Commerce Initiates Section 232 Investigation On Drones and Polysilicon from China
On July 16, 2026, the U.S. Department of Commerce launched new Section 232 investigations on imports of Chinese drones and polysilicon. Drones and polysilicon are both currently subject to additional tariffs of 55% and 80%, respectively. The new investigations aim to assess whether further tariffs or quotas are needed to protect national security, focusing on issues like market dominance, subsidies, and the impact on U.S. industries. This announcement follows concerns raised by Congress that current tariffs have not curbed the influx of Chinese drones, which are seen as a threat to the growth of the domestic drone sector critical to national defense. Public comments may be filed until August 6th at www.regulations.gov and further information on the filing process and procedures can be found here for drones and here for polysilicon.
BIS Allows Nvidia and AMD to Resume Shipping Certain AI-Related Goods to China
On July 14, 2025, Nvidia announced a significant shift in the Trump administration’s international trade policy: Nvidia and AMD will be allowed to resume sales of certain AI chips to China, following a period of strict export controls aimed at curbing Beijing’s access to advanced technology. After securing assurances from Washington, Nvidia will be able to export its H20 artificial intelligence accelerator to China, and AMD has received similar approval for its MI308 chips. This marks a reversal from previous restrictions under both the Biden and Trump administrations, which had effectively banned the sale of high-performance AI chips to China in an effort to limit the country’s technological and military advancements.
The decision is expected to have a major positive impact on Nvidia’s business, potentially restoring billions in revenue that had been written off due to the earlier export bans. The move comes after Nvidia repeatedly redesigned its products to comply with U.S. regulations, and amid ongoing discussions between U.S. and Chinese officials to ease trade tensions. The change in policy also led to a surge in tech stocks, with Nvidia, AMD, and Chinese technology companies like Alibaba and Beijing Sinnet Technology seeing significant gains.
Despite the approval, U.S. officials emphasized that there is no intent to increase China’s access to the most advanced American semiconductor technology, and that the export controls on Nvidia’s H20 chip are still in place for the highest-end products. The development reflects the importance of the Chinese market for U.S. tech companies and highlights the delicate balance policymakers are trying to strike between protecting national security and supporting American business interests in a key global market. This move could also help stabilize global supply chains and is seen as a positive step for U.S.-China relations.
U.S. Reaches a Trade Deal With Indonesia
On July 15, 2025, U.S. President Donald Trump announced that a tentative trade agreement with Indonesia has been agreed upon with a likely 19% tariff on Indonesian exports to the United States. According to the social media post, the U.S. is supposed to gain full access to Indonesia’s markets. This proposed deal follows after the Trump administration issued a warning to the Indonesian President that tariff rates for Indonesia could be as high as 32% in the event an agreement was not reached.
Canada, Mexico, and the European Union Receive Tariff Letters
In a series of letters issued last week, President Donald Trump warned major U.S. trading partners—Canada, Mexico, and the European Union (EU)—of impending tariffs set to take effect on August 1, 2025, unless satisfactory trade agreements are reached. The proposed tariffs include a 35% duty on Canadian imports and a 30% duty on imports from Mexico and the EU.
Canada
The letter to Canada cites the country’s failure to curb the flow of fentanyl into the United States and other trade barriers, including dairy policies. Canada is currently subject to a 25% tariff for fentanyl concerns under the International Emergency Economic Powers Act (“IEEPA”). If the IEEPA tariffs are withdrawn, a “reciprocal” tariff rate of 12.5% would apply to Canadian goods.
Currently, United States-Mexico-Canada Agreement (“USMCA”) qualifying goods are exempt from existing tariffs; however, the recent letter does not clarify whether these exemptions will continue. Additionally, it warns that transshipped goods will face higher tariffs, and an extra 35% tariff will be imposed if Canada retaliates.
Mexico
The letter to Mexico highlights the country’s “failure to stop the Cartels” and mentions trade barriers. Similar to Canada, Mexico is currently subject to a 25% IEEPA fentanyl tariff, with a provision for a 12.5% “reciprocal” tariff if the IEEPA tariffs are lifted. The letter lacks clarity on USMCA exemptions and includes warnings about penalties for transshipment and an additional 30% tariff in case of retaliation.
European Union
The European Commission received a letter threatening a 30% tariff, stating that this rate is “far less than what is needed to eliminate the trade deficit.” The letter emphasizes the U.S. expectation for “complete, open market access.” While EU retaliatory tariffs have been suspended pending further negotiations.
CBP Launches Enhanced Dashboard for Tracking Withhold Release Orders and Findings
CBP has launched an enhanced Withhold Release Orders (WROs) and Findings Dashboard, offering a user-friendly, interactive tool for tracking enforcement actions related to forced labor. The dashboard displays all active WROs and Findings issued by CBP from 1950 to the present, with real-time updates as new actions are taken. Users can easily view the latest statistics by country, industry, and merchandise, filter results by various criteria, download data for analysis, and access related press releases and Federal Register notices. The dashboard is available at cbp.gov, with additional resources and data sets found on the CBP Data Portal. Users can contact forcedlabor@cbp.dhs.gov with any questions or feedback.
Expect Section 232 Pharmaceutical Tariffs Before Aug. 1
President Trump said on July 15th that Section 232 tariffs on pharmaceuticals will likely begin at the end of July. These tariffs will be implemented slowly, with a lower rate for the first 12-18 months to allow time for companies to reconfigure their supply chains and encourage domestic production. President Trump indicated that similar tariffs on semiconductors will follow the same timeline, noting that chip tariffs are “less complicated.”
Customs Issues Guidance on Applying Section 232 Tariffs to Passenger Vehicles & Light Trucks
U.S. Customs and Border Protection has issued new guidance on how to apply Section 232 tariffs on imports of passenger vehicles and light trucks at a rate of 25% pursuant to Presidential Proclamation 10908, if those goods qualify for preferential tariff treatment under USMCA. Effective April 3, 2025, Customs clarified that the 25% tariff will be applied exclusively to the value of the non-U.S. content in these approved vehicles.
Importers must report both the non-U.S. and U.S. content values on separate lines when filing entries: the first line for the non-U.S. content (subject to the 25% duty under HTSUS 9903.94.03) and the second line for the U.S. content (subject to 0% duty under HTSUS 9903.94.02). Both lines must include the same HTSUS code and country of origin, and all other applicable duties, such as antidumping and countervailing duties, must be reported.
