Month: June 2026

On July 4, 2025, President Trump signed H.R. 1, the One Big Beautiful Bill Act (OBBBA), P.L. 119-21. Section 70106 of that Act amends IRC § 2010(c)(3) to increase the base amount for the unified estate and gift tax credit from $5,000,000 to $15,000,000, effective for estates of decedents dying and gifts made after December 31, 2025. The OBBBA also strikes the prior TCJA sunset provision (the former § 2010(c)(3)(C)) that would have reverted the exemption to approximately $7 million per person in 2026.

The combined effect is to raise the exemption to $15,000,000 per individual ($30,000,000 for married couples using portability) and make it permanent — with annual inflation indexing beginning in 2027 using 2025 as the base year. The TCJA had doubled the pre-2018 exemption of approximately $5.49 million and indexed it from 2017 onward; by 2025, the TCJA exemption had grown to $13,990,000. Without OBBBA, it would have dropped to approximately $7.2 million on January 1, 2026. Instead, OBBBA raised it further to $15 million.

The generation-skipping transfer (GST) tax exemption under § 2631(c) moves in parallel with the estate and gift exemption, also reaching $15 million. The annual gift tax exclusion under § 2503(b) is separately set at $19,000 per recipient for 2026 (unchanged from 2025) and is not affected by the OBBBA provision.

As of June 25, 2026, wealth management practitioners are actively publishing guidance on the planning implications of the permanent exemption — particularly for clients who made accelerated lifetime gifts in 2024–2025 in anticipation of the TCJA sunset, and for those needing to update formula clauses in existing trusts.

Key Provisions

• IRC § 2010(c)(3)(A) as amended: The base amount for computing the unified credit is $15,000,000 (previously $5,000,000 as adjusted by TCJA).
• IRC § 2010(c)(3)(B) as amended: The $15,000,000 base is indexed for inflation beginning in calendar year 2026 (base year: 2025), using the Chained CPI.
• Sunset provision struck: OBBBA § 70106(a)(3) strikes former § 2010(c)(3)(C). There is now no scheduled sunset unless Congress enacts one.
• GST exemption parallel: § 2631(c) ties the GST exemption to the basic exclusion amount; it also rises to $15,000,000 per individual (not portable between spouses, unlike the estate tax exemption).
• Anti-clawback protection preserved: Treas. Reg. § 20.2010-1(c) (finalized 2019) confirms that lifetime gifts made under an elevated exemption are not retroactively taxed at death if the exemption subsequently decreases.
• Estate tax rate unchanged: The 40% marginal rate under § 2001(c) on amounts above the exemption is unchanged.
• Annual gift exclusion unchanged: § 2503(b) exclusion remains $19,000 per donee for 2026 ($38,000 for married couples using gift-splitting under § 2513).

The U.S. Securities and Exchange Commission’s enforcement division is investigating funds widely used by private equity firms and other asset managers to retain holdings they either cannot or do not wish to sell, as the agency intensifies its review of private markets, according to three people familiar with the matter.

In recent months, SEC enforcement staff have focused on a number of “continuation vehicles,” or CVs. They are examining potential conflicts of interest in these structures, how managers value the underlying assets, and whether disclosures to investors are sufficient and consistent. Reuters could not determine which specific funds are under review or what types of assets they hold. The enforcement scrutiny into CVs has not been previously reported.

Continuation vehicles have grown rapidly in popularity. Fund manager–led secondary transactions reached $106 billion last year, up from $70 billion in 2024, according to Evercore. Rising interest rates have made it harder for private equity firms to find buyers willing to match the high multiples paid for some companies, particularly during the pandemic era of cheap money. Geopolitical instability, policy uncertainty, and disruption driven by artificial intelligence have further constrained exits from private equity portfolios.

Traditional private equity funds have a finite life cycle, typically around a decade. CVs allow managers to bring in new investors and transfer assets from older funds into a new vehicle, extending the holding period while giving existing investors the option to cash out. As a result, the vehicles offer a way to return capital to investors without forcing the sale of assets at a deep discount in weak markets, to a competitor, or at a realized loss. CVs predominantly involve equity assets, although the share of credit assets is growing.

Close Coordination at the SEC

Since late last year, enforcement division staff have sought to build what the sources described as an informal “working group” with the examinations, investment management, and other divisions, to ensure closer coordination and information sharing on the opaque private credit market. While SEC examiners have scrutinized private fund issues — including continuation vehicles — for some time, the escalation to the enforcement division and the cross-division collaboration underscore growing concerns among regulators about potential problems in private markets.

Managers say they typically obtain third-party opinions for CV deals. SEC scrutiny is not evidence of wrongdoing and does not always result in penalties or other action. At an event last month, SEC Chairman Paul Atkins said the agency is investigating allegations of fraud at private credit firms, without elaborating. Enforcement director David Woodcock also said at an event last month that the agency is “attuned to potential risks relating to liquidity, fees, valuations, and conflicts of interest” throughout the sector.

Market Oversight Intensifies

Regulators have increased oversight of private markets as they expanded over the past decade, but U.S. scrutiny has grown after problems at alternative asset manager Blue Owl and at BlackRock funds late last year sparked fears that cracks may be emerging in private credit. Blue Owl and BlackRock declined to comment.

Private credit broadly describes a range of nonbank business lending, although a large portion of the market consists of direct loans to private equity portfolio companies. Estimates of the global private credit market’s size vary, but it is generally agreed to be worth at least $1.8 trillion.

Private markets boomed thanks to a decade of near-zero interest rates, which made financing deals cheap. Many private equity firms are now struggling to profitably offload companies. PE firms currently sit on a backlog of more than 30,000 unsold portfolio companies, according to June data from Bain & Co. Rolling them into CVs allows private equity firms to bring in new investors and return some capital to their original backers.

Fund manager–led secondary transactions, of which CVs make up the majority, totaled $106 billion last year, up from $70 billion in 2024, according to Evercore. Credit accounted for 11% of those transactions last year, up from 5% in 2024.

Critics have flagged the potential for conflicts of interest because the investment manager sits on both sides of the transaction in what is usually an illiquid asset, creating incentives to skew valuations and raising questions about whether managers are presenting the same information to buyers and sellers.

Some disputes have surfaced in public. The Abu Dhabi Investment Council (ADIC) last year filed a legal complaint against a CV launched by Energy & Minerals Group (EMG), accusing the private equity firm of attempting to force a conflicted sale. A Delaware court dismissed the case, and the CV deal closed in March. A representative for EMG said the transaction had been analyzed with advisory firms and that the claims were “baseless and without legal merit.” ADIC declined to comment.

Reporting by Chris Prentice, Dawn Kopecki, and Isla Binnie in New York. Editing by Michelle Price and Matthew Lewis.

The case arises from the collapse of Kroger’s proposed $24.6 billion acquisition of Albertsons, which was blocked by antitrust regulators in late 2024. Albertsons sued Kroger in the Delaware Court of Chancery, alleging Kroger willfully breached its contractual obligation to use “best efforts” — and ultimately “any and all actions” — to eliminate antitrust impediments to the merger, including by proposing deficient divestiture packages.

During discovery, Kroger witnesses testified that they believed the company was complying with its contractual duties based on legal advice from outside counsel Arnold & Porter Kaye Scholer LLP and Weil, Gotshal & Manges LLP. Albertsons then argued that Kroger had placed the substance of that legal advice “at issue,” triggering a broader subject-matter waiver. The parties ultimately entered into a stipulated privilege waiver covering “legal advice on the construction of the divestiture packages and the adequacy of the divestiture packages from a regulatory perspective.” A dispute arose over whether Kroger’s production under that waiver was sufficient.

Albertsons filed a Motion to Compel, seeking production of all internal Arnold & Porter and Weil communications related to divestiture construction or adequacy, regardless of whether those materials were ever communicated to Kroger. On June 25, 2026, Vice Chancellor Lori W. Will denied the motion, with limited guidance clarifying the scope of the waiver. The ruling holds that internal law-firm deliberations never transmitted to the client — brainstorming, theory-workshopping, and intra-firm debate — fall outside the scope of the stipulated privilege waiver. However, firm-side documents that were used to draft or prepare advice actually communicated to the client (whether in writing or orally) must be produced.

Key Holdings

• “Legal advice” requires a communicative act. The stipulated waiver covers “legal advice” on the divestiture packages; that term requires an act of communication to the client and does not extend to every uncommunicated musing of outside counsel.
• Internal back-and-forth among lawyers is generally protected. Summarizing a meeting, workshopping theories, or internal debate among firm lawyers is not “legal advice.”
• The formulation standard. A firm-side document that was used to draft or prepare advice ultimately communicated to the client (orally or in writing) falls within the waiver and must be produced; it has moved beyond “mere brainstorming.”
• Bandera distinguished. Albertsons relied on Bandera Master Fund LP v. Boardwalk Pipeline Partners, LP (Del. Ch. Apr. 7, 2020) for the proposition that all internal law-firm workings are discoverable once advice is placed at issue. The court distinguished Bandera on the ground that it involved a formal opinion of counsel placing the law firm’s own good faith directly at issue.
• Overbroad carve-out corrected. Kroger had withheld documents reflecting “an attorney’s contemporaneous reaction to a meeting or email” not connected to any specific client proposal. Vice Chancellor Will ruled this carve-out is overbroad: if a “contemporaneous reaction” memorializes or reflects information conveyed to the client, it must be produced.

Coca-Cola’s long-running transfer pricing dispute with the IRS reached oral argument before the U.S. Court of Appeals for the Eleventh Circuit on June 25, 2026, in Miami. The underlying dispute concerns tax years 2007–2009 and centers on how Coca-Cola allocated profits between its U.S. parent and foreign manufacturing affiliates — the “supply points” — in countries such as Brazil, Chile, Costa Rica, Egypt, Ireland, Mexico, and Swaziland.

The supply points paid royalties to the U.S. parent for the use of Coca-Cola’s intangible property (trademarks, formulas, and brand names). The IRS contends those royalties were too low and applied the Comparable Profits Method (CPM) to reallocate more than $9 billion of income to the U.S. parent. The Tax Court ruled for the IRS in 2020 (155 T.C. 145) and again in 2023 (T.C. Memo. 2023-135) on remaining Brazilian blocked-income issues. A final August 2024 Tax Court decision imposed approximately $2.7 billion in additional federal income tax for 2007–2009; with interest, Coca-Cola paid approximately $6 billion in late 2024 to stop further interest accrual. On appeal, the total amount at stake — including all post-2009 tax years through 2025 — reaches approximately $20 billion.

At oral argument, attorney Gregory Garre argued the IRS engaged in a “bait-and-switch”: Coca-Cola had relied on a 1996 closing agreement and subsequent IRS conduct as endorsing its prior transfer pricing methodology (the “10-50-50” split), but the IRS switched methodologies without notice. Judge Lagoa questioned the retroactive nature of the IRS’s conduct; Judge Abudu asked why the IRS challenged Coca-Cola’s arrangements in some countries but not others. The DOJ countered that retroactive enforcement is the norm in tax disputes and that Coca-Cola had opportunities to renegotiate. A ruling is expected within several months.

Key Arguments and Issues

• “Bait-and-switch” / reliance defense. Coca-Cola argues it relied on a 1996 IRS–Coke closing agreement and subsequent IRS conduct that endorsed the 10-50-50 profit-split methodology for royalties from supply points, and that the IRS’s adoption of CPM for 2007–2009 was arbitrary and without fair notice.
• Blocked-income regulations. Brazil limits the royalties a local subsidiary can pay to a U.S. parent. Under IRS Treas. Reg. § 1.482-1(h) (blocked-income regulations), the U.S. parent’s income can include the full amount that the affiliate would owe absent the limitation. Coca-Cola challenges these regulations as invalid after the Supreme Court’s 2024 Loper Bright ruling eliminated Chevron deference; the Eighth Circuit sided with 3M against the blocked-income rules in 3M Co. v. Commissioner (8th Cir. 2023), and Coca-Cola argues that ruling applies here.
• Circuit split potential. If the Eleventh Circuit upholds the IRS’s blocked-income regulations and the Eighth Circuit’s 3M ruling stands, a direct circuit split would emerge, increasing the likelihood of Supreme Court review.
• Retroactivity and enforcement norms. The IRS argues that retroactive tax enforcement is standard and that Coca-Cola had ample opportunity to seek advance pricing agreements or renegotiate. The panel pressed both sides on the limits of IRS authority to shift methodology after years of acquiescence.
• Downstream stakes. The 2007–2009 judgment controls the methodology for all post-2009 tax years. A Coca-Cola loss on appeal could add approximately $14 billion in additional taxes and interest for 2010–2025, plus a sustained increase in its effective tax rate.

At an open meeting chaired by SEC Chairman Paul Atkins, the Commission voted to propose rescinding Rule 611 (the “trade-through prohibition” requiring trades be executed at the national best bid or offer) and Rule 610(e) (restrictions on locking and crossing quotations) of Regulation NMS, in a significant deregulatory shift for U.S. equity market structure.

Atkins called Rule 611 a “grave misstep” that “prioritized the Commission’s assumptions about markets above what could emerge from competition,” and said the proposal is “intended to simplify market structure and reduce costs.”

The public comment period will remain open for 60 days after publication in the Federal Register.

Read: SEC.gov | SEC Proposes Rescission of Regulation NMS Rules 611 and 610(e)

In a 6–3 decision authored by Justice Barrett, the Supreme Court held that Section 47(b) of the Investment Company Act does not create an implied private right of action for rescission of contracts that allegedly violate the Act, reversing the Second Circuit.

The Court reasoned that Section 47(b) is directed at courts’ remedial authority, not at conferring individual rights, and that the ICA’s comprehensive SEC enforcement scheme and two express private causes of action foreclose additional implied remedies.

The ruling directly limits the ability of activist investors — such as Saba Capital, which had used the provision to challenge closed-end fund anti-takeover provisions — to weaponize the ICA in securities litigation.

Read: 24-345_i42k.pdf

(Reuters) The U.S. Supreme Court on Thursday rejected a challenge to the Securities and Exchange Commission’s broad authority to recover illegal profits using a financial remedy called disgorgement, buttressing one of ‌the Wall Street watchdog agency’s key powers.

The justices, in a 9-0 ruling authored by conservative Justice Neil Gorsuch, upheld a lower court’s decision that had endorsed a wide use of the SEC’s disgorgement authority. President Donald Trump’s administration defended the SEC in the case.

The challenge to the SEC’s disgorgement power was brought by a defendant named Ongkaruck Sripetch. At the agency’s request, a court in California ordered Sripetch to repay more than $3 million in ill-gotten gains and interest related to a financial fraud case.

The SEC’s general power to pursue disgorgement was not in dispute in the case. Courts have long ⁠recognized this authority and Congress enshrined it in federal law. At issue was whether the agency must show that victims suffered economic harm before it can seek the surrender of illegal profits.

“The Supreme Court’s unanimous decision to uphold the agency’s right to seek disgorgement is critical to maintaining a consistent approach across our enforcement program. This remedy will remain an important part of the commission’s renewed emphasis on combating fraud, and we are gratified the Supreme Court agreed with the agency’s position in this case,” said Russell McGranahan, the SEC’s general counsel.

Justice Department lawyers during arguments before the justices in April said the SEC was not required to show that fraud inflicted financial, or “pecuniary,” harm before pursuing repayment through the courts.

Gorsuch, writing for the court, concluded that “a showing of pecuniary loss is not required before an investor may qualify as a victim of an offender’s wrongdoing entitled to compensation.”

Under Trump, the SEC used the remedy to obtain around $1.4 billion in ‌fiscal 2025, ⁠according to an agency tally that excluded certain sums. The prior year under Democratic President Joe Biden, the SEC obtained $6.1 billion through disgorgement, almost three-fourths of its total financial penalties.

The SEC in 2020 sought disgorgement for illicit proceeds that it said Sripetch reaped through fraudulent means, including a so-called pump-and-dump scheme that involved artificially inflating the price of penny stocks before selling off his shares at a profit.

Sripetch admitted violating securities law, and in a related criminal case was sentenced to 21 months in prison. Sripetch challenged the lower ⁠court’s disgorgement order on the grounds that the SEC failed to prove his actions caused stock prices to drop or otherwise financially harmed investors.

A California-based federal judge sided with the SEC’s broader interpretation of its disgorgement power in a ruling that was upheld last year by the San Francisco-based 9th U.S. Circuit Court of Appeals.

Beyond disgorgement, the SEC can ⁠also pursue fines, sanctions and other punishment.

The Supreme Court in a 2024 ruling also involving the SEC rejected the agency’s in-house enforcement of laws protecting investors against securities fraud. The court ruled that agency proceedings seeking penalties for fraud that are handled by the SEC itself instead of in federal court violate the U.S. ⁠Constitution’s Seventh Amendment right to a jury trial.

The SEC’s $1.4 billion disgorgement figure for fiscal 2025 excludes certain repayments secured by other federal agencies and an $8 billion payment made in January 2025, during the second week of Trump’s return to the White House, stemming from long-running SEC litigation concerning a Ponzi scheme.

(Metropolitan News-Enterprise) The Ninth U.S. Circuit Court of Appeals weighed in yesterday on the use of artificial intelligence tools in legal filings, suspending two Orange County immigration attorneys from practice in the court for six months, as well as imposing monetary and other penalties, relating to briefs submitted with fabricated citations and statements characterizing the errors as “typographical” mistakes that involved no use of the hallucination-prone technology.

Saying that “we issue this disciplinary order, and explain our reasoning at some length, as a warning to the members of this Court’s bar,” the court declared:

“[B]e aware of the risks of overreliance on generative AI, read everything cited in a court filing—whether drafted by generative AI or not—and disclose quickly and transparently generative AI hallucinations that are inadvertently included in court filings.”

Circuit Judge Danielle J. Forrest and Senior Circuit Judges Richard A. Paez and Carlos T. Bea signed yesterday’s order imposing the sanctions on Mike Singh Sethi of the City of Orange-based Sethi Law Group and William Rounds, formerly of Sethi Law Group and now, according to State Bar records, with U.S. Legal Group APC.

They declared that each attorney is “personally sanctioned in the amount of $2,500,” “hereby suspended from practice before this Court for a period of six months,” and ordered them to “provide a copy of this Order to their clients, opposing counsel, and the presiding judge in every pending state or federal case in which they are counsel of record.”

The order also mandates that, for a period of two years, “all attorneys at the Firm” must “include in all future filings” a sworn statement “addressing whether generative AI was used, disclosing the name of the tool used, and certifying that the attorney signing the brief or other filing has personally reviewed the filing and that all citations and quotations therein refer to existing authority.”

Immigration Matter

Sethi and Rounds served as counsel for the petitioners in the Lnu v. Blanche matter, in which the petitioners sought review of a Board of Immigration Appeals order. Sethi signed an opening brief that contained citations to non-existent cases and purported quotations from real opinions in which the language did not appear.

He later moved to correct the record, representing in the written request that the reliance on two fake cases was the result of “typographical errors” and seeking to replace the citations with two opinions with similar names, different reporter numbers, and, in one instance, a different year.

The new cases do not support the propositions for which they were cited, and the motion failed to address the misattributed quotations. Only Rounds appeared for oral argument, and he attributed the mistakes to possible “copy and paste error[s] or something like that.”

When pressed on whether generative-AI tools might have been used, he categorically denied that the technology was employed in creating the briefs before conceding that it was possible, clarifying that the filing was written by a recent law-school graduate who was not yet licensed to practice. The panel ordered both attorneys to show cause why they should not be sanctioned, suspended, or disbarred from practice before the court.

In a joint response, the lawyers explained that the firm employs a team of recent law school graduates to write briefs and that the attorneys do not normally “vet citations.” They indicated that they did not suspect AI was used because the office has a policy prohibiting the use of the technology in drafting.

Sethi and Rounds proceeded to concede that the errors were likely the product of an unauthorized use of AI by the brief writers and apologized to the court, saying that they have hired a licensed attorney to check all briefs prepared by the unlicensed authors in the future. Sethi expressed an intention to remedy similar errors made in other pending matters.

Multiple Rules Violated

Saying that both attorneys “violated multiple rules of appellate procedure and professional conduct,” the panel declared:

“Sethi did so when he signed and filed briefs in this Court with nonexistent cases, misattributed quotations, and gross misrepresentations of real cases….Sethi and Rounds also violated their duty of candor when they represented the errors as innocent typographical mistakes and when they affirmatively denied that generative AI might have been the source of the errors.”

Clarifying that “[w]e do not sanction Sethi and Rounds for the simple fact that they or their subordinates used generative AI, the judges noted that the use of such tools is not “inherently unethical or irresponsible.” However, pointing to a 2024 study which showed that certain AI programs utilized by Westlaw and Lexis “hallucinated 17% and 33% of answers,” they wrote:

“The most common error modes of the latest generation tools include misunderstanding holdings, failing to distinguish between legal actors (e.g., presenting a rejected party argument as the holding of the court), and failing to respect the hierarchy of authorities….In other words, the sort of errors that we might expect a first-semester law student to make, but certainly not licensed attorneys appearing before this court.”

Awareness of Tendency

Highlighting that “[l]awyers using generative AI must thus be aware of the tendency of generative AI to make these mistakes and guard against them,” they opined:

“It is ultimately irrelevant to the disciplinary analysis (except for the duty of candor)…whether Sethi, Rounds, or anyone at the Firm actually used generative AI….[T]he rules are not violated at the point of research and drafting, but at the point of signing and filing. If an attorney files a brief with cases or quotations that do not exist, or completely misrepresents what a real authority stands for, it generally does not matter if he pulled the hallucination or misrepresentation from the output of an artificial intelligence tool or from his own natural intelligence.”

Rejecting the assertion that the errors were irrelevant because “other cases…stand for the propositions asserted,” the jurists remarked that “it was [Sethi’s] responsibility to cite them” and opined:

“It is no excuse that Sethi entrusted substantive cite checking to subordinates, and it is no excuse that Sethi purportedly did not know his subordinates had used generative AI….Sethi’s signature was an attestation that he personally reviewed the contents of the brief, including the cited authorities, and that they were accurate.”

They added:

“The misconduct in this case did not end with the initial filing of the…briefs. At every subsequent step…Sethi and Rounds have knowingly or recklessly made false statements to this Court.”

No Plausible Explanation

Commenting that “we have not identified any plausible explanation for how innocent…copy-paste errors could turn” the real cases into the cited fabricated ones, the court attributed knowledge that the errors were something more than typographical to the lawyers. Paez, Bea, and Forrest wrote:

“An attorney who erroneously submits a hallucination in a brief must notify the Court and opposing counsel immediately, describe the nature of the error (a fabrication, a gross misrepresentation, etc.), and disclose how the error came about—here, misused generative AI.”

Saying that the lawyers failed to live up to their obligation to do so, and calling out Sethi for “engag[ing] in more subtle subterfuge” in another matter in which he filed a “Notice of Errata” that did not disclose that certain citations “were hallucinations,” the court declared:

“[F]ailing to disclose the…source of the errors is conduct unbecoming of a member of this Court’s bar.”

Continuing, they said:

“If, in the Motion to Correct, Sethi and Rounds had disclosed that AI was used in the opening brief against firm policy and apologized for failing to check the brief, lesser sanctions may have been warranted. But that is not what they did. The gravity of discipline we impose, including the temporary suspension of practice, is owed to this repeated failure of candor.”

The case is Lnu v. Blanche, 24-4790.

The United States Trade Representative determined under Section 301 of the Trade Act of 1974 that the acts, policies, and practices of 60 economies related to the failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor is unreasonable and burdens or restricts U.S. commerce, and are thus actionable under Section 301(b) of the Trade Act. The Office of the United States Trade Representative (USTR) has prepared a comprehensive report, Acts, Policies, and Practices of Various Economies Related to the Failure to Impose and Effectively Enforce a Prohibition on the Importation of Goods Produced with Forced Labor, that supports the findings in each investigation.

“The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field,” said Ambassador Jamieson Greer. “We will no longer tolerate this disparity. Some trading partners have taken initial steps to prevent the importation of forced labor goods, including through USMCA and commitments in Agreements on Reciprocal Trade. However, each of our trading partners must do more to ensure that trade does not perversely encourage and entrench forced labor globally.”

As a result of these determinations in the investigations, the U.S. Trade Representative has proposed responsive action for public comment.

Specifically, the U.S. Trade Representative proposes additional duties on all products of the investigated economies, except as provided in Annex A to the Federal Register notice. For economies that impose a forced labor import prohibition, that have committed to impose and enforce such a prohibition through an Agreement on Reciprocal Trade, or economies that have imposed a partial regime with the effect of preventing the importation of certain forced labor goods, the U.S. Trade Representative proposes 10% as the rate of additional duties. For all other economies, the U.S. Trade Representative proposes 12.5% as the rate of additional duty. The U.S. Trade Representative also proposes a textile mechanism that would allow for a certain volume of apparel and textile imports from certain economies to enter the United States at a reduced Section 301 tariff rate.

To be assured of consideration, interested persons should submit requests to appear at the hearings, along with a summary of testimony by June 22, 2026.

Written comments are due by July 6, 2026.

In an 8-1 decision written by Chief Justice Roberts, the Supreme Court reversed the Fifth Circuit and held that FCC forfeiture orders do not violate the Seventh Amendment when issued without a jury, because they do not create a binding obligation to pay — any collection requires a subsequent de novo jury trial before an Article III court. The case involved over $100 million in FCC fines imposed on AT&T and Verizon for sharing customer location data without adequate vetting of third parties. The Court distinguished the FCC’s scheme from the SEC’s enforcement structure struck down in Jarkesy (2024), since the FCC cannot execute on a forfeiture order unilaterally: only the DOJ can collect through a separate jury trial. The ruling limits the reach of Jarkesy and confirms the constitutionality of similar two-step administrative enforcement schemes.