Executive summary

This edition of Trade Talking Points provides updates on trade policy developments, including the United States (US) imposing Section 388 tariffs on Canadian goods, the US Trade Representative (USTR) announcing the outcome of the Section 301 investigation into Brazil, and the United Kingdon (UK)-India FTA entering into force.

Latest US trade policy announcements

US and Mexico commence third round of USMCA Joint Review

On 21 July 2026, the US and Mexico commenced the third bilateral negotiating round related to the Joint Review of the United States-Mexico-Canada Agreement (USMCA).

The negotiations will take place over three days and will advance discussions on issues including trade in steel and aluminum derivative products, automobiles, economic security, labor, agriculture and electronic payment services.

USTR Jamieson Greer acknowledged that Mexico had made progress in the following areas: economic security, intellectual property, customs and trade facilitation, the environment and telecommunications equipment.

US imposes Section 388 tariffs on Canadian goods

On 20 July 2026, US President Trump signed three Proclamations pursuant to Section 388 of the Tariff Act of 1930, imposing an additional 50% tariff on certain Canadian goods.

The signing of the Proclamations is in response to Canada's alleged discriminatory treatment of American alcoholic beverages, dairy products and motor vehicles.

The signed proclamations will apply the following measures:

• Each Section 388 Proclamation imposes a 50% import tariff on Canadian goods, including wine and cement.
• The Section 388 tariffs apply to all covered goods regardless of whether the goods qualify as originating under the USMCA.
• The Section 388 tariffs will not apply to energy, potash, products subject to Section 232 tariffs or other goods, such as fish and critical minerals.

The tariffs imposed under the Proclamations will apply to goods entered for consumption or withdrawn from a warehouse for consumption, on or after 12:01 a.m. Eastern Time on 19 August 2026.

See EY Global Tax Alert, US imposes additional 50% tariff on certain Canadian imports under Section 338, dated 21 July 2026.

President Trump signs Proclamation encouraging domestic aluminum investment

On 20 July 2026, President Trump signed a Proclamation under Section 232 of the Trade Expansion Act of 1962 to address the national security threat posed by imports of

aluminum into the US and to increase investment in the US aluminum industry.

The Proclamation authorizes and directs the US Secretary of Commerce to establish an incentive program for companies to invest in building, expanding or refurbishing

aluminum smelters in the US.

The proposed program will require companies to submit onshoring plans and, if those plans are approved, the companies will be eligible to import a volume of

aluminum into the US at a tariff rate equal to half of the otherwise applicable Section 232 rate.

The quantity of aluminum that a company may import at the reduced rate will depend on the level of investment set out in its approved onshoring plan.

See EY Global Tax Alert, US announces aluminum production incentive program and new defense supply chain requirements for critical materials, dated 21 July 2026.

USTR announces outcome of Section 301 investigation into Brazil

On 15 July 2026, the Office of the USTR announced the outcome of its investigation under Section 301 of the Trade Act of 1974 into Brazil's trading practices.

The investigation determined that Brazil's acts, policies and practices relating to digital trade and electronic payment services, unfair preferential tariffs, anti-corruption enforcement, intellectual property protection, ethanol market access and illegal deforestation are unreasonable and burden or restrict US commerce.

In response to the findings of the investigation, the US has imposed a 25% import tariff on certain Brazilian goods entered for consumption or withdrawn from a warehouse for consumption, on or after 12:01 a.m. Eastern Time on 22 July 2026.

See EY Global Tax Alert, USTR issues Notice of Action imposing 25% Section 301 tariffs on imports from Brazil, effective 22 July 2026, dated 16 June 2026.

US commences Section 232 negotiations on commercial aircraft, jet engines and associated parts

On 9 July 2026, President Trump signed a Proclamation in accordance with Section 232 of the Trade Expansion Act of 1962, directing the US Secretary of Commerce and the USTR to negotiate agreements with US trading partners to address the threat to national security posed by imports of commercial aircraft, jet engines and associated parts.

The Proclamation followed an investigation undertaken by the US Secretary of Commerce into the effects of imports of commercial aircraft, jet engines and associated parts on the national security of the US.

As a result of the Proclamation, the Secretary of Commerce and the USTR will commence negotiations on agreements, or continue existing negotiations, to address the alleged impairment of national security caused by the import of these goods.

If negotiations do not result in an agreement within 180 days, or if any agreement proves ineffective, the Proclamation states that President Trump may consider alternative remedies, including the imposition of tariffs, to ensure that imports of these goods do not threaten US national security.

Latest UK trade policy announcements

UK-India FTA enters into force

On 15 July 2026, the UK-India Free Trade Agreement (FTA) entered into force.

Under the UK-India FTA, both parties have agreed that:

• India will remove or reduce tariffs on 90% of tariff lines for UK goods. A total of 64% of products became duty-free from 15 July 2026, covering approximately £1.9b of UK exports. Over the next decade, 85% of UK goods will become duty-free.
• The UK will provide duty-free access for 99% of Indian goods entering the UK from 15 July 2026.
• Tariffs on UK exports of whisky and gin will be reduced from 150% to 75%, with a further reduction to 40% after staging (i.e., following completion of the agreed phased tariff reductions).
• UK car manufacturers will benefit from a tariff-rate quota, with tariffs as high as 100% reduced to 10%.

The FTA is forecast to increase bilateral trade by £25.5b per year.

UK launches consultation on deepening trade relationships

On 14 July 2026, the Department for Business and Trade (DBT) launched a consultation on how the UK can deepen trade relationships with Indonesia, the Philippines, the United Arab Emirates (UAE) and Uruguay.

The purpose of the consultation is to provide stakeholders with the opportunity to express their views on the opportunities, priorities and considerations associated with deepening the UK's trade relationships with these economies, either through their accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or through other trade policy mechanisms. (The CPTPP is a trade bloc comprising 12 member nations, including Australia, Canada, Japan and the UK.)

The CPTPP established an Accession Working Group with Uruguay in 2025. In addition, on 26 June 2026, the CPTPP announced the start of preparatory discussions on accession with Indonesia, the Philippines and the UAE.

The consultation closes on 14 September 2026.

UK Government releases draft legislation to remove de minimis relief for low-value imports

On 13 July 2026, the UK Government released draft legislation outlining its approach to removing de minimis relief for low-value imports (LVIs), making them subject to any applicable customs duty.

The removal of relief for LVIs is in response to the complaints from British retailers that cheap imports from e-commerce platforms are harmful to the British retail industry.

The legislation will come into effect by October 2028, at the latest.

UK and Switzerland conclude negotiations for enhanced FTA

On 13 July 2026, the UK and Switzerland concluded negotiations for an enhanced UK-Switzerland FTA. The enhanced agreement builds upon the existing UK-Switzerland-Liechtenstein Trade Agreement, which came into effect on 1 January 2021.

It is estimated that the agreement will unlock £5.2b a year in additional UK services exports to Switzerland.

The key terms of the enhanced FTA include:

• Enhanced commitments are made on data flows, including guarantees that unjustified restrictions on the free flow of data cannot be introduced in the future.
• Switzerland will maintain current levels of market access for UK services firms and prevent the introduction of new regulations that would make it harder for UK businesses to operate.
• For the first time in a trade agreement, Switzerland has committed, with regard to a number of sectors, not to introduce requirements for UK firms to hire a percentage of Swiss nationals for their Swiss subsidiaries.

Before the enhanced agreement enters into force, the UK and Switzerland will complete their ratification processes.