24 February 2026 Trade Talking Points | Latest insights from EY's Trade Strategy team (23 February 2026) This edition of Trade Talking Points provides updates on the United States (US), European Union (EU), United Kingdom (UK) and China Trade Policy developments, including the potential removal of the First Sale for Export structure, reciprocal trade deals, the UK Carbon Border Adjustment Mechanism (CBAM) and the removal of the EU's de minimis threshold. The US Supreme Court issued a 6-3 decision on 20 February 2026, holding that the International Emergency Economic Powers Act (IEEPA) does not give the US President authority to impose tariffs. The decision (Learning Resources Inc., et al. v. Trump) involves tariffs imposed under IEEPA to address drug trafficking and "reciprocal" trade deficits, concluding that Congress did not clearly delegate its core taxing/tariff power through IEEPA's authority to "regulate … importation." The decision strikes down tariffs imposed under IEEPA on goods from Canada, Mexico and China, as well as global 10% and country-specific tariffs. The decision also invalidates the potential for tariffs pursuant to executive orders related to Venezuela, Russia, Iran, Brazil and Cuba. The Court did not decide the scope of duty refunds; the issue was remanded to lower courts and ultimately the US Court of International Trade to instruct on the scope and mechanics of relief. Refunds, if authorized and distributed in full, could total up to roughly US$170b. Shortly after the Supreme Court's decision was released, the Trump Administration took a number of actions amending previous executive orders, imposing new tariffs under Section 122 of the Trade Act of 1974, and detailing investigations that may be forthcoming under Section 301 of the Trade Act of 1974. The White House issued a Fact Sheet detailing these new actions. Specifically, President Trump signed an Executive Order (EO) on 20 February stating that the Canada, Mexico, China, global and country-specific tariffs are no longer in effect and that US Customs and Border Protection (CBP) should end collection of the tariffs "as soon as practicable." The EO also makes clear that the national emergencies declared pursuant to the previous EOs "remain in effect and shall not be affected by this order." A second Executive Order issued on 20 February continues the suspension of the de minimis privilege and clarifies duty rates for international postal shipments. President Trump also issued a Proclamation detailing a temporary import surcharge of 10% ad valorem, on articles imported into the United States, effective 24 February 2026 under Section 122 of the Trade Act of 1974 for a period of 150 days (until 24 July 2026). Importantly, paragraph 14 of the Proclamation outlines exceptions from the tariffs, aligned closely with products covered under Annex II under the previous "reciprocal" or country-specific tariffs and including products such as energy and energy products, pharmaceuticals, certain electronics, passenger vehicles, products covered by tariffs under Section 232 of the Trade Expansion Act of 1962, products qualifying under the U.S.-Mexico-Canada Agreement (USMCA), as well as textiles qualifying under the Dominican Republic-Central Americal Free Trade Agreement (DR-CAFTA). The Proclamation also includes an exemption for goods that (1) were loaded onto a vessel at the port of loading and in transit on the final mode of transit prior to entry into the United States, before 12:01 a.m. ET on 24 February 2026; and (2) are entered for consumption, or withdrawn from a warehouse for consumption, before 12:01 a.m. ET, 28 February 2026. Finally, the Proclamation clarifies that the 10% tariff will not apply to goods subject to Section 232 tariffs, but it will stack on top of any other applicable duties. While monitoring case developments from the lower courts for refund eligibility criteria, timing and procedural steps, businesses should maintain compliance with all other applicable tariffs and trade remedies unaffected by the Court's ruling. Affected entities may want to consider building scenario plans for pricing, contracts and supply chains, among other measures. For more information, see: EY Global Tax Alert, US Supreme Court rules IEEPA does not authorize presidents to impose tariffs, dated 20 February 2026: WCEY Alert, Presidential Proclamation imposing 10% duties, and other actions, dated 23 February 2026; and EY Global Tax Alert, US implements global 10% import tariff under Section 122 of the Trade Act of 1974, dated 24 February 2026. On 11 February 2026, US Senators Bill Cassidy (R-LA) and Sheldon Whitehouse (D-RI) introduced a bill — the Last Sale Valuation Act — to eliminate the use of the "first sale" rule for the export of goods to the US. The proposed legislation seeks to amend Section 402 of the Tariff Act 1930 to require the value of the last sale that introduces goods into the US to be used for customs valuation purposes, rather than an earlier price paid in a transaction destined for the US. As of 18 February 2026, the bill had been read twice, and will now be subject to review by the US Senate Committee on Finance. The bill will follow the standard US legislative process, where it will likely need to find a legislative vehicle to move through Congress, and be passed by the Senate and House of Representatives and signed into law by the President. There is no set timeline for the bill's review or potential passage, and it is unlikely the bill will be subject to expedited procedures. As a result, the immediate advancement of the bill seems unlikely. However, businesses must be aware of the potential risk to existing First Sale for Export structures and, where appropriate, consider alternatives that remain permitted by US Customs and Border Protection. On 13 February 2026, the US and Ecuador concluded negotiations on an Agreement on Reciprocal Trade. Once finalized and signed, the agreement aims to promote bilateral economic prosperity and expand trade and investment between the US and Ecuador. On 12 February 2026, the US and Taiwan signed an Agreement on Reciprocal Trade.
On 12 February 2026, the US and North Macedonia agreed to an Agreement on Reciprocal, Fair, and Balanced Trade.
On 9 February 2026, the US and Bangladesh agreed to an Agreement on Reciprocal Trade.
On 6 February 2026, the US and India announced a framework for an Interim Agreement regarding reciprocal trade. The framework outlines both countries' commitment to continuing negotiations on the US-India Bilateral Trade Agreement, which were launched on 13 February 2025.
On 6 February 2026, President Donald Trump announced via Executive Order that an additional ad valorem rate of duty could be placed on goods from any country that directly or indirectly purchases, imports or acquires goods and services from Iran. Note that although this Executive Order became effective from 12:01 a.m. ET on 7 February 2026, it was also nullified under the US Supreme Court's decision on 20 February 2026. On 5 February 2026, the US and Argentina signed the US-Argentina agreement on reciprocal trade and investment. The 5 February 2026 announcement is an update from November 2025 when the agreement was first announced.
On 11 February 2026, the European Council formally approved the abolition of customs duty relief for items contained in small parcels entering the EU, often via e-commerce methods. Under the new framework, the existing customs duty exemption for consignments valued below €150 will be abolished and replaced by a temporary €3 customs duty that will be levied on the different categories of items contained in a parcel, identifiable by their unique tariff subheading. The €3 customs duty will apply from 1 July 2026 to 1 July 2028 and remain applicable to items contained in small parcels valued at less than €150 sent directly to consumers in the EU. It is expected that the EU customs data hub will become active by 2028, and the temporary €3 customs duty will be replaced by the normal EU customs tariff system. On 10 February 2026, HM Revenue & Customs (HMRC) opened the consultation process on draft secondary legislation for the UK's Carbon Border Adjustment Mechanism (UK CBAM). An accompanying policy summary was also released. The consultation process seeks to gather feedback from stakeholders on the drafting of the secondary legislation and ensure its alignment with broader UK CBAM policy objectives prior to introduction on 1 January 2027. The UK CBAM will apply to imports of goods from carbon-intensive sectors most at risk of carbon leakage, including aluminum, cement, fertilizers, hydrogen, iron and steel. Goods from these sectors will be in-scope when imports exceed £50,000 over a rolling 12-month period. Businesses below this threshold should not be required to register or submit CBAM returns. Responses or queries to the consultation process must be received by HMRC by 11:59 p.m. GMT on 24 March 2026. On 5 February 2026, the UK and the US announced that they had signed a memorandum of understanding (MOU) for securing the supply in the mining and processing of critical minerals and rare earths, designed to further develop the resilience and security of critical mineral supply chains in both countries.
On 14 February 2026, Chinese President Xi Jinping announced that China will apply zero-duty rates on imports from 53 African countries which have active diplomatic relations with China.
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