Background
With continued developments in US trade policy, please see this week’s key updates With continued developments in US trade policy, please see this week’s key updates in our latest round-up on tariffs, global tax and beyond.
Carrying on from 2025 being the year of US Tariffs, 2026 looks set to be another year with key developments in this space.
While we predicted that there would be a challenging start to 2026, our expectation was that this would centre around the US Supreme Court ruling on IEEPA and the implementation of further Section 232 measures. However, while the outcome of these matters will still be of keen interest in the coming weeks, the immediate issue of Greenland, the proposed US tariffs in respect of this and the reaction of the EU is now of most importance.
The week in summary
President Trump threatens new tariffs on Europe in bid to buy Greenland
On Saturday, 17 January, President Trump announced that he intends to impose a series of escalating tariffs on several European partners unless the US is permitted to purchase Greenland, intensifying an ongoing dispute over the future of the large Arctic territory which is part of the Kingdom of Denmark.
Posting on Truth Social, President Trump stated his intention to impose a new 10% tariff, from 1 February, to “any and all goods sent to the United States of America” from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and the United Kingdom – countries already facing earlier tariff measures from his administration.
According to President Trump, those duties would rise to 25% on 1 June and remain in place until an agreement is reached for the US to acquire Greenland. He posted on Truth Social;
"On 1 June 2026, the Tariff will be increased to 25%. This Tariff will be due and payable until such time as a Deal is reached for the Complete and Total purchase of Greenland. These countries, who are playing this very dangerous game, have put a level of risk in play that is not tenable or sustainable. Therefore, it is imperative that, in order to protect Global Peace and Security, strong measures be taken so that this potentially perilous situation end quickly, and without question,"
As no corresponding Executive Order has been published, it remains unclear exactly which products will be in scope of this additional tariff, whether it will stack on top of all existing tariffs and if there will be any exemptions. Given the intention of this measure is to exert pressure, it is highly likely that there will be no exemptions and the 10% will stack on top of any and all existing measures.
President Trump has repeatedly maintained that he will accept nothing short of full ownership of the island, which is a self-governing part of the Kingdom of Denmark. Officials in both Denmark and Greenland has firmly rejected the idea, stressing that the territory is not for sale and has no interest in joining the United States.
EU and Irish Reaction
EU leaders are set to hold an emergency summit this week to discuss the bloc’s response to President Trump’s push to acquire Greenland and the announcement of additional tariffs on a number of EU Member States.
According to a senior European Commission official, an EU counter-tariff package prepared last year, targeting €93 billion in US goods, is now being actively considered as a potential retaliatory measure. This would be a repurposing of a set of measures, published in mid-205, which were originally proposed as retaliation to US tariffs.
As a reminder, the EU package of tariffs includes the original countermeasures to the steel and aluminium tariffs, on €21 billion of US goods, including poultry and alcohol, and a further set of countermeasures on €72 billion of US exports, which has included the automotive and aircraft industry.
European Council President António Costa, who presides over EU summits, warned the bloc is prepared to protect itself from “any form of coercion”.
French officials are reportedly urging the EU to activate its Anti-Coercion Instrument (ACI) to put pressure on major US companies and push President Trump to abandon his bid to take control of Greenland. For reference, the ACI is a broad instrument which can include restrictions on US foreign direct investment and intellectual property protections and limit access to the EU market for US companies.
In Dublin, officials are increasingly worried that the Greenland dispute could unravel the EU/US trade agreement concluded last summer. The Irish Government believes such a breakdown would carry significant economic risks. Briefing papers prepared for Tánaiste Simon Harris, released a day before President Trump’s comments, described the deal as “of critical importance” to Ireland. According to the Department of Finance, the agreement offered:
“a better outcome for households and firms than the alternative landscape that would have almost certainly included higher tariffs, scope for retaliation and escalation and, ultimately, a higher degree of uncertainty”
The Department also noted that the deal “provides an important shield to Irish exporters that could have been subject to much larger tariffs.”
IEEPA tariff case: Decision still forthcoming
The US Supreme court was expected to issue its decision regarding the tariffs imposed under the International Emergency Economic Powers Act (IEEPA), a regime that has generated more than $140 billion in revenue and has been used to apply broad tariff measures in response to national emergencies.
As a reminder, IEEPA has served as a basis for tariffs applied across nearly all US global trading partners including, China, Canada, Mexico, Brazil and India. Other tariff authorities, such as Sections 232, 201 and 301, remain outside the scope of this case.
While the decision of the Supreme Court is still unclear, there are a number of potential outcomes, as follows:
- The US Supreme Court upholds the lower court's decision and rules that the President does not have authority under IEEPA to impose tariffs.
- The Supreme Court confirms that the President does have authority under IEEPA to impose tariffs.
If the Supreme Court upholds the lower court decision, this may lead to the possibility of refunds for any tariffs incurred under the IEEPA regime from 2025 onward.
The Supreme Court has not yet issued a ruling. At this stage, there is no change to the existing tariff measures, and no implementation guidance has been released by US CBP (Customs and Boarder Protection) or other trade agencies.
We are continuing to monitor developments closely. Once the Supreme Court issues its decision, whether it affects the validity of IEEPA-based tariffs, potential refunds for unliquidated entries, or the future role of Congress in shaping tariff authority, we will provide a detailed update. We will keep you informed as soon as further information becomes available.
Semiconductor Investigations
In December 2025 and January 2026, the US administration has advised the outcome of two separate investigations into the semiconductor industry;
Section 232
On 14 January, President Trump issued an Executive Order outlining the findings and corresponding actions in respect of the ongoing Section 232 investigation in the effects of imports of semiconductors (semiconductors or chips), semiconductor manufacturing equipment, and their derivative products on the national security of the United States.
Stemming from this investigation, the US administration will take a two-phase approach into the implementation of tariffs in respect of applicable products;
Phase 1 includes the imposition of a 25% tariff on covered products (see below)
Phase 2 includes the possible imposition of a broader range of tariffs (rate to be determined) on semiconductors pending the conclusion of ongoing trade negotiations with jurisdictions that have the potential to strengthen the United States semiconductor industry.
As outlined above, Phase 1 sees the imposition of 25% tariffs on all covered goods entered for consumption, or withdrawn from warehouse for consumption, on or after 15 January. Importantly, where a product is covered by this new measure, they are not subject to other tariff measures (e.g. country specific reciprocal tariffs).
The products within scope of this measure include products classified in the following HTSUS subdivision;
8471.50 (Automatic data processing machines and units; Processing units)
8471.80 (Automatic data processing machines and units; Other units of automatic data processing machines)
8473.30 (Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of headings 8470 to 8472)
It should be noted that Chapter 84 of the HTS primarily applies to Automatic Data Processing Machines (e.g. computers) whereas, traditionally, Semiconductors will fall within Chapter 85.
Additionally, where a product is within one of the above subheadings, it must be a logic integrated circuit, or an article that contains a logic integrated circuit, that meets the technical parameters of having:
- a total processing performance greater than 14,000 and less than 17,500, and a total DRAM bandwidth greater than 4,500 GB/s and less than 5,000 GB/s; or
- a total processing performance greater than 20,800 and less than 21,100, and total DRAM bandwidth greater than 5,800 GB/s and less than 6,200 GB/s.
Notwithstanding the above, even where a product is within scope of this tariff measure, certain exceptions apply and the duty rate shall not be imposed to imports of those products for use in;
United States data centres,
for repairs or replacements performed in the United States,
for research and development in the United States,
for use by startups,
for non-data centre consumer applications in the United States,
for use in non-data centre civil industrial applications in the United States,
for use in United States public sector applications, or
for other uses that the Secretary determines contribute to the strengthening of the United States technology supply chain or domestic manufacturing capacity for derivatives of semiconductors.
Section 301
On 23 December, the Office of the United States Trade Representative published its findings under a Section 301 investigation and outlined a notice of action on the semiconductor industry of China.
This Section 301 investigation was originally launched in December 2024 under the Biden administration and is separate to the Section 232 investigation noted above.
The outcome of this Section 301 investigation is for the immediate implementation of an initial tariff of 0%, which will be raised after 18 months to a rate to be announced at least 30 days before the implementation date. The new duty would stack upon the existing 50% tariff on semiconductors from China already in place following a Section 301 probe into forced technology transfer.
President Trump announces 25% tariff on countries trading with Iran
On Monday, 12 January, President Trump announced that the US will impose a 25% tariff on any country that continues to trade with Iran, as Washington considers how to respond to the largest anti-government protest Iran has seen in years. President Trump wrote on ‘Truth Social’:
“Effective immediately, any Country doing business with the Islamic Republic of Iran will pay a Tariff of 25% on any and all business being done with the United States of America”
Iran, a member of OPEC, has long been subject to extensive US sanctions. It exports most of its oil to China, while Turkey, Iraq, the United Arab Emirates and India are among its other major trading partners. “The order is final and conclusive” President Trump added.
As of Monday, the White House had not published any official documentation outlining the policy, its legal basis, or whether it would apply to all of Iran’s trading partners.
US postpones tariff hike on furniture
On 31 December, President Trump postponed planned tariff increases on upholstered furniture, kitchen cabinets, and vanities for one year, delaying their implementation until 2027, according to a White House statement.
The proclamation, signed just hours before the end of 2025, pushes back tariff hikes that had been scheduled to take effect on 1 January 2026. President Trump first imposed new 25% tariffs on kitchen cabinets and upholstered furniture in September 2025, with the measures taking effect in October. Those rates were set to rise to 50% and 30%, respectively, by 2026. This order pauses those increases, keeping tariffs on the affected goods at 25% for now.
Next Steps
The coming days promises to bring a number of key updates, with the Supreme Court ruling potentially coming as soon as Tuesday 20 January, President Trump due to meet global business leaders and speak at the World Economic Forum in Davos on Wednesday and EU leaders due to meet on Wednesday to vote on the delay of the EU – US Trade Deal.
We will keep you updated as this situation progresses and the impact to business becomes clear.
We’re here to help you
Keeping up to date with US trade policies, trade agreements and new and existing tariff reviews which may lead to further tariff measures is crucial to assessing the risk to your supply chain and the impact these tariffs may have. Understanding your product portfolio and the impact that tariffs may have on your imports is an important first step. We are here to support your business with this analysis and navigating these choppy waters.
Specialist Tax Services
Helping businesses navigate risks and realise opportunities.
Contact us
Menu