 5, the US Supreme Court held oral arguments in Learning Resources Inc. v. Trump and V.O.S. Selections, Inc. v. Trump on the legality of tariffs imposed earlier this year under the IEEPA to address declared national emergencies for persistent trade deficits and fentanyl trafficking.

The Court probed several legal frameworks, including close textual readings of “regulate,” separation of powers concerns, statutory and legislative history, reviewability of the emergency declarations, and the implications of relief. The justices largely avoided questioning the emergency findings themselves, focusing instead on whether the IEEPA authorized tariff imposition. Several justices discussed that none of the actions listed in the IEEPA refer to revenue generation, except perhaps the word “license,” calling into question the ability to impose these tariffs through the IEEPA. Other justices noted a potential contradiction in conferring on the president’s powers such as quotas or bans but not tariffs, a lesser action.

Justice Amy Coney Barrett suggested that reimbursement, should the challengers prevail, seems “like it could be a mess.” The government stipulated that the plaintiff parties would get refunded, but the Court’s decision would also implicate billions in tariff revenue for thousands of importers. Respondents’ counsel acknowledged the difficulty in processing refunds but noted several options, like (1) class action suits, (2) existing administrative procedures, (3) stay pending congressional action, or (4) limited prospective relief.

And the Fox Says… Although several justices appeared skeptical of the IEEPA tariffs, no one legal theory carried the day. Justice Barrett’s willingness to engage with practical implications of invalidating the tariffs underscores the potential challenges for importers seeking a refund –– even if the Court issues a favorable decision. It is also possible that the decision will be limited in scope, or that relief will be granted only to the plaintiffs, but we remain cautiously optimistic. In the interim, we are counseling our clients to take proactive steps to preserve rights to refunds in the event the IEEPA tariffs are overturned. We will provide additional guidance when the Supreme Court issues its final decision, which may be in the first quarter of 2026.

Contributors: James Kim, Joy Marie Virga, Christian L. Bush, and Angela M. Santos

8. State Department Lifts Arms Embargo on Cambodia

In a final rule issued on November 7, the US Department of State announced that it would amend the International Traffic in Arms Regulations (ITAR) to remove Cambodia from the list of proscribed countries at Section 126.1. The rule, which cites Cambodia’s “diligent pursuit of peace and security,” follows the October 26 agreement between the United States and Cambodia on reciprocal trade which provided that the United States would “work with Cambodia to streamline and enhance defense trade.”

This change means that applications to export or temporarily import defense articles and services to or from Cambodia will be considered on a case-by-case basis going forward. Previously, these requests were subject to a policy of denial unless they were related to conventional weapons destruction or clearing mines. The new rule also means that a number of ITAR license exemptions are now available for Cambodia.

Corresponding changes to the Export Administration Regulations (EAR) have not yet been made but presumably would include the removal of Cambodia from Country Group D:5, which is tied to Section 126.1’s proscribed countries list. Certain export licensing requirements related to semiconductors and advanced computing, as well as requirements for 600-series and 9x515 items, will be loosened as a result. Importantly, this loosening will not occur until the EAR is amended, and even then, Cambodia’s removal from Country Group D:5 would not affect the applicability of the EAR’s restrictions on MEUs and military-intelligence end use or users in Cambodia.

And the Fox Says… These changes may offer some increased opportunities for favorable disposition of ITAR licenses for Cambodia, as such applications will no longer be subject to a policy of denial. Other controls remain in place (at least for the time being), so exporters exploring new opportunities in Cambodia should make sure all their ducks are in a row before proceeding.

Contributors: Derek Ha and Megan Barnhill