Trade this week is running hot on multiple fronts. The Federal Circuit’s ruling against IEEPA tariffs is already heading toward a Supreme Court showdown this November, while the administration presses ahead with a new Japan tariff deal and prepares for the USMCA’s upcoming review. Mexico is weighing tariffs on China and other non-FTA partners even as manufacturers ramp up cross-border investments that could benefit cross-border trucking groups like Werner. Commerce quietly delayed its Section 232 auto parts process, but Trump is keeping momentum alive by announcing revived trade talks with India and an upcoming call with Prime Minister Modi. - JR

Provided by: JR Holcomb, Director of Foreign Trade Operations, Alliance Corridor, Inc.

Trump: U.S., India reviving trade talks, will speak with Modi soon

President Trump announced Tuesday that the U.S. and India will restart trade negotiations aimed at reducing trade barriers, signaling optimism about reaching a deal with Prime Minister Narendra Modi despite recent tensions. The announcement marks a sharp shift from last week, when Trump criticized India alongside Russia and China, accusing them of aligning too closely. The U.S. recently doubled tariffs on Indian goods to 50 percent, citing both efforts to reduce the U.S. trade deficit and India’s continued imports of Russian oil. While Trump previously hinted that an agreement with India was close, he backed off before his Aug. 1 deadline, escalating tensions further. Modi, meanwhile, has sought to repair relations with China, including a visit to Beijing last week. Reports also suggest Trump has pressed the European Union to impose tariffs on India and China over their Russian oil purchases, offering to match EU duties if enacted. The renewed negotiations could ease strained ties, though additional U.S. tariffs remain on the table.

Supreme Court takes up IEEPA tariff suits for argument in November

The Supreme Court has agreed to hear challenges to President Trump’s International Emergency Economic Powers Act (IEEPA) tariffs on an expedited basis, setting oral arguments for early November and raising the possibility of a ruling before year’s end. In an unusual move, the justices consolidated two major cases—V.O.S. Selections v. Trump, where the Federal Circuit struck down the tariffs, and Learning Resources v. Trump, where a district court in Washington, DC, reached a similar conclusion—into a single review. The consolidation not only broadens the pool of plaintiffs, including state attorneys general and small businesses, but also allows the Court to address jurisdictional disputes over whether such challenges belong in the Court of International Trade or other federal courts. While most judges have ruled that CIT is the proper venue, the Learning Resources plaintiffs successfully argued otherwise, creating a split the Court will now resolve. The Justice Department will submit its opening brief on Sept. 19, challengers will respond Oct. 20, and DOJ will reply by Oct. 30, with oral argument scheduled for the week of Nov. 3–7. The case is widely seen as pivotal in determining the scope of presidential authority to impose tariffs under emergency powers.

Werner expects cross-border benefits as manufacturers invest more in Mexico

Werner Enterprises CEO Derek Leathers expressed optimism that Mexico’s surging foreign direct investment (FDI) will drive long-term growth in cross-border trucking demand. Mexico attracted over $55 billion in FDI during the first half of 2025, surpassing last year’s record, with nearly half coming from the U.S. and Canada. Leathers emphasized that this North America–heavy mix signals strong potential for trucking as investment typically evolves in stages: boosting shifts at existing plants, expanding equipment and productivity, and ultimately building new facilities. The third stage, he noted, is especially significant since many goods produced will be exported to the U.S., creating steady freight needs. 

Sheinbaum: Mexico weighing tariffs on China, other non-FTA partners

Mexican President Claudia Sheinbaum announced that her government is considering expanding tariffs on non-free trade agreement partners, including China, as part of a broader trade policy shift. Bloomberg reported the move could be included in Mexico’s upcoming budget proposal, following Sheinbaum’s earlier pledge to review Chinese imports that have been harming Mexican industry. Mexico has already raised duties on certain goods like steel and textiles from non-FTA countries, and earlier this year it suggested matching U.S. tariffs on China during bilateral talks. Her remarks came after high-level meetings in Washington and Mexico City, where Mexican Economy Minister Marcelo Ebrard met U.S. lawmakers and Secretary of State Marco Rubio discussed trade, security, and border issues with Sheinbaum. The U.S. continues to impose national security duties on Mexican steel, aluminum, and autos, while also raising concerns about tomatoes and livestock imports. Both governments are preparing for the 2026 USMCA review, which Sheinbaum and Rubio described as an opportunity to strengthen trade ties. 

US enacts Japan tariff deal

On Sept. 4, President Donald Trump formalized a trade agreement with Japan that sets a uniform 15% tariff on nearly all Japanese imports, retroactive to Aug. 7, with shippers eligible for customs refunds under standard procedures. Goods previously charged less than 15% will see duties raised to meet the new rate, while goods above 15% remain unchanged, aligning U.S. tariff structures with the EU. The deal also establishes exemptions, including a 0% rate for scarce natural resources and some pharmaceuticals, while automobiles and auto parts from Japan will face only 15% tariffs instead of the 25% Section 232 rate. U.S.-made vehicles certified to U.S. safety standards will be accepted in Japan without extra testing. Beyond tariffs, Japan agreed to boost U.S. rice imports by 75%, purchase $8 billion annually in agricultural goods, and buy U.S. commercial and defense aircraft, including 100 Boeing planes. The agreement also commits Japan to $550 billion in U.S. investments, aimed at expanding domestic manufacturing and creating jobs. Overall, the deal is designed to reduce the $68 billion U.S. trade deficit with Japan, which accounted for 4.3% of total U.S. trade in 2024.

Commerce delays Section 232 auto parts inclusions process

The Commerce Department has delayed plans to open a process for expanding the list of auto parts subject to 25 percent national security tariffs under Section 232, despite initially saying the procedure would begin July 1. The process, expected to mirror one used earlier this year for steel and aluminum tariffs, would allow stakeholders to petition for additional auto-related goods to face duties. While Commerce said the framework was “established” in June, no Federal Register notice has yet been issued, and the department has not provided updates. Business groups, including automaker and supplier associations, have warned that expanding the list without adequate safeguards could disrupt U.S. supply chains, particularly for parts not produced domestically, and urged Commerce to provide longer comment periods and consider the complexity of Section 232 measures. An industry source suggested the delay may reflect administration concerns about unintended impacts of new duties.

U.S., Mexico, Canada eye USMCA review as bilateral talks continue

Officials from the U.S., Mexico, and Canada are beginning preparations for the first statutory review of the U.S.-Mexico-Canada Agreement (USMCA), due by July 1, 2026, while separate bilateral trade talks on U.S. tariffs continue. Under USMCA rules, the three governments must conduct a joint review next year, with U.S. consultations set to begin this fall, including a Federal Register notice in October and a USTR report to Congress by January. So far, the Trump administration has exempted USMCA trade from its emergency tariffs, though Mexico and Canada still face U.S. duties on steel, aluminum, and autos. Analysis suggests both countries have fared better under USMCA’s carveouts than other U.S. trading partners. Canadian Prime Minister Mark Carney emphasized the deal’s advantages but said Canada is preparing to improve it, with a focus on strategic sectors vulnerable to U.S. national security tariffs. Carney also discussed trade issues with Trump earlier this week and is planning a trip to Mexico to coordinate further with President Claudia Sheinbaum.

Federal Circuit holds IEEPA tariffs illegal, teeing up Supreme Court appeal

The U.S. Court of Appeals for the Federal Circuit ruled that President Trump lacked the legal authority under the International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs on nearly all trading partners, dealing a major setback to his trade agenda. In a 127-page opinion, the court found that IEEPA’s power to “regulate importation” cannot be stretched to justify tariffs of unlimited scope, duration, and amount, which Trump enacted through emergency declarations targeting trade deficits and fentanyl smuggling. The majority emphasized that Congress never clearly delegated such sweeping authority and invoked the Supreme Court’s “major questions doctrine” to reinforce its limits. While some judges went further, arguing IEEPA does not authorize tariffs at all, four dissenting judges maintained that the law does allow broad presidential discretion. The ruling is paused until Oct. 14 to allow Trump to appeal to the Supreme Court, which could ultimately decide the issue. Trump immediately blasted the decision as destructive to the U.S. and vowed to seek reversal, insisting tariffs are essential to strengthening American industry.