by Craig Brightup, The Brightup Group —
The Midterm Elections, Trade Updates, and Lame Duck Session
With Democrats sweeping the midterm elections and poised to run the next Congress starting January 2027, it will be interesting to see the extent to which they attempt to limit the President’s tariff authority. The Biden Administration did not rescind President Trump’s Sec. 301 tariffs on products from China and, in fact, added a few more products to the list. However, Trump 2.0 has imposed many more tariffs including the Sec. 301 forced labor tariffs on 60 economies and the Sec. 338 tariffs being used in its trade war with Canada.
Congress has ceded tariff authority to the executive branch over the years, and it won’t be easy to claw it back, but Democrats in the next Congress might try based on the unpopularity of tariffs which voters equate with affordability. Perhaps it’s possible that some Republicans might join such an effort, too, with the 2028 presidential election on the horizon.
Trade Updates
On Sept. 23, Treasury Sec. Bessent announced the U.S.-China trade truce set to expire Nov. 10, 2026, would be extended to Jan. 10, 2027. In conjunction with this announcement, a Sept. 23 coalition letter found here signed by IHA and IHSA was sent to the U.S. Trade Representative (USTR) requesting the suspension of Sec. 301 vessel fees aimed at China’s targeting of maritime, logistics, and shipbuilding sectors be extended, too. On Oct. 23, USTR proposed extending the suspension of vessel fees for two months beyond Nov. 9 which was supported in a second coalition letter signed by IHA and IHSA that was sent to the USTR comment portal here.
Regarding the U.S.-Canada trade war, President Trump has been reworking the scope of the 50% tariffs he’s put on certain Canadian products under Sec. 338 of the Tariff Act of 1930. Beginning Oct. 30, the tariffs no longer cover a range of goods that were previously impacted, including plywood, certain industrial machinery, and specific packaging and paper materials. However, on the flip side are other Canadian imports that are now subject to the tariffs including carpets and air conditioners.
While Trump was tweaking the list of Canadian goods covered by Sec. 338 tariffs, a lawsuit was filed by the Liberty Justice Center with the U.S. Court of International Trade (CIT) seeking their removal on behalf of a food importing company. The Liberty Justice Center was behind small business plaintiffs that beat the IEEPA tariffs and has also filed suit against the Sec. 301 forced labor tariffs.
The legal challenge to the Sec. 122 tariffs which temporarily replaced the illegal IEEPA tariffs is also moving through the court system after winning in the CIT earlier this year. And IEEPA refunds took another major step when Customs and Border Protection filed a recent declaration with the CIT that it has cleared nearly 16 million more imports as part of the third phase of the IEEPA tariff refunds process.
The Lame Duck Session
The current Congress will be back in Washington for a lame duck session through mid-December to wrap up unfinished business. Funding for the government expires on Dec. 11 and must be extended and, important for IHA members, the National Defense Authorization Act must be passed and could carry the bipartisan Combatting Organized Retail Crime Act (CORCA), H.R. 2853/S. 1404.
