Manufacturing Tariff Exemptions: How to Qualify and Apply in 2026

                                       

By: Laura Zindel

Director, Assurance

The Supreme Court’s review of President Trump’s IEEPA tariffs isn’t just legal theater—it’s got serious implications for your bottom line. While Washington negotiates trade deals and reviews the USMCA, manufacturers face a year of shifting duties, strategic exemptions, and potential refunds worth billions.

Here’s what you actually need to know about tariff exemptions in 2026.

The State of Play: Where We Stand

The U.S. Supreme Court is determining whether the President exceeded statutory authority when imposing broad tariffs under the International Emergency Economic Powers Act (IEEPA). Timing? Unclear. But if the Court rules these tariffs were unlawful, the federal government could issue approximately $133 billion in refunds to affected importers.

That’s not hypothetical money. That’s real cash that could flow back to manufacturers who’ve been paying these duties.

What’s Actually Exempt Right Now

In November 2025, the U.S. exempted nearly 250 agricultural imports from IEEPA tariffs—coffee, tea, fruits, nuts, cocoa, bread, and spices made the list. The goal? Lower import costs for items Americans can’t produce domestically without triggering food price inflation.

But manufacturers have broader exemption opportunities through several channels:

Country-Specific Agreements

China: The one-year détente lowered “opioid” tariffs from 20% to 10% through November 10, 2026. This still combines with Section 301 and Section 232 tariffs on steel, aluminum, copper, autos, and truck parts.

South Korea: Tariffs on autos and parts dropped to 15%, with reductions on certain pharmaceuticals and aviation components. South Korea removed the 50,000-unit cap on U.S. vehicle imports in return.

Switzerland: Negotiations target lowering the 39% tariff on Swiss precision industrial machinery to 15% by Q1 2026.

U.K.: Full exemption from Section 232 tariffs for U.K.-origin pharmaceuticals, pharmaceutical ingredients, and medical technology—a dramatic shift from earlier considerations of 250% duties.

USMCA: Your Best Tariff Defense

The U.S.-Mexico-Canada Agreement remains the strongest shield against the current 25% National Emergency Tariff. USMCA-compliant goods from Canada and Mexico are exempt, which makes qualifying for USMCA status more valuable than ever.

Rules of Origin: The Make-or-Break Requirements

Your product must be “originating”—meaning wholly obtained, produced, or substantially transformed in North America. Two key requirements:

Regional Value Content (RVC): A minimum percentage of your product’s value must originate from USMCA countries. Vehicles need at least 75% regional content. Electronics, machinery, and components have varying thresholds.

Tariff Shift: Non-originating materials must undergo sufficient transformation to change their tariff classification, proving substantial North American processing.

Documentation: Your Compliance Insurance Policy

Prepare and retain a Certificate of Origin with all nine USMCA-required data elements. Keep detailed records of sourcing, manufacturing, and shipping for at least five years. CBP has increased scrutiny in 2026—your documentation needs to withstand an audit.

For electronics and semiconductors, use the correct secondary classification (e.g., 9903.01.32) to claim exemptions. A 2025 Presidential Memorandum clarified that “semiconductors” now include smartphones, flat panel displays, and integrated circuits.

The USMCA Review: What’s Coming

The U.S., Mexico, and Canada must declare their intentions on July 1, 2026—stay in the agreement, withdraw, or seek changes. Washington increasingly prefers negotiating separately with Canada and Mexico and is expected to push stricter rules of origin in automotive and steel industries to prevent China from using backdoor access to U.S. markets.

If rules of origin tighten, products currently qualifying for duty-free status could become fully dutiable. That’s a material shift for manufacturers with complex North American supply chains.

What Manufacturers Should Do Now

Evaluate Your North American Sourcing

Evaluate where components and finished goods are produced. Review your bill of materials, supplier footprint, and production routing to maintain sufficient North American content. If you’re borderline on RVC thresholds now, you could be exposed if requirements increase.

Prepare for Potential IEEPA Refunds

If the Supreme Court rules IEEPA tariffs unlawful, businesses that imported affected parts, materials, or finished goods may be eligible for refunds. Start compiling documentation of all duties paid under these tariffs. That’s due diligence that could translate to significant cash recovery.

Review Your Contracts

Tariff changes affect pricing, delivery terms, and risk allocation. Review supply agreements and customer contracts to understand who bears tariff risk and whether force majeure provisions apply.

Conduct a Compliance Audit

Verify your products meet USMCA qualification requirements. Common pitfalls include incomplete documentation, misclassification, and insufficient transformation. CBP audits are increasing—get ahead of potential issues.

The Bottom Line

Tariff exemptions in 2026 require active management, not passive hope. The regulatory environment is fluid, enforcement is tightening, and the financial stakes are substantial. Manufacturers who proactively assess their supply chains, maintain rigorous documentation, and understand qualification requirements will navigate this complexity better than those waiting for clarity.

Because in 2026, clarity isn’t coming. But opportunity is—if you’re prepared to claim it.

About This Article

This article reflects tariff regulations and exemptions as of [Publication Date]. Trade policy continues to evolve through Supreme Court rulings, USTR negotiations, and USMCA reviews. Consult with trade compliance advisors for guidance specific to your situation.

Wiss Manufacturing Advisory Services

Wiss provides strategic tax, financial operations, and compliance guidance to mid-sized manufacturers navigating complex regulatory environments. Our manufacturing team helps you assess tariff exposure, optimize supply chain tax efficiency, and maintain audit-ready documentation. Contact Wiss to discuss how tariff changes affect your business.

Previous"SpaceX Weighs Tesla Merger Ahead of Planned $1.5 Trillion IPO"