By John F. Di Leo –
When the mainstream media try to report on the economy, they always focus on the easy stuff: stock market fluctuations, the price of crude oil, the Federal Reserve’s latest move, unemployment rates.
In the world of manufacturing, we know what matters more to us: Are our taxes, utility rates, and regulatory burdens going up or down? Can our customer base afford to buy our products?
Do our foreign competitors have an easier time penetrating our market than we have when we try to break into their markets?
As real American businesses fighting often institutionally unfair competition from overseas, does our future look bright or dim?
There has been plenty of activity on these fronts in recent years, but the mainstream media don’t tend to give such issues the coverage they deserve.
To listen to the media, the trade news in 2026 has been limited to one big story: the Supreme Court’s rejection of one set of President Trump’s tariffs in February.
But this is deceptive, since the President’s loss at the Supreme Court on the IEEPA tariffs only affected two specific groups of tariffs: the reciprocal tariffs that were assessed globally, and the fentanyl tariffs that were assessed on China, Mexico, and Canada, last year.
While these were certainly significant, they are far from the only major issue in trade in 2026. Some export sanctions are being dropped, others are being increased, new tariffs are being added, and we are likely beginning a long slow departure from the USMCA (formerly known as NAFTA).
In fact, since the SCOTUS ruling itself reinforced the President’s position on all the other tariffs, we are now best advised to prepare for more of the many other confirmed defensive approaches to follow.
So let’s look here at three areas of focus:
What importing costs remain in place for U.S. importers?
What are the reasons that motivate our government to pursue all these “trade remedies?”
What steps do American manufacturers need to take, as soon as possible, to protect themselves as these challenging times continue?
What are Import Tariffs?
Technically, all imported products are subject to the assessment of import taxes, ranging from duties and fees to the various special tariffs that we see in the news. These charges are normally calculated by a Customs broker and paid by the importer shortly after each shipment is imported (though there are ways to postpone payment, through use of bonded warehouses or foreign trade zones, which have their own cost but are often worthwhile).
Some such charges are based on the weight, volume, or number of goods imported, but these are rare. Most tariffs assessed by the United States are “ad valorum taxes,” meaning they are a percentage rate, applied to the declared value of the goods, at the time of importation.
This is an important point, since press coverage gives the impression that with 25%, or 50% or 75% punitive tariffs, that must mean a huge portion of the cost of a product on the store shelf is import tariffs. It’s not. The percentage is assessed on an earlier price: the full value of the goods to the importer, at the time of importation.
A $100 imported item for sale at your local retailer may have been purchased for $20 or $30 from China; that $20 or $30 is the figure that Customs’ 25%, 50%, or 75% is assessed upon. The balance of that $100 MSRP covers the seller’s other costs: the importer’s tariff payments, and the American design that was handed to the foreign contract assembler, and all that international transportation, and American warehousing and fulfillment, and American marketing and distribution, then the final retailer’s brick and mortar costs and margin.
For American manufacturers, buying components from foreign vendors, the compliance aspect is often more challenging than bearing the cost of the tariffs themselves. An American product with a hundred components in its Bill of Materials might include fifty that are imported, some of them purchased off the shelf, others customized with tooling costs or customer-provided materials to factor into the “entered value for Customs.” Getting any of this wrong – especially the classification and the declared value upon which these tariff assessments are based – is among the primary risks run by most American manufacturers.
All imported products are subject to a basic duty, which varies by product and country, and which can range from zero to twenty percent or so, usually averaging around three to five percent for most manufacturers.
Then, on top of that, we have the punitive tariffs, such as
The Section 301s on most Chinese goods, implemented in the first Trump administration, ranging from 7.5% to 25%, with just a few increased considerably beyond that by the Biden regime. These have been primarily stable now for over six years.
The Section 232s, which many presidential administrations have used over the years, and the current administration has assessed mostly on steel, aluminum and copper (so far). These pose a special challenge because many are assessed only on the foreign vendor’s cost of the targeted material (so for example, an imported product containing copper, covered by this program, would be subject to all the other applicable tariffs at the product’s full price, but the Section 232 would only apply to the cost that the foreign vendor paid to his copper vendor for the finished product’s copper content. This is sometimes a challenging calculation).
The Section 122s, a temporary tariff set at 15% just from February through July 24, on imports from 60 countries. These were applied after the Supreme Court invalidated the IEEPA reciprocal tariffs in February.
The new Section 301s, which took effect as soon as the Section 122s expired on July 24, also applying to about 60 countries. This is the permanent replacement for the IEEPA tariffs that were invalidated in February. This one is another two–tier set; 10% on countries that are considered to have some protections against goods produced with slave labor, and 12.5% on goods from countries that are not trying hard enough to protect their or our consumers from goods produced by slave labor.
The new Section 338s on a large number of Canadian goods, set at 50%, expected to take effect on August 19, 2026.
Anti-Dumping Duties, a highly product-specific area of law that targets commodities where it has been proven that a predatory foreign government has been illegally subsidizing exports to the United States specifically to destroy our local production. These are usually set very high – in the 50% to 200% range, because their goal is to restore the full cost that would have been charged without the foreign government’s subsidies.
And there are more all the time.
The good news is that we finally have a federal bureaucracy that’s listening to the concerns of our manufacturing community, so, complaints about unfair foreign competition and foreign subsidies that defy the philosophy of fair trade no longer fall on deaf ears.
But the bad news of all that is that the remedies do cause challenges for American businesses, as we must all be doubly careful to educate our staffs, our vendors, and our brokers, on proper documentation, valuation, classification, and origin determination.
Getting this stuff wrong means allegations of tax evasion, illegal transshipment, negligence or fraud.
The Reasons Why
For over half a century, the American approach to international trade was in line with our fellow Western republics. Europe, Great Britain, Canada, Japan, and others joined us in championing the idea of free trade.
The great idea – in theory – was that if we eliminated protectionism and allowed duty-free or very low-duty imports, all our economies would boom, and even the third world would have a chance to prosper; the resulting rising tide would indeed lift all boats.
The reality turned out to be much harsher.
Other countries’ protectionism never really did go away; their trade barriers just moved from import tariffs to regulatory restrictions.
Ever try to market an American-made chemical or electrical appliance in Europe or the Middle East? SASO approval, the CE mark, the UKCA mark, HazMat restrictions and similar regulatory hurdles replaced high tariffs as the hundred–foot wall that keeps out foreign goods.
It turned out that the only major country that really honored the free trade theory was the USA; our trading partners could ship their goods to us with minimal tariffs applied, but when we shipped our goods to them, they were only allowed in if hundreds of thousands of dollars were paid in the retention of “authorized representatives,” if product lines were registered and blessed as safe by the EU through a CE mark, and if costly changes were made to molds and labeling so that these special marks were added to the products and their packaging.
It costs more than ever now to export to Europe; they just don’t do it with tariffs.
And Mainland China turned out to be even worse, because in addition to their general protectionism against imports from America, Mainland China has taken advantage of its position as a centrally-planned, absolute military dictatorship, to engage in currency exchange manipulation, government industry subsidies, a dismissal of modern environmental constraints, a policy of intellectual property theft, outrageous restrictions on rare earth materials, and the government-sponsored use of both slave labor and child labor.
None of these problems have been alleviated in recent years.
Even our past year of negotiations on the “reciprocal tariff” effort, while well-intentioned, has been only a partial success. In negotiation after negotiation, the Trump administration found that these foreign partners would rather promise larger importations of specific American commodities, or agree to invest in American factories, employing American workers, than give up an ounce of their beloved regulatory states.
We have accepted these investments – new factories are new factories, after all, and we welcome the new construction, growing tax base, and influx of long-term jobs – but our main problem, the foreign regulatory walls shut against our exports, remains in place.
So we must assume that the current array of American import tariffs will remain in place, and only grow broader, as the years go by. We still have to do what we can to balance the scales; if foreign countries won’t let our goods in, we need to use tariffs, quotas, sanctions and IP theft prosecutions to offset those foreign blockades.
So, What Should American Manufacturers Do in 2026?
Despite political issues like the war with Iran, state-by-state redistricting battles, and the usual problems in our big cities pushing trade off the headlines, the ongoing global trade war is still very much in the air, continuing to present challenges for the manufacturing community.
We continue to live in a high-import-tariff environment. New tariffs, anti-dumping cases, and other commodity-focused efforts will continue to be implemented, along with the likelihood of new efforts such as import quotas, which are much harder to build into a business plan than a simple tariff.
In addition, our Customs and export control enforcement risk grows. Every importer will eventually have import shipments selected for intensive inspection, import entries selected for documentation review, or facilities subjected to intensive Customs audits; the only question is when.
A manufacturing company’s risks grow as he imports more, or as he has more interactions with the government. For example:
Many of us have wisely added duty-drawback programs on our exports; many of us have added an FTZ or bonded warehouse entry program on our imports. And most of us have now filed for welcome refunds on the full year’s worth of IEEPA tariff payments that the Supreme Court decreed to be illegal.
All these steps make sense, but all these steps do also increase our visibility to Customs, making it that much more likely that we will be noticed and selected for these Customs enforcement reviews.
The IEEPA refund requests, in particular – essentially doubling an importer’s annual Customs filings in one fell swoop – give the government twice as many opportunities to study our operations, all at once, and to notice if any of our vendors’ invoices, packing lists, certificates of origin or entries might raise a red flag worthy of review. For example:
Are we sure our foreign vendors are properly describing the goods we import from them, so our Customs brokers can classify them correctly?
Are we sure their USMCA, DR-CAFTA, KORUS, and other free trade agreement certificates are properly substantiated?
Do our invoice values properly respect the full amount we’ve paid for the goods, considering tooling, downpayments, foreign engineering, customer-provided materials and other dutiable assists?
Are we confident that our vendors are both honest and knowledgeable about the real country of origin of the goods they sell us?
These, and many more such compliance issues, are the kinds of questions that every American importer and exporter needs to be asking himself, as 2026 progresses. Have we trained our buyers, engineers, accountants and customer service reps on these issues? Do we have the right programs in place, and do we have the right partners to keep us protected?
In the end, we all need to continue, and accelerate, our on-shoring and re-shoring programs, to reduce our dependence on foreign sources (China especially), and to fully participate in the benefits of the American manufacturing renaissance.
But this too takes focus, training, and a commitment to a new way of looking at the world.
We need to protect ourselves from fines, lawsuits, Customs penalties, etc.
It’s not all about the negatives, either:
We can think too of the many positives of a dedicated on-shoring and re-shoring effort. Much cheaper transportation, infinitely shorter lead times, freedom from the tariffs and quotas that come with importing, and an end to the terror of complete supply chain stoppages such as China’s months-long shutdowns of whole cities and seaports during the Covid-19 pandemic, and the six-month transit times of the global “Supply Chain Crisis” that followed.
Oh, yes indeed – 2026 is a year for continued focus on global trade. And the manufacturers who apply their energy to this issue will be better protected from the government enforcement to come, and much better positioned for the American industrial renaissance now underway!
Copyright 2026 John F. Di Leo
John F. Di Leo is a licensed Customs broker, writer and consultant, who has spent half a century in domestic and international logistics, working in both the freight forwarding and manufacturing sides of the desk. For over fifteen years, Di Leo has written regularly about business issues, international trade and current events for such publications as the American Thinker, Illinois Review, and the American Free News Network, and provides import/export and re-shoring focused training at The Trade Compliance Coach, LLC