Tariffs in 2026: How new trade rules impact your business

The number of tariff changes implemented by the Trump administration in 2025 caught many businesses off guard, as did the speed at which U.S. tariffs changed. Tariff policies in 2026 are proving to be just as volatile. To remain in compliance and avoid disruptions, businesses must prepare to institute tariff changes quickly.

Attending Avalara Trade and Tariff Tuesdays webinars will help you keep your finger on the pulse of tariff changes, as will reading this blog; it will be updated throughout the year as new information becomes available.

• On February 20, 2026, the Supreme Court of the United States ruled 6–3 that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs. 
• On March 4, 2025, the Court of International Trade (CIT) ordered the federal government to start refunding the IEEPA tariffs. The government is expected to appeal.
• Following the Supreme Court ruling on IEEPA, President Trump issued a proclamation imposing a 10% global tariff under Section 122, effective February 24, 2026, for 150 days. He also said he would fight IEEPA tariff refunds in court.
• On March 5, 2026, 24 states asked the CIT to stop the federal government from implementing Section 122 tariffs and to order the government to refund duties collected under the authority of Section 122.

Here are some of the most impactful tariff changes of 2026, by month.

• On March 6, 2026, CBP Commissioner Brandon Lord told the CIT that it’s currently “not possible for CBP to immediately prevent any additional entries from liquidating without IEEPA duties.” However, CBP is working to establish new functionality in the Automated Commercial Environment (ACE) to streamline IEEPA tariff refunds. It should be ready in mid-April. 

• On March 5, 2026, 24 states filed a lawsuit with the U.S. Court of International Trade (CIT) to block the Section 122 tariffs that took effect February 24, 2026. The 24 states are: Arizona, California, Colorado, Connecticut, Delaware, Illinois, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and Wisconsin.

The states contend that the Trump administration’s actions around Section 122 exceed its statutory authority, upend constitutional separation of powers, and violate the Administrative Procedure Act.  

• Speaking with CNBC on March 4, 2026, U.S. Treasury Secretary Scott Bessent said the U.S. would increase the 10% Section 122 tariff to 15% “likely sometime this week,” and that the administration is working to replace the temporary tariffs with Section 301 and Section 232 tariffs. “It’s my strong belief that the tariff rates will be back to their old rate within five months,” he said.

• On March 4, 2026, CIT Judge Richard Eaton ruled that “all importers of record whose entries were subject to IEEPA duties are entitled to the benefit of the Learning Resources decision,” referring to the U.S. Supreme Court decision striking down the IEEPA tariffs.

The CIT instructed U.S. Customs and Border Protection to liquidate “any and all unliquidated entries that were entered subject to the IEEPA duties” and to reliquidate “without regard to the IEEPA duties” any liquidated entries for which liquidation is not final. The government is expected to appeal.

• The Trump administration is attempting to delay IEEPA tariff refunds, but on March 2, 2026, the U.S. Court of Appeals for the Federal Circuit rejected the administration’s request and sent the case back to the CIT to establish a refund process. 

• Per a February 20, 2026, executive order, the additional ad valorem duties imposed pursuant to IEEPA in executive orders 14193, 14194, 14195, 14245, 14257, 14323, 14329, 14380, and 14382 “shall no longer be in effect and, as soon as practicable, shall no longer be collected.” 

The executive order adds, “Executive Order of February 20, 2026 (Continuing the Suspension of Duty-Free De Minimis Treatment for All Countries), and the Proclamation of February 20, 2026 (Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems), are unaffected by this order.” 

A separate proclamation confirmed that the suspension of the de minimis exemption for low-value goods remains in effect.

Another proclamation invoked Section 122 to impose a temporary import surcharge of 10% “on articles imported into the United States, effective February 24, 2026,” for 150 days.

• On February 20, 2026, the Supreme Court of the United States ruled 6–3 that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs. In a press briefing following the decision, President Trump said he will be imposing a 10% global tariff under Section 122. He also said his administration would fight IEEPA tariff refunds in court.

• As of February 7, 2026, the U.S. may impose an additional ad valorem rate of duty (“for example, 25 percent”) on imports of articles produced in countries that directly or indirectly purchase, import, or otherwise acquire any goods or services from Iran.

• Effective February 7, 2026, at 12:01 a.m. ET, the U.S. removed the additional 25% duty on Indian imports. This 25% tariff was added for “directly or indirectly importing Russian Federation oil.”

• On February 6, 2026, the White House issued a statement lowering India’s reciprocal tariff rate from 25% to 18%; no effective date was provided. The U.S. will also remove the reciprocal tariff on a wide range of goods identified in Executive Order 14346 (September 5, 2025) upon the successful conclusion of the Interim Agreement with India, and the U.S. will remove tariffs on certain aircraft and aircraft parts.

• The European Union and India reached a historic free trade agreement on January 26, 2026. Twenty years in the making, the trade deal will gradually reduce or eliminate tariffs on 96.6% of goods exported from the EU to India, and more than 90% of India’s exports to the EU. 

  • EU tariffs on many Indian goods, including coffee and tea, furniture,  jewelry, leather, and textiles, will be lowered or eliminated.

  • Indian tariffs on EU cars will drop from 110% to as low as 10%.

  • Indian tariffs on EU wines will drop from 150% to 75% and gradually drop to as low as 20%.

  • Indian tariffs on EU olive oil will go from 45% to 0% over five years; Indian tariffs on processed agricultural products, like bread and confectionary, will drop from up to 50% to 0%. 

  • Indian tariffs on EU imports of chemicals (now up to 22%), machinery (up to 44%), and pharmaceuticals (11%) will be mostly eliminated. 

  • The European Commission fact sheet on the EU-India free trade agreement lists additional benefits.

• On January 21, 2026, the European Parliament postponed until further notice the vote on the EU-U.S. trade deal signed by President Trump and EU Commission President Ursula von der Leyen in July 2025. The Commission must ratify the agreement, which lowers U.S. tariffs on most European goods. 

• The White House announced a 25% ad valorem duty rate on certain advanced computing chips, semiconductors, and certain derivative products, effective January 15, 2025. There are many carve-outs for domestic uses.

• The U.S. Department of Commerce announced a trade deal between the U.S. and Taiwan. Among other actions, the deal lowers the U.S. reciprocal tariff on Taiwanese goods to no more than 15%; caps Section 232 duties on Taiwanese auto parts, lumber, timber, and wood derivative products at 15%; and applies a 0% reciprocal tariff on generic pharmaceuticals (and their generic ingredients), aircraft components, and unavailable natural resources.

• The tariff on certain kitchen cabinets, upholstered furniture, and vanities did not increase to 30% on January 1, 2026, as previously announced. The current 25% tariff will remain in effect through 2026.

• The U.S. Department of Commerce (Commerce) reduced antidumping duties on Italian pasta. In September 2025, Commerce proposed raising antidumping duties to almost 92% for specified producers. Commerce has now lowered the duties to 2.26%, 9.09%, or 13.89%, depending on the producer. A final determination on the antidumping duties on pasta is expected in March 2026.

• U.S. Customs and Border Protection (CBP) announced it will issue all refunds electronically via Automated Clearing House (ACH) starting February 6, 2026. Importers and other businesses that may receive refunds are encouraged to review the requirements and take any steps needed to prepare for this change.

• Harmonized System Update (HSU) 2543 now includes Harmonized Tariff Schedule (HTS) updates that took effect January 1, 2026.

• The Office of the United States Trade Representative (USTR) has started reviewing the United States-Mexico-Canada Agreement (USMCA), which replaced the North America Free Trade Agreement (NAFTA) on July 1, 2020. Canada, Mexico, and the U.S. must jointly review the USMCA by July 1, 2026. The USMCA is scheduled to end on July 1, 2036, unless all three member countries continue the agreement. The review will likely focus on automotive rules of origin, labor enforcement, dispute settlement, energy policy, and the surge in nearshoring and cross-border trade.

• The U.S. has agreed to exempt U.K.-origin pharmaceuticals, pharmaceutical ingredients, and medical technology from Section 232 tariffs. U.S. tariffs on most South Korean goods are set at the most-favored-nation (MFN) rate or the U.S.-Korea Free Trade Agreement tariff (a flat 15%), retroactively effective as of November 14, 2025; for specific products, there are also caps on additional duties. See the Federal Register for more details.

• Effective January 1, 2026, Thailand dropped its de minimis threshold from 1,500 baht to 1 baht, essentially eliminating it. The European Commission will introduce a €3 customs duty per item on ecommerce parcels valued below €150, starting July 1, 2026, while it works to eliminate de minimis entirely. Read more about de minimis.

The most effective way for businesses to comply with tariff changes in 2026 and beyond is to use technology that tracks and implements new policies for you.

“In a world of constant tariff change,” says Shane Bogdan, Director of Cross-Border Sales at Avalara, “the advantage goes to businesses that act on real-time data, not those forced to react after costs have already changed. Avalara Cross-Border helps businesses stay ahead using the latest HS classifications, duty rates, and trade content, automatically applied across global transactions.” 

Avalara Cross-Border delivers real-time customs duty and import tax calculation using AI-driven 10-digit tariff classification codes for consumer products across more than 180 countries. It takes into account global rule and regulation content, including trade restrictions, de minimis thresholds, and country-level changes.

“I’d have to hire at least three people with tax experience to do the work that Avalara is doing for us,” says Jason Macatangay, CFO of Threadless. 

Learn about Avalara Cross-Border.

Whatever tools you use to manage tariffs, it’s important to maintain meticulous records.   

Probably. In fiscal year 2025, U.S. Customs and Border Protection (CBP) issued 2,218 trade penalties and collected more than $216 billion in total duty, taxes, and fees. “CBP uses the latest data analytics tools to uncover tariff evasion schemes,” the agency explains, “including undervaluation, misclassification, transshipment, antidumping and countervailing duty violations, illegitimate shell companies, and ‘double dipping’ by claiming more than one tariff exemption to avoid paying revenue owed to the government.”

The U.S. Supreme Court is reviewing the legality of tariffs imposed under the International Emergency Economic Powers Act, or IEEPA. If the court strikes down the IEEPA tariffs, the U.S. government could be required to refund the duties collected under IEEPA. It will also likely look for other ways to impose new tariffs, such as via Section 232 or Section 301.

Yes. Among other policy changes, Canada has extended tariffs on certain U.S. imports and Mexico is setting new tariffs on China and other countries. Additionally, a number of nations are reevaluating their exemption for low-value imports; some are looking to lower the de minimis threshold, while others may eliminate de minimis altogether, as the U.S. has done.

This blog post has been updated to reflect new developments. It was originally published on January 14, 2026.