As the (Customs and Trade) World Turns: October 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 October 2025 edition, we cover:

1. CIT vacates CBP forced labor finding due to inadequate explanation of decision.
2. Commerce initiates two more Section 232 investigations and implements tariffs on wood products.
3. Derivative inclusion processes and expansion of scope for sectors targeted under Section 232 action.
4. Public comment process opens in preparation for USMCA Joint Review set for July 2026.
5. BIS implements new Affiliates Rule, expanding export restrictions to certain foreign companies.
6. Operations of trade agencies amid government shutdown.
7. Legal challenges of the threatened tariffs on film media.

1. Forced Labor Updates: WRO and Finding Updates, Enforcement Statistics, and Supply Chain Passports

A recent Court of International Trade (CIT) decision demanding clearer, evidence-based US Customs and Border Protection (CBP) determinations, the issuance of a new Withhold Release Order (WRO), increased Uyghur Forced Labor Prevent Act (UFLPA) enforcement, and momentum around digital “passport” solutions collectively signal more disciplined, targeted scrutiny — paired with potential benefits for companies that can prove end to end traceability.

WROs, Litigation, and Enforcement Statistics

In a recent decision, the CIT vacated CBP’s forced labor finding against Kingtom Aluminio, holding that the agency did not adequately explain its decision to issue a finding on the public record. The ruling underscores that even in sensitive forced labor matters, CBP must provide a rational connection between the evidence collected and its determinations.

In September, CBP issued a WRO against Giant Manufacturing Co. covering bicycles, parts, and accessories produced in Taiwan, citing multiple International Labour Organization indicators, demonstrating that CBP continues to issue the WROs as a method of enforcement. CBP will detain shipments from Giant Manufacturing pursuant to the WRO. There have been a number of forced labor related allegations reported at Taiwan textile factories as well.

Recent UFLPA enforcement statistics indicate that while overall enforcement is down relative to prior fiscal years (October-September), there has been a noticeable recent uptick in UFLPA enforcement compared to the rest of the 2025 fiscal year.

Digital “Passport” Momentum

Reports indicate that technology service providers and CBP may be aligning on a digital supply chain passport, which leverages shared supply chain data to authenticate parties and trace inputs from origin to finished goods. These solutions aim to improve enforcement efficiency and accelerate customs clearance for trusted traders.

And the Fox Says… Although forced labor has not led the news cycle this year, recent trends like the recent rise in enforcement activity, the Giant Manufacturing WRO, and digital supply chain “passport” initiatives indicate renewed momentum. Importers should continue to strengthen compliance policies and procedures and consider methods to proactively validate their supply chains to ensure the efficient importation of merchandise.

Contributors: Andrew McArthur, Lucas A. Rock, and Angela M. Santos

2. Section 232 Buzz: Penitential Tariffs Ahead on Medical Products and Robotics and Industrial Machinery

The US Department of Commerce is advancing nine Section 232 investigations across a broad range of products with significant implications for importers and for domestic and foreign manufacturers. Below is an update on what is active, concluded, and may be next, so you can plan ahead with fewer surprises.

Last month, Commerce initiated two Section 232 investigations:

1. Personal Protective Equipment (PPE), Medical Consumables, and Medical Equipment.

2. Robotics and Industrial Machinery (see our alert here).

Under Section 232, Commerce must assess whether certain imports threaten national security and recommend trade remedies such as tariffs. However, before any decision is made, there is a process that allows parties to submit comments, either supporting or opposing, by October 17. If your supply chain touches any of these items, now is the time to weigh in.

The Section 232 investigation into PPE, medical consumables, and medical equipment covers a broad set of products such as masks, gloves, syringes, needles, infusion pumps, medical or surgical instruments, scalpels, IV bags, catheters, and gauze or bandages. It also encompasses machines, tools, and devices used for patient care including wheelchairs, hospital beds, pacemakers, insulin pumps, stents, heart valves, hearing aids, prosthetics, and ventilators. The second investigation concerns robotics and industrial machinery and covers CNC machines, specialty metalworking equipment (milling, drilling, and grinding machines), stamping and pressing machines, jigs and fixtures, and automatic tool changers.

The recently concluded investigation on timber and lumber resulted in additional tariffs commencing on October 14, which state a 10% tariff on timber or lumber and 25% tariff on upholstered furniture as well as kitchen cabinets and vanities. Beware, some tariffs are slated to increase in January 2026 to 30% on furniture and 50% on cabinets and vanities.

As the 232 investigation on trucks proceeds, on September 25 and October 6, Trump announced a forthcoming 25% tariff on Medium and Heavy Duty Trucks, but no official notice has been issued yet.

And the Fox Says… Importers should keep a keen eye on Section 232 investigations and if additional tariffs affect your costs or customers, consider submitting comments to help shape the record.

Contributors: David Llorente, Nitya Upadrasta, Mario A. Torrico, and Antonio J. Rivera

3. The Derivatives Caveat: The Expansion of Section 232 Duties Through Inclusion of Derivative Products

Section 232 has become a central instrument of trade policy in the Trump 2.0 Administration. Twelve Section 232 investigations have been initiated this year, with only two having concluded.

Against that backdrop, four sectors are currently subject to Section 232 duties: aluminum and steel, automobiles and auto parts, copper, and timber and lumber. While the scope of each action is defined in its proclamation, each determination also contemplates an inclusion process that can expand coverage to additional downstream products.

Aluminum and Steel: Derivative Inclusion Process

On May 2, the Bureau of Industry and Security (BIS) issued an interim final rule (IFR) establishing a process to expand the existing aluminum and steel tariffs to additional derivative products. The rule provides three two-week submission windows — two of which opened in May and September of this year, and the third opening in January 2026 — each followed by a two-week public comment period.

As discussed in a prior alert, after the conclusion of the first wave of inclusions, 428 Harmonized Tariff Schedule of the United States codes were added to the list of products subject to Section 232 duties.

The second submission window closed on September 29. BIS is accepting public comments through October 21, after which it will determine which products to add to the derivative list.

Automobiles and Auto Parts: Inclusion Process

A similar inclusion process for automobiles and auto parts opened on October 1. Under the IFR for autos, BIS will open a two-week submission window four times per year, beginning on the first day of January, April, July, and October. The docket for viewing requested inclusions and submitting comments is not yet available.

Copper, Timber, and Lumber: Forthcoming Processes

The proclamations implementing Section 232 tariffs on copper and on timber and lumber direct the Secretary of Commerce to establish processes for including additional derivatives. The proclamation on wood products does not specify timing for the process. However, the copper proclamation, issued on July 30, provides that the process must be established within 90 days, indicating that implementation should be expected by October 28.

And the Fox Says… Stakeholders should evaluate opportunities to participate in forthcoming filing windows — both to contest new inclusions and to advocate for changes — recognizing that removal pathways remain discretionary and undeveloped.

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

4. The USMCA Joint Review Process Is Underway

The North American trade pact, in effect for over 30 years, is up for review in the coming year. On September 17, the US Trade Representative (USTR) initiated public consultations in advance of the Joint Review of the US-Mexico-Canada Agreement (USMCA), set to begin July 1, 2026. During the review, the three governments will decide the fate of the USMCA — whether to keep the status quo or opt for change.

Until November 3, the USTR will accept public comments on various aspects of the USMCA, including its operation and implementation, compliance issues, market access, economic security, and the investment climate, among other things. In addition, comments are being solicited on whether the USMCA has done enough to bolster US competitiveness and its technological edge.

After considering public feedback, including the views offered during a public hearing scheduled for November 17, the USTR must submit a report to Congress by January 1 on the United States’ negotiating objectives for the upcoming review. The USMCA parties are expected to provide recommendations for potential changes to one another by January 1, 2026.

The US government’s focus on spurring domestic manufacturing and addressing trade imbalances will likely shape its approach to the review, as will its concerns on Chinese investments within North America. Other hot topics likely to feature in the review are (the already very complex) rules of origin and US Section 232 actions. Some note that, although Congress is likely to play a significant role in the process, President Trump remains unconvinced of the USMCA’s value proposition. USTR Jamieson Greer, on the other hand, appears to be approaching the review from a bilateral negotiating perspective.

Separately, CBP recently issued guidance confirming that refunds of International Emergency Economic Powers Act (IEEPA) tariffs on Canadian and Mexican goods are available via USMCA post-importation claims, providing a bit of good news and flexibility to US importers.

And the Fox Says… The period through January 1, 2026, will be critical for shaping US objectives and Congressional engagement for the USMCA review. Importers and other stakeholders should consider participating in the public consultation process and weighing in on the aspects of the agreement that are critical to their trade operations.

Contributors: Denny Peixoto, James Kim, and Diana Dimitriuc-Quaia

5. BIS Adopts 50% “Affiliates” Rule for Entity List and Other Restricted End User Lists

On September 29, BIS issued its new “Affiliates Rule,” which immediately extended export restrictions to foreign companies that are directly or indirectly owned 50% or more, individually or in aggregate, by one or more entities on the (1) Entity List (EL), (2) Military End User (MEU) List, or (3) Specially Designated Nationals List pursuant to a sanctions programs named in 15 C.F.R. §744.8. Ownership is aggregated across all three lists and through all tiers, and companies owned by multiple listed entities are subject to the most restrictive applicable controls.

Foreign Direct Product Rules that have EL-based restrictions were also broadened to align with the Affiliates Rule.

The Rule creates significant due diligence obligations. Under new Red Flag 29, if there is reason to know of a listed entity anywhere in a counterparty’s ownership chain, then you have an “affirmative duty” to obtain ownership information confirming the Affiliates Rule does not apply, or to request a license. Even absent apparent links, exporters have an “affirmative responsibility to know the ownership” and are urged to adopt a risk-based compliance program.

A 60-day Temporary General License (through November 28) authorizes certain transactions with companies captured by the Affiliates Rule via ownership by EL or MEU List entity. It is limited to items destined to Country Groups A:5 or A:6, or to joint ventures with a partner — not captured by the Affiliates Rule — based in those countries or in the United States.

And the Fox Says… Exporters, reexporters, and transferors should update compliance procedures and reassess relationships with foreign counterparties, particularly in countries of higher risk or where ownership transparency is limited. For more information, reach out to our Export Controls team, or read our full alerts on the Affiliates Rule here and here.

Contributors: Maya S. Cohen, Megan Barnhill, Derek Ha, Christopher H. Skinner, and Matthew Tuchband

6. The Trade World Still Turns, Even When the Government Doesn’t

Washington, DC, has entered its third week under a government shutdown — the fifth longest in US history — after Congress failed to reach a funding deal. The stalemate has left hundreds of thousands of federal employees furloughed and agency operations uneven.

CBP: CBP remains largely operational, with most employees deemed “exempt.” Cargo clearance, examinations, and audits continue as normal, and new tariffs (including the October 14 Section 232 tariffs on lumber and furniture) are proceeding on schedule. However, refund payments are paused because the US Department of the Treasury cannot issue disbursements during the funding lapse. Importers may also face port delays if partner government agencies lack on-site staff.

Commerce and ITC: At Commerce, the International Trade Administration is granting automatic 10-day extensions for most filings but encourage parties to meet existing deadlines. The International Trade Commission, by contrast, has ceased regular operations with hearings postponed and staff unavailable to answer public inquiries. However, the Harmonized Tariff Schedule search tool and DataWeb will still be maintained.

USTR: The Office of the USTR remains active, continuing national security and IEEPA-related negotiations and Section 232 work. USMCA enforcement programs funded by multi-year appropriations remain unaffected.

Export Controls and Sanctions: The Office of Foreign Assets Control’s (OFAC) licensing portal is still available, however only applications that satisfy an appropriate exception (e.g., to ensure the safety of human life or the protection of property) will be reviewed. OFAC will hold all other licensing-related submissions until Congress restores appropriations. The Defense Export Control and Compliance System is not allowing new submissions or updates. Snap-R is still available, however BIS is prioritizing the review of license applications required to protect national security and persons and property, i.e., exports in support of US military operations.

And the Fox Says… While trade keeps (largely) moving, it is not immune. With refunds paused and filing timelines shifting, companies should monitor developments closely and keep lines of communication with agencies open. The longer the shutdown lasts, the greater the risk of disruption, delay, and the need for contingency plans.

Contributors: James Kim, Tyler J. Kimberly, Maya S. Cohen, and Angela M. Santos

7. The Quest for a Movie Tariff

A surge of Section 232 investigations and emergency powers tariffs now touches nearly all US trade. Are digital goods safe from these tariff burdens? That is one of the questions raised by President Trump’s statements threatening to impose a tariff of 100% on “any and all movies that are made outside of the United States.”

Why Movies Are Different

Movies are largely distributed through digital transmissions rather than as physical media. That distinction matters for trade policy. The World Trade Organization’s long standing e‑commerce moratorium reflects a global practice of not imposing customs duties on electronic transmissions; a position the United States has consistently supported. While the moratorium is not self‑executing domestically, it underscores the legal and practical hurdles of treating movies like traditional imported “articles.”

Possible Legal Authorities and Limits

Among the recent authorities used by the president to impose tariffs, the IEEPA is an ill fit because Congress has expressly exempted the import or export of “information or informational materials” — including films, books, and other expressive works — from the statute’s emergency powers. That exemption, enacted in 1988 (the so‑called Berman Amendment) applies regardless of format or medium and covers both commercial and non‑commercial transactions.

Section 232 of the Trade Expansion Act of 1962 authorizes measures to address national security risks from imported “articles,” a term associated with tangible goods entering the United States. Even setting aside the demanding national security standard, applying Section 232 remedies to movies would invite statutory challenges.

That leaves Section 301 of the Trade Act of 1974, which allows the United States to respond to foreign practices deemed unreasonable or discriminatory and that burden US commerce. If aimed at specific countries’ tax incentives for movie production, Section 301 presents a possible path for the imposition of tariffs. Such a proceeding requires an investigation, public comments and hearing, and a tailored remedy. Any resulting tariffs would apply to movies from the countries covered by those findings, not worldwide.

And the Fox Says… Even if a legal theory is identified, implementation of such a tariff would be difficult. Policymakers would need to define what constitutes a “movie import,” determine the place of importation and valuation methodology, and do so without undermining longstanding US positions opposing duties on digital trade.

Contributor: Diana Dimitriuc-Quaia