US International Trade and Investment: Key Shifts in 2025 and What Businesses Should Know for 2026

As 2025 came to a close, shifts in US international trade and investment policy continue to shape planning, compliance, operations, and risk management for global businesses. The pace of change has been unusually rapid, with policy direction driven largely by executive action, emerging national security priorities, tariff expansion, shifting enforcement patterns, and supply chain pressures that require companies to rethink how they structure cross-border trade.

Over the last year, there have been fundamental changes with regard to tariffs, export controls, sanctions, and US outbound investment regulations. These changes are altering risk profiles and challenging long-standing assumptions. Businesses are navigating these developments against a backdrop of global conflict, geopolitical realignment, domestic policy reversals, evolving due diligence expectations, and increasingly complex international commercial relationships.

The US approach remains highly dynamic: transactional in tone, industry-specific in impact, and shaped by shifting policy levers used to advance national and economic security objectives. Looking ahead to 2026, companies should expect continued movement in tariffs, growing export control restrictions, and trade enforcement investigations, with long-term implications for supply chains, investment strategy, compliance planning, and commercial contracting.

This Insight highlights key themes and takeaways from 2025, organized around three core areas: (1) trade and investment policy trends, (2) export controls and sanctions developments, and (3) tariff expansion and litigation outlook.

TRADE AND INVESTMENT POLICY: STRUCTURAL SHIFTS WITH OPERATIONAL CONSEQUENCES

A Markedly Different Policy Environment

The US administration entered this term with more focused preparation, clearer objectives, and a more expansive policy agenda than in 2017. The result is an assertive approach to trade and investment, focused less on multilateral engagement and more on maximizing US leverage and domestic economic outcomes. Businesses are seeking to understand the implications of this shift, particularly as policy is now centered on a more mercantilist, transactional framework that elevates economic nationalism and hard-power trade tools over soft-power diplomacy.

Tariffs have been a primary driver of this new posture. Many increases exceeded expectations in both scale and scope, particularly for China, with rates in some categories rising far beyond the levels the market anticipated earlier in the year. These changes contributed to significant planning challenges and reshaped sourcing strategies, pricing models, and investment decisions for companies across sectors, although in many cases implementation of the tariff increases were postponed or exemptions were created, muting the overall effect.

Governance by Executive Action

The Trump administration relies heavily on executive orders and emergency authorities to implement trade and investment measures, ranging from tariff imposition to sanctions expansion and investment controls. This approach reflects both a broad view of presidential authority and a willingness to test the limits of that authority through litigation up to the Supreme Court, if necessary. This emphasis on executive authority and an accommodative majority in Congress has diminished the role of the legislature and increased legal and operational uncertainty for businesses planning around public policy timelines.

Effects on Multinational Corporations

Macroeconomic, policy, and geopolitical dynamics combined to create new layers of commercial complexity. Some of the most significant business impacts include the following:

• Persistent supply chain disruption: Ongoing global conflicts, dynamic imposition of tariffs, and expansion of export controls continue to affect sourcing, transportation flows, logistics planning, and long-term manufacturing footprints.
• Tariff-driven cost pressure: Tariffs remain difficult to predict, and exemption pathways have been unevenly implemented, increasing cost and slowing decision-making. Companies face pressure to realign sourcing, but many hesitate without greater clarity.
• Fragmented ESG and DEI legal environment: Conflicting state, national, and international environmental, social, and governance (ESG) and diversity, equity, and inclusion (DEI) requirements are producing overlapping (and sometimes contradictory) legal obligations, particularly in disclosures, sustainability strategy, and climate transition planning.
• Immigration-related workforce challenges: Talent mobility has become more difficult amid tightened controls on visas and student access, heightened enforcement activity, and changing compliance expectations.
• Sector-specific effects: Deregulation and policy support for oil, gas, coal, artificial intelligence, and digital assets stand in contrast to increasing pressure on renewable energy, life sciences, and automotive/retail supply chains.

New Challenges for Corporate Planning and Compliance

Legal and compliance teams are operating in an environment where policy shifts can materially alter contract rights, pricing models, investment strategies, and disclosure requirements.

Organizations face pressure to remain current on rapidly shifting executive actions, assess enforcement risk in evolving regulatory regimes, and align public disclosures with material tariff and trade risks. Many are also confronting conflicting obligations across jurisdictions and increasingly renegotiating supply contracts to account for cost volatility and tariff exposure.

These pressures mean risk management now requires deeper integration of trade policy forecasting with commercial planning and capital allocation models, and greater emphasis on scenario analysis, contract flexibility, and proactive stakeholder communication.

EXPORT CONTROLS, SANCTIONS, AND NATIONAL SECURITY REVIEWS: A MORE AGGRESSIVE ENFORCEMENT LANDSCAPE

Shift in National Security Priorities

The US administration’s 2025 priorities reflect heightened focus on trade and customs fraud, sanctions violations, drug cartel-related activity, and countering China. These priorities are shaping enforcement activity and driving new due diligence requirements, particularly in higher-risk markets and regions.

Export Controls: Broader Jurisdiction and Enhanced Risk

Export controls are increasingly used as an economic policy tool in addition to their traditional national security function. Recent developments include (1) expanded export controls targeting semiconductors, AI, and other sensitive technologies, and China-related supply chains; and (2) broadening of the Entity List to include affiliates of listed entities, which significantly increases due diligence burdens.

Although implementation of the Affiliates Rule is suspended for one year as part of a bilateral economic agreement with China, companies should use this period to prepare for expanded compliance requirements and documentation expectations once the suspension period ends.

Sanctions: Evolving Tools and New Applications

This year also saw meaningful changes to sanctions programs, including the below:

• Designation of major drug cartels as foreign terrorist organizations, increasing exposure risk for companies with operations or counterparties in Mexico and Latin America. These designations expanded investigative tools and authorities available to investigators, including material-support-to-terrorism charges and enhanced intelligence access.
• Use of FinCEN special measures as a sanctions-like tool to restrict funds transfers involving financial institutions linked to illicit opioid trafficking.
• New sanctions programs and novel uses of existing programs targeting perceived adversaries of the US administration under corruption and counter-narcotics programs. The administration reinstated sanctions on the International Criminal Court.

Additionally, 2025 saw the termination of the Syria and West Bank sanctions programs along with a heightened focus on Iran, North Korea, Venezuela, and Russia. While it has been slow to impose additional sanctions on Russia, the current administration did announce in the last quarter sanctions on two major oil and gas companies to put additional pressure on Russia to engage in peace negotiations over Ukraine.

Outbound Investment and Supply Chain Restrictions

Regulators continue to sharpen focus on outbound investment flows affecting sensitive technology sectors in China in an effort to curtail US investments facilitating the development of sensitive technologies and furthering China’s Military-Civil Fusion strategy.

Requirements now include notification obligations and, in some areas, prohibitions on US investment in Chinese companies operating in certain sectors and industries.

This trend is reinforced by Foreign Entity of Concern rules under the Inflation Reduction Act, limiting tax credit eligibility for renewable energy components with certain Chinese ties, as well as ongoing developments under the ICTS supply chain program. The National Defense Authorization Act passed in the last quarter did include provisions addressing both outbound investment in and the procurement of biopharmaceutical inputs from countries of concern.

Operational Challenges

Across the cross-border transaction landscape, businesses face sharply increased expectations around due diligence and reduced predictability in licensing and review timelines. These pressures are prompting companies to reassess compliance resources, documentation practices, and internal review protocols to identify and mitigate gaps that could elevate enforcement or transactional risk.

Compounding these challenges is a significant backlog on export classification and licensing applications before US government regulators. Much of this backlog has been exacerbated by staffing reductions, agency turnover, and disruptions caused by the recent government shutdown. Taken together, these factors delay processing times, increase uncertainty around timing and outcomes, and require companies to build greater flexibility into commercial planning, supply chain decisions, and investment strategy.

Companies are reevaluating their compliance frameworks, particularly around counterparty screening, recordkeeping, training, and reporting procedures, as the enforcement environment continues to evolve.

TARIFFS AND TRADE REMEDIES: NEW STRUCTURES, HIGHER RATES, LITIGATION RISK

Tariff Expansion Continues

Tariff activity accelerated significantly in 2025, reshaping import economics and altering long-term strategic planning for US and multinational companies. Tariffs are being deployed as a tool for both economic leverage and national security objectives, affecting a wide range of goods and industries. Key areas of focus include the following:

• Section 232 (national security) tariffs affecting imports of steel, aluminum, vehicles and parts, copper, timber, trucks, and lumber and timber, with ongoing investigations concerning semiconductors, pharmaceuticals, critical minerals, and more
• Section 301 tariffs targeting acts and practices of identified trading partners, primarily China, related to identified unfair trading practices
• Section 201 safeguards relating to solar cells and modules (expiring February 2026)
• International Emergency Economic Powers Act (IEEPA) tariffs imposed under emergency authorities, including broad reciprocal rates and trafficking-related tariffs targeting Canada, Mexico, and China
• Secondary tariffs on Venezuelan and Russian oil, currently imposed only on India
• Elimination of de minimis entry thresholds for low-value goods

These measures, layered on top of standard customs duties, have led importers to assess classification, valuation, country of origin, and eligibility under trade agreements with greater precision.

Ongoing bilateral negotiations with major trading partners are creating tariff variability based on region and product category, offering targeted relief but also increasing planning uncertainty.

Litigation and Policy Horizon for 2026

Importers closely await the Supreme Court’s decision on IEEPA-based tariff authority, argued on November 5, 2025. A ruling is expected in early 2026, although the timing may shift. The outcome could reshape tariff structures, refund potential, and future presidential authority, all of which is driving increased interest in protective refund claims and importer-specific litigation.

Meanwhile, pending trade investigations under Section 232 could trigger new tariffs on critical industries, and the first joint review under USMCA will occur in July 2026, potentially opening the door to major renegotiation.

Practical Impacts for Businesses

Importers should expect

• continued tariff cost volatility,
• increased complexity in supply chain contracting,
• valuation and classification challenges,
• expanded due diligence requirements, and
• intensified scrutiny in corporate transactions, investor reporting, and insurance underwriting.

Companies should also prepare for potential refund scenarios under certain tariff programs, particularly if litigation outcomes or negotiations alter duty obligations retroactively.

LOOKING AHEAD

The United States continues to redefine its role in global trade and investment. Increased and novel use of trade policy tools such as emergency tariffs, outbound investment controls, and sanctions tied to cartel activity, are now fundamental. Export controls are broadening in scope and purpose, sanctions programs are expanding into new areas, and the implementation of outbound investment restrictions are changing how businesses implement their commercial and operational strategies.

For companies, the result is a more complex and risky regulatory environment that demands proactive planning and resilient operating models. To address this, companies are

• evaluating and strengthening trade compliance infrastructure,
• increasing their visibility into multi-tier supply chains,
• reassessing sourcing and logistics footprints,
• integrating tariff, export control, and sanctions forecasting into budgeting,
• updating contractual protections to reduce the risk of indirect violations and specifically allocate risk and responsibility for tariffs, and
• aligning public disclosures with evolving risk profiles.

Building agility into trade strategy will be critical in 2026. The companies best positioned to thrive in this environment will be those that embed trade intelligence into cross-functional decision-making—connecting policy tracking to procurement, pricing, capital investment, manufacturing, and technology strategy.

For more information, see:

• Trump’s Second-Term Tariff Agenda: How Will New Tariffs Impact You?
• US Designation of Cartels as Terrorist Organizations Increases Risk of Doing Business in Mexico
• Outbound Regulation is Inbound: US Treasury Finalizes Rules for Certain US Technology Investments in China
• Staying Resilient Amid Global Tariff Uncertainty
• EU/US Trade: Takeaways for Companies Amid Turbulent Tariff Policy
• To File or Not to File: Contesting IEEPA Tariffs in Court
• The Office of the US Trade Representative Requests Public Comments on USMCA

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