Federal Executive Branch
Here's a look at documents from the U.S. Executive Branch
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USITC Institutes Section 337 Investigation of Certain Smart Devices
WASHINGTON, June 6 -- The U.S. International Trade Commission issued the following news release:
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USITC Institutes Section 337 Investigation of Certain Smart Devices
The U.S. International Trade Commission (Commission or USITC) voted to institute an investigation of certain smart devices. The products at issue in the investigation are described in the Commission's notice of investigation.
The investigation is based on a complaint filed on behalf of Cerence Operating Company of Burlington, Massachusetts, on May 6, 2026. Supplements to the complaint were filed on May 12, 2026, and May 13,
... Show Full Article
WASHINGTON, June 6 -- The U.S. International Trade Commission issued the following news release:
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USITC Institutes Section 337 Investigation of Certain Smart Devices
The U.S. International Trade Commission (Commission or USITC) voted to institute an investigation of certain smart devices. The products at issue in the investigation are described in the Commission's notice of investigation.
The investigation is based on a complaint filed on behalf of Cerence Operating Company of Burlington, Massachusetts, on May 6, 2026. Supplements to the complaint were filed on May 12, 2026, and May 13,2026. The complaint, as supplemented, alleges violations of section 337 of the Tariff Act of 1930 in the importation into the United States and sale of certain smart devices that infringe certain claims of the patents asserted by the complainant. The complainant requests that the USITC issue a limited exclusion order and cease and desist orders.
The USITC has identified the following respondents in this investigation:
* Amazon.com, Inc., Seattle, Washington
* Amazon.com Services, LLC, Seattle, Washington
By instituting this investigation (337-TA-1504), the USITC has not yet made any decision on the merits of the case. The USITC's Chief Administrative Law Judge will assign the case to one of the USITC's administrative law judges (ALJ), who will schedule and hold an evidentiary hearing. The ALJ will make an initial determination as to whether there is a violation of section 337; that initial determination is subject to review by the Commission.
The USITC will make a final determination in the investigation at the earliest practicable time. Within 45 days after institution of the investigation, the USITC will set a target date for completing the investigation. USITC remedial orders in section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.
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Original text here: https://www.usitc.gov/press_room/news_release/2026/er0605_68703.htm
Treasury, IRS Announce Intent to Issue Proposed Regulations for Excise Tax on Excess Tax-Exempt Organization Executive Compensation Under the One, Big, Beautiful Bill
WASHINGTON, June 6 -- The U.S. Department of the Treasury Internal Revenue Service issued the following news on June 5, 2026:
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Treasury, IRS announce intent to issue proposed regulations for excise tax on excess tax-exempt organization executive compensation under the One, Big, Beautiful Bill
The Department of the Treasury and the Internal Revenue Service today issued Notice 2026-36 PDF announcing intent to issue proposed regulations addressing the tax on excessive compensation and excess parachute payments to employees of tax-exempt organizations under the One, Big, Beautiful Bill.
"The
... Show Full Article
WASHINGTON, June 6 -- The U.S. Department of the Treasury Internal Revenue Service issued the following news on June 5, 2026:
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Treasury, IRS announce intent to issue proposed regulations for excise tax on excess tax-exempt organization executive compensation under the One, Big, Beautiful Bill
The Department of the Treasury and the Internal Revenue Service today issued Notice 2026-36 PDF announcing intent to issue proposed regulations addressing the tax on excessive compensation and excess parachute payments to employees of tax-exempt organizations under the One, Big, Beautiful Bill.
"Thenew law strengthens the accountability of tax-exempt organizations by expanding tax compliance requirements for certain organizations paying excessive compensation and excess parachute payments to their executives," said IRS Chief Executive Officer Frank J. Bisignano. "It broadens the scope of tax from a limited group of executives to potentially any highly compensated employee."
Expanded application of tax on excess compensation under OBBB
The OBBB expanded the application of excise tax on excess compensation by broadening the definition of covered employee of an applicable tax-exempt organization (ATEO). Previously, this tax applied to the five highest-compensated employees for the tax year. Now the tax may apply to any employee with compensation exceeding $1 million in a tax year or an excess parachute payment.
Notice 2026-36 clarifies that the amended definition of covered employee, which will be addressed in the forthcoming proposed regulations, includes only:
* Any individual who was an employee of an ATEO in any tax year beginning after Dec. 31, 2016, and on or before Dec. 31, 2025, if the individual was a covered employee for the tax year under prior law, and
* Any individual who is an employee of an ATEO in any tax year beginning after Dec. 31, 2025 (unless a covered employee exception applies).
The notice also sets out important exceptions for individuals who provide volunteer services to tax-exempt organizations that could otherwise be impacted by the OBBB changes. Specifically, it allows ATEOs and their related organizations to rely on the limited hours and nonexempt funds exceptions to the post-OBBB definition of covered employee until further guidance is issued.
Treasury and the IRS anticipate the forthcoming proposed regulations will include covered employee exceptions for limited hours and nonexempt funds. The proposed regulations are not expected to apply to tax years beginning before the issuance of final regulations.
More information
Treasury and the IRS request comments on all aspects of this notice and any other issues that should be addressed in the forthcoming proposed regulations by Aug. 4, 2026. Comments are particularly requested on the issues raised by today's notice. Complete instructions on submitting comments are included in the notice.
For more information, see One, Big, Beautiful Bill Provisions on IRS.gov.
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Original text here: https://www.irs.gov/newsroom/treasury-irs-announce-intent-to-issue-proposed-regulations-for-excise-tax-on-excess-tax-exempt-organization-executive-compensation-under-the-one-big-beautiful-bill
Reclamation Initiates Sites Excess Capacity Contract Public Negotiation Sessions
WASHINGTON, June 6 -- The U.S. Department of the Interior Bureau of Reclamation issued the following news release:
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Reclamation initiates Sites Excess Capacity Contract public negotiation sessions
MAXWELL, Calif. - The Bureau of Reclamation announces the beginning of public negotiation sessions with the Sites Project Authority for an Excess Capacity Contract for the proposed Sites Reservoir Project, a new 1.5 million acre-foot offstream reservoir approximately 10 miles west of Maxwell, CA for water storage, conveyance, and service. The Excess Capacity Contract supports the reservoir project
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WASHINGTON, June 6 -- The U.S. Department of the Interior Bureau of Reclamation issued the following news release:
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Reclamation initiates Sites Excess Capacity Contract public negotiation sessions
MAXWELL, Calif. - The Bureau of Reclamation announces the beginning of public negotiation sessions with the Sites Project Authority for an Excess Capacity Contract for the proposed Sites Reservoir Project, a new 1.5 million acre-foot offstream reservoir approximately 10 miles west of Maxwell, CA for water storage, conveyance, and service. The Excess Capacity Contract supports the reservoir projectby outlining the terms and conditions to which each party must adhere regarding the conveyance of water through federal facilities.
The following negotiation session will be held at the Sites Authority's Office, 122 Old Hwy 99W, Maxwell, CA 95955:
June 23, 2026 - 10 a.m. to 4 p.m.
To register and for more information, please contact Jake Brannum, Repayment Specialist, California-Great Basin Regional Office, at jbrannum@usbr.gov.
The public is welcome to attend and will have the opportunity to provide comments regarding this contracting action. Participation instructions and the proposed contract will be available at each session.
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The Bureau of Reclamation is a federal agency under the U.S. Department of the Interior and is the nation's largest wholesale water supplier and second largest producer of hydroelectric power. Our facilities also provide substantial flood control, recreation opportunities, and environmental benefits.
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Original text here: https://www.usbr.gov/newsroom/news-release/5349
Nelson & Isa Lacteos Recalls Requeson Cheese Due to Possible Health Risk
WASHINGTON, June 6 -- The U.S. Department of Health and Human Services Food and Drug Administration issued the following recall notice:
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Nelson & Isa Lacteos LLC Recalls Requeson Cheese Due to Possible Health Risk
Summary
Company Announcement Date: June 05, 2026
FDA Publish Date: June 05, 2026
Product Type: Food & Beverages
Foodborne Illness
Reason for Announcement: Product contaminated with Listeria monocytogenes
Company Name: Nelson & Isa Lacteos LLC
Brand Name: No Brand
Product Description: Requeson 1lb. clamshell packages
Company Announcement
Nelson & Isa Lacteos LLC. of Bayshore,
... Show Full Article
WASHINGTON, June 6 -- The U.S. Department of Health and Human Services Food and Drug Administration issued the following recall notice:
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Nelson & Isa Lacteos LLC Recalls Requeson Cheese Due to Possible Health Risk
Summary
Company Announcement Date: June 05, 2026
FDA Publish Date: June 05, 2026
Product Type: Food & Beverages
Foodborne Illness
Reason for Announcement: Product contaminated with Listeria monocytogenes
Company Name: Nelson & Isa Lacteos LLC
Brand Name: No Brand
Product Description: Requeson 1lb. clamshell packages
Company Announcement
Nelson & Isa Lacteos LLC. of Bayshore,NY, is recalling 1lb packages of Requeson Cheese because they may be contaminated with Listeria monocytogenes, an organism which can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems. Although healthy persons may suffer only short-term symptoms such as high fever, severe headache, stiffness, nausea, abdominal pain and diarrhea, Listeria monocytogenes infection can cause miscarriages and stillbirths among pregnant women.
The recalled Requeson Cheese was sold in 1 lb plastic clam shells in retail locations in New York from May 15 to May 28, 2026. Product was likely repacked at the retail store locations, and labeling or coding may vary based on location of purchase.
The contamination was discovered after sampling by New York State Department of Agriculture and Market Food Inspectors and subsequent analysis by Food Laboratory personnel revealed the presence of Listeria monocytogenes in an 18lb plastic container of "Clover Hill Dairy Requeson Cheese" with a sell-by date of 6/14/26 and batch #2AA051526 that was repacked into the recalled 1lb packages of Requeson Cheese.
To date, no illnesses or complaints have been reported or received regarding this matter
Consumers who have purchased 1lb packages of Requeson Cheese are urged not to consume the product and to return the product to the place of purchase for a full refund. Consumers with questions may contact the company at 631-334-1055 between the hours of 9:am to 5:00 pm Eastern time.
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Original text here: https://www.fda.gov/safety/recalls-market-withdrawals-safety-alerts/nelson-isa-lacteos-llc-recalls-requeson-cheese-due-possible-health-risk
Fed: Mexico in U.S. Supply Chains - Lessons From 2018-19 Tariffs
WASHINGTON, June 6 -- The Federal Reserve issued the following Fed Notes article:
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Mexico in U.S. Supply Chains: Lessons from 2018-19 Tariffs
Maria Aristizabal-Ramirez, Chris A. Avalos, Emma Rosenbaum, and Eva Van Leemput/1
In the wake of the 2018-19 U.S.-China tariff hikes, there has been a significant shift in U.S. supply chains, with Mexico emerging as the largest supplier of U.S. imports, surpassing China. This shift has been attributed in part to Mexico gaining a cost advantage over China following the U.S tariffs on China. However, there is ongoing debate about the extent to which
... Show Full Article
WASHINGTON, June 6 -- The Federal Reserve issued the following Fed Notes article:
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Mexico in U.S. Supply Chains: Lessons from 2018-19 Tariffs
Maria Aristizabal-Ramirez, Chris A. Avalos, Emma Rosenbaum, and Eva Van Leemput/1
In the wake of the 2018-19 U.S.-China tariff hikes, there has been a significant shift in U.S. supply chains, with Mexico emerging as the largest supplier of U.S. imports, surpassing China. This shift has been attributed in part to Mexico gaining a cost advantage over China following the U.S tariffs on China. However, there is ongoing debate about the extent to whichMexico's rising exports to the U.S. reflects genuine gains in competitiveness by Mexican firms versus an alternative explanation: that China is using Mexico as a "backdoor" by relocating production there or transshipping goods to circumvent tariffs.
Distinguishing between these different forms of trade diversion is important. If a large share of diversion to Mexico reflects the relocation of Chinese production, U.S. efforts to decouple from China--for national security, supply chain resilience, and other reasons--may be undermined. Moreover, if many goods are transshipped, the U.S. could lose significant tariff revenue.
Our key contribution is developing a unified decomposition framework that quantifies the relative magnitudes of Mexico's export gains across different sources: trend growth, trade diversion unrelated to China, China's backdoor strategies (separating transshipment from production), and other factors. Critically, we are the first to systematically quantify China's total role--both transshipment and production relocation--relative to other sources of trade diversion, providing bounds essential for evaluating decoupling policy effectiveness. We contribute to the literature on supply chain restructuring in response to trade policy, specifically examining the reconfiguration of trade relationships among the U.S., Mexico, and China following the 2018-19 Trade War (Alfaro and Chor, 2025; Arizala et al., 2025; Bonadio et al., 2025; Chen et al., 2025; Freund, 2025; Utar et al.,2025; Grossman et al., 2024; Dang et al., 2023; Freund et al., 2024).
We estimate that a substantial share of Mexico's gains in the U.S. market--approximately 53%--was driven by U.S. tariffs on China, highlighting the important role of tariff policy in redirecting trade flows. Of this increase, about one-quarter (14 percentage points) appears to reflect Chinese "backdoor" strategies, suggesting that a notable portion, but not most, of Mexico's export growth to the U.S. may be linked to Chinese production.
Overall, these findings indicate that higher U.S. tariffs not only induce trade diversion but also encourage firms to relocate production to lower-tariff countries. With broader U.S. tariffs in place since 2025, both genuine supply chain realignment and backdoor activity are likely to intensify.
1. U.S.-China Tariffs Shifted Trade to Mexico and Boosted China-Mexico Ties
In the aftermath of the 2018-19 U.S.-China tariff hikes, Mexico has emerged as the largest supplier of U.S. imports, surpassing China and now accounting for 16% of total imports (Figure 1a). This shift has been attributed in part to Mexico gaining a cost advantage over China following the U.S tariffs on China./2 Figure 1b presents the evolution of Mexican exports of goods for which U.S. imposed tariffs on China in 2018-19, labelled "China tariffed," with those that were not tariffed, the dashed black line. Mexican tariff-exposed exports outperformed, suggesting sizable trade diversion to Mexico.
Figure 1. U.S. - Mexican Trade
However, concurrent with Mexico's export surge to the U.S., Chinese engagement with Mexico intensified. Figure 2a shows that Chinese greenfield foreign direct investment (FDI) into Mexico surged across many manufacturing sectors, while Figure 2b shows a parallel surge in Mexican imports from China in these same sectors. These patterns suggest Chinese firms may be using Mexico as a platform to access U.S. markets--either through transshipment or outright production relocation./3
Figure 2. China and Mexico
2. Quantitative Analysis
2.1 How Much Did Mexico's Export Gains to the U.S. Reflect Trade Diversion?
Our analysis first isolates the share of Mexico's export growth to the U.S. following the U.S.-China tariff hikes that is attributable to trade diversion. To do so, we use variation in Mexico's exports of goods for which U.S. imposed tariffs on China and distinguish these effects from underlying trends and other factors. We proceed in two steps.
Step 1: Measuring Total Change and Trend
We first compute the total change in Mexican exports for each good between the pre-tariff period (2014-17) and the post-tariff period (2021-24). We then estimate what exports would have been absent the tariff shock by projecting pre-tariff trends forward using an HP filter./4 The trend component captures the expected growth in Mexican exports based solely on the continuation of pre-policy patterns.
Step 2: Estimating Trade Diversion
To identify tariff-driven trade diversion, we compare how Mexican exports of goods for which the U.S. imposed tariffs on China evolved relative to non-tariffed goods./5 The key insight is that products where China had a larger initial presence in the U.S. market were hit harder by tariffs, creating stronger incentives for trade diversion to Mexico. We control for product-specific pre-tariff growth trends to isolate the policy effect from pre-existing demand or productivity changes
Figure 3 presents the decomposition. We find that trade diversion accounts for 53% of Mexico's export gains to the U.S. during this period, while trend growth accounts for 35%, and other factors, such as the post-pandemic demand for autos, account for the remaining 12%. Hence, our results show that Mexico's export gains to the U.S. were notably driven by higher U.S. tariffs on China.
Figure 3. Decomposition of Increase in Mexican Exports to the U.S.
2.2 To What Extent Did China Use Mexico as a "Backdoor" to Access the U.S.?
Next, we capture the portion of trade diversion that is attributable to China's use of Mexico as a backdoor.
Step 3: Identifying China's Backdoor Use
We use a similar regression framework, now focusing on Mexican imports from China of U.S. tariffed versus non-tariffed goods. For tariffed goods, we interpret increases in Mexican imports from China as reflecting efforts to access the U.S. market--either through transshipment or production relocation. This interpretation is supported by the fact that the increases are concentrated in products where China lost U.S. market access, suggesting they primarily serve U.S. demand rather than Mexican domestic consumption.
Step 4: Distinguishing Transshipment from Production Relocation
Among goods identified as part of China's backdoor usage, we classify transshipped products as those tariffed goods imported from China and then re-exported to the U.S./6 Products that do not fall under this definition are classified as involving meaningful production in Mexico.
Figure 4 further decomposes our earlier estimate of trade diversion. We find that direct transshipment from China is negligible, accounting for less than 1 percentage point. Hence, contrary to concerns about China simply transshipping goods through Mexico, the trade data do not appear to support large-scale transshipment./7 We further corroborate this result using additional input-output data for Mexican exports to the U.S. Figure 5 shows that Mexican value-added growth in exports to the U.S. exceeded Chinese input growth during this period, indicating that Mexican exports incorporated substantial domestic content alongside Chinese inputs. This pattern would not emerge if Mexico were merely transshipping Chinese goods with minimal processing. All told, the evidence does not support large-scale transshipment.
Figure 4. Decomposition of Increase in Mexican Exports to the U.S.
Figure 5. Contributions to the Growth in Mexico's Manufacturing Exports to the U.S.
Instead, the trade data are more consistent with some form of Chinese production or processing in Mexico, accounting for 14 percent of Mexico's total export gains to the U.S. This could range from substantial manufacturing operations to more limited processing activities, but in either case reflects a clear Chinese footprint beyond pure transshipment. The remaining 38 percent reflects diversion from sources other than China, including Mexican firms as well as expansion of U.S. and other foreign multinationals in Mexico, consistent with patterns documented in Utar et al. (2025, 2026).
Note that we identify China's use of Mexico as a "backdoor" through international trade data, as we do not have access to more direct information on firm ownership. As a result, our estimates are subject to important caveats and should be interpreted as informative bounds rather than precise measures.
Our framework may overstate China's backdoor role if non-Chinese firms increased their reliance on Chinese inputs to serve the U.S. market, or if some Chinese imports to Mexico are destined for domestic consumption rather than re-export (though supplementary evidence shows Chinese FDI is positively correlated with Mexican exports to the U.S.). Conversely, we may understate China's role by focusing only on tariffed goods--if Chinese firms rely on non-tariffed inputs in Mexican production, this activity would not be captured.
3. Implications for Today and USMCA Renegotiations
The 2018-19 episode provides a useful benchmark for understanding the current environment. With a new wave of tariffs now underway and the USMCA review approaching in July 2026, a key question is whether these patterns will repeat or intensify.
Looking forward, two key differences suggest trade diversion could exceed 2018-19 levels. First, tariffs are even higher this time while remaining relatively low on Mexico, amplifying the cost advantage that drove trade diversion to Mexico previously. Second, tariffs are now broader, covering more countries and products. This increases incentives not only for China but for firms from multiple countries to use Mexico as a backdoor. Moreover, if firms now view tariffs as more permanent, supply chain adjustments may occur faster or may have already taken place in anticipation.
These dynamics are already evident in the electronics sector. FDI from Asian countries excluding China has surged in recent years, while existing contract manufacturers like Taiwan's Foxconn have expanded their Mexican operations (Figure 6.A). This helps explain Mexico's surprisingly rapid gains from the U.S. AI boom--Mexico has emerged as a top supplier of AI-related goods to the U.S. market (Figure 6.B).
Figure 6. AI Growth
The upcoming USMCA review will shape whether policy emphasizes deeper integration or tighter restrictions on non-North American content. Given substantial trade diversion and highly integrated supply chains--Mexico accounts for 16% of U.S. imports--this policy direction carries important implications. Stricter rules of origin could disrupt supply chains if they fail to distinguish transshipment from genuine relocation, while maintaining current rules may allow backdoor strategies to expand.
Conclusion
The 2018-19 U.S.-China tariffs reshaped U.S. trade not only with China but also with third countries--most notably Mexico, which benefited from substantial trade diversion. At the same time, U.S. tariff on China incentivized Chinese firms to relocate production to Mexico. We estimate this channel is economically meaningful, accounting for about 14 percent of Mexico's total export gains to the U.S. The majority of the remaining trade diversion, however, represents expansion by sources other than China, including Mexican firms as well as U.S. and other foreign multinationals operating in Mexico (Utar et al. 2025, 2026)
These findings highlight the complexity of modern supply chains and firms' relocation decisions and suggest that reductions in U.S. reliance on China may be overstated when production shifts indirectly through third countries. With tariffs now even higher and broader, these incentives may strengthen, potentially prompting firms from multiple countries to adopt similar strategies. Against this backdrop, the upcoming USMCA review will be important in shaping the direction of U.S. trade policy toward Mexico and its broader global trading partners.
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References
Alfaro, Laura, and Davin Chor (2025). "An Anatomy of the Great Reallocation in US Supply Chain Trade," NBER Working Paper 34490.
Arizala, Francisco, Tomohide Mineyama, and Hugo Tuesta (2025). " Relocation of Global Value Chains: The Role of Mexico," IMF Working Paper WP/25/180.
Bonadio, Barthelemy, Zhen Huo, Elliot Kang, Andrei A. Levchenko, Nitya Pandalai-Nayar, Hiroshi Toma, and Petia Topalova (2025). "Playing with blocs: Quantifying decoupling," Journal of International Economics, https://doi.org/10.1016/j.jinteco.2025.104204.
Bonadio, Barthelemy, Andrei A. Levchenko, and Nitya Pandalai-Nayar (2026). "Falling Dominoes? The Impact of the US Exit from Free Trade on the Sustainability of Trade Cooperation," NBER Chapters.
Chen, Natalie, Dennis Novy, and Diego Solorzano (2025). "Trade Diversion and Labor Market Outcomes," CESifo Working Paper.
Dang, Alicia H., Kala Krishna, and Yingyan Zhao (2023). "Winners and losers from the US-China trade war," NBER Working Paper 31922.
Freund, Caroline (2025). "The China wash: Tracking products to identify tariff evasion through transshipment," UC San Diego School of Global Policy and Strategy 21st Century China Center and Center for Commerce and Diplomacy.
Freund, Caroline, Aaditya Mattoo, Alen Mulabdic, and Michele Ruta (2024). "Is US trade policy reshaping global supply chains?," Journal of International Economics, https://doi.org/10.1016/j.jinteco.2024.104011
Garred, Jason, and Song Yuan (2025). "Relocation from China (with Chinese characteristics)," Journal of Development Economics, https://doi.org/10.1016/j.jdeveco.2025.103510
Grossman, Gene M., Elhanan Helpman, and Stephen J. Redding (2024). " When tariffs disrupt global supply chains," American Economic Review, https://doi.org/10.1257/aer.20211519
Hoang, Trang, and Carter Mix (2026). "Trade wars and rumors of trade wars: The dynamic effects of the US-China tariff hikes," Journal of International Economics, https://doi.org/10.1016/j.jinteco.2026.104229
Utar, Hale (2026). "Elsewhere in North America: How U.S. Tariffs on China Boosted Mexico's Manufacturing Employment and Output," CESifo Working Paper 12425.
Utar, Hale, Alfonso Cebreros Zurita, and Luis Torres (2025). "The US-China trade war and the relocation of global value chains to Mexico," Review of Economics and Statistics, https://doi.org/10.1162/REST.a.1682
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Appendix
A.1 Data
Our main data source is UN Comtrade (2014-2024), which provides monthly bilateral trade flows at the HS 6-digit level (rev4) between the U.S., China, and Mexico. This data allows us to quantify the size of trade diversion. We complement our results using sectoral FDI flows to Mexico by country of origin (2014-2024) from fDi Markets, which capture greenfield investment and measure Chinese and other foreign presence in Mexico, and OECD Input-Output Tables (2014-2022, ISIC-2 rev4), which allow us to measure domestic and Chinese value added in Mexican exports to the U.S. We harmonize products into broad sectors for analysis.
A.2 Definitions
We define trade diversion as the increase in U.S. imports from Mexico that occurred because China faced higher tariffs, making Mexico more cost competitive. This diversion can take two forms: (1) Substitution toward Mexico: Mexican firms or existing non-Chinese operations in Mexico become more competitive relative to China. (2) China's backdoor strategy: China circumvents tariffs by routing goods through Mexico, either through (a) transshipment--shipping Chinese-produced goods via Mexico with minimal processing--or (b) production in Mexico by Chinese-owned firms or using substantial Chinese inputs. Distinguishing between these channels is critical for policy. If trade diversion largely reflects relocated Chinese production or transshipment, U.S. decoupling efforts may be weakened and tariff revenue reduced.
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1. Maria Aristizabal-Ramirez (email: maria.aristizabalramirez@frb.gov), Chris A. Avalos, Emma Rosenbaum, and Eva Van Leemput are with the Board of Governors of the Federal Reserve System. The views expressed in this note are our own, and do not represent the views of the Board of Governors of the Federal Reserve, nor any other person associated with the Federal Reserve System. Return to text
2. Over the course of 2018-19, the U.S. raised tariffs on roughly two-thirds of Chinese imports increasing the average tariff by 12 percentage points. This created a significant tariff differential with Mexico, where tariff rates were near zero and remained at that level after USMCA was ratified. Return to text
3. The surge in Chinese FDI to Mexico is consistent with patterns documented by Arizala et al. (2025) and mirrors a broader global phenomenon in which countries gaining U.S. market share from China simultaneously increase their imports from China (Freund et al., 2024). Return to text
4. The Hodrick-Prescott (HP) filter is a smoothing technique that separates a time series into trend and cyclical components, filtering out short-term fluctuations to identify the underlying growth path. Return to text
5. Formally, we regress the change in Mexican exports on a tariff indicator, initial U.S.-China trade volume (capturing treatment intensity), their interaction, and pre-tariff growth trends. The interaction term captures differential growth for tariff-exposed goods.differential growth for tariff-exposed goods. Return to text
6. In our analysis, we classify a product as transshipped only if it meets three criteria. First, we require evidence of re-routing: U.S. imports from China declined while Mexican imports from China and Mexican exports to the U.S. both increased. Second, to rule out general Chinese export expansion, Chinese exports to Mexico must have grown faster than Chinese exports to the rest of the world. Third, to rule out increased Mexican domestic demand, Mexican export growth to the U.S. cannot significantly exceed Mexican import growth from China (indicating minimal value added). Our approach is similar to Freund (2025), who also uses bilateral trade patterns to identify transshipment, though our criteria are slightly more conservative. Return to text
7. Our estimate aligns with the lower end of Freund's (2025) 1-1.5 percent range for Mexico. Our more stringent criteria--requiring absolute declines in U.S.-China trade and that Mexican export growth not exceed import growth from China--place our estimate at the lower bound. However, even if transshipment were 1.7 percent instead of 1 percent, this would not change our core finding that China's backdoor strategies primarily involve production rather than pure transshipment. Return to text
Please cite this note as:
Aristizabal-Ramirez, Maria, Chris A. Avalos, Emma Rosenbaum, and Eva Van Leemput (2026). "Mexico in U.S. Supply Chains: Lessons from 2018-19 Tariffs," FEDS Notes. Washington: Board of Governors of the Federal Reserve System, June 05, 2026, https://doi.org/10.17016/2380-7172.4073.
Disclaimer: FEDS Notes are articles in which Board staff offer their own views and present analysis on a range of topics in economics and finance. These articles are shorter and less technically oriented than FEDS Working Papers and IFDP papers.
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Original text here: https://www.federalreserve.gov/econres/notes/feds-notes/mexico-in-u-s-supply-chains-lessons-from-2018-19-tariffs-20260605.html
FCC Wireline Competition Bureau Issues Public Notice Reminding Eligible Telecommunications Carriers of Need to File FCC Form 481 to Receive Lifeline Support
WASHINGTON, June 6 -- The Federal Communications Commission's Wireline Competition Bureau issued the following public notice (WC Docket No. 11-42):
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The Wireline Competition Bureau (Bureau) issues this Public Notice to remind eligible telecommunications carriers (ETCs) that the information required pursuant to section 54.422 of the Commission's rules must be filed by July 1, 2026, using FCC Form 481, in order to receive low-income support under the Lifeline program./1
Pursuant to section 54.422(a), all ETCs must report information related to company names and ownership, and also the terms
... Show Full Article
WASHINGTON, June 6 -- The Federal Communications Commission's Wireline Competition Bureau issued the following public notice (WC Docket No. 11-42):
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The Wireline Competition Bureau (Bureau) issues this Public Notice to remind eligible telecommunications carriers (ETCs) that the information required pursuant to section 54.422 of the Commission's rules must be filed by July 1, 2026, using FCC Form 481, in order to receive low-income support under the Lifeline program./1
Pursuant to section 54.422(a), all ETCs must report information related to company names and ownership, and also the termsand conditions of offered Lifeline plans./2 Pursuant to section 54.422(b), all ETCs designated under section 214(e)(6) of the Communications Act who do not receive high-cost support must also make additional submissions, including information on outages and complaints, and make certifications regarding compliance with relevant Commission rules./3 ETCs provide this information on the FCC Form 481./4
The window for filing FCC Form 481 opened on April 1, 2026, and service providers can log into https://forms.universalservice.org/portal/login to access, certify, and file FCC Form 481 by the July 1, 2026 deadline. Pursuant to section 54.422, all outstanding and future Lifeline reimbursements will be withheld from ETCs who do not file FCC Form 481 by July 1, 2026, until such time that the ETC files the required form./5 Even if an ETC does not currently intend to seek Lifeline support, it must file FCC Form 481 to receive outstanding or future reimbursements./6
To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an e-mail to fcc504@fcc.gov or call the Consumer and Governmental Affairs Bureau at 202-418-0530.
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Footnotes:
1/ See 47 CFR Sec. 54.422. Although the Commission recently issued a Notice of Proposed Rulemaking to request comment on potentially making changes to FCC Form 481, requirements related to the FCC Form 481 remain unchanged at this time. See Lifeline and Link Up Reform and Modernization et al., WC Docket No. 11-42 et al., Notice of Proposed Rulemaking, FCC 26-8, 2026 WL 607836, at *23-24, paras. 71-77 (Feb. 23, 2026). The guidance herein applies to all ETCs, including those operating pursuant to compliance plans.
2/ See 47 CFR Sec. 54.422(a).
3/ See 47 CFR Sec. 54.422(b) (stating that "[i]n order to receive support under this subpart, a common carrier that is designated as an eligible telecommunications carrier under section 214(e)(6) of the Act and does not receive support under subpart D of this part must annually provide" the required information).
4/ See FCC, FCC Form 481 and Instructions, https://www.fcc.gov/document/fcc-form-481-and-instructions (last visited May 8, 2026); USAC, Forms, https://www.usac.org/lifeline/rules-and-requirements/forms/ (last visited May 8, 2026).
5/ See 47 CFR Sec. 54.422. However, reimbursements being withheld for additional or unrelated reasons will remain withheld, even after the filing of FCC Form 481.
6/ ETCs who have no expectation of receiving future Lifeline reimbursements may seek to relinquish their ETC designation. See 47 U.S.C. Sec. 214(e)(4); 47 CFR Sec. 54.205.
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Original text here: https://docs.fcc.gov/public/attachments/DA-26-561A1.pdf
FCC Wireless Telecommunications Bureau Issues Public Notice Reminding Wireless Handset Manufacturers of Upcoming Hearing Aid Compatibility Compliance Dates
WASHINGTON, June 6 -- The Federal Communications Commission's Wireless Telecommunications Bureau issued the following public notice (WT Docket No. 23-388):
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The Wireless Telecommunications Bureau (Bureau) reminds wireless handset manufacturers of upcoming hearing aid compatibility filing deadlines and the end of the 100% hearing aid compatibility transition period./1 Handset manufacturers will file their last FCC Form 655 this coming July./2 This compliance filing will cover the reporting period from July 1, 2025 to June 30, 2026 and will show compliance with the Commission's existing 85%
... Show Full Article
WASHINGTON, June 6 -- The Federal Communications Commission's Wireless Telecommunications Bureau issued the following public notice (WT Docket No. 23-388):
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The Wireless Telecommunications Bureau (Bureau) reminds wireless handset manufacturers of upcoming hearing aid compatibility filing deadlines and the end of the 100% hearing aid compatibility transition period./1 Handset manufacturers will file their last FCC Form 655 this coming July./2 This compliance filing will cover the reporting period from July 1, 2025 to June 30, 2026 and will show compliance with the Commission's existing 85%hearing aid compatibility benchmark along with all other applicable hearing aid compatibility requirements./3 The filing window for this last FCC Form 655 submission will open on July 1, 2026 and close on July 31, 2026 and will be accessible at https://www.fcc.gov/filing-hearing-aid-compatibility-reports-and-certifications.
The Bureau also reminds handset manufacturers that the 100% hearing aid compatibility benchmark and related provisions will take effect starting on December 15, 2026./4 Starting on this date, handset manufacturers may no longer offer non-hearing aid compatible handset models. Further, 85% of the handset models that handset manufacturers offer must meet acoustic and telecoil coupling requirements./5 The other 15% of handset models that handset manufacturers offer must meet acoustic and Bluetooth coupling requirements; these handset models may also meet telecoil requirements in addition to the acoustic and Bluetooth coupling requirements./6 In addition, as is currently required, all new handset models must meet either the 2019 ANSI Standard's volume control requirement or the temporary volume control waiver standard which is set to expire on September 29, 2027./7
In addition, the Bureau reminds handset manufacturers that starting next January they will file their first revised FCC Form 855 demonstrating compliance with the 100% hearing aid compatibility benchmark and related requirements./8 This filing will cover the reporting period of December 15 to December 31, 2026./9 Thereafter, the filing will cover the previous calendar year of January 1 through December 31. The filing window for the upcoming FCC Form 855 submission will open on January 4, 2027 and close on February 1, 2027. The form will be accessible at https://www.fcc.gov/filing-hearingaid-compatibility-reports-and-certifications and will be identified as revised FCC Form 855 for handset manufacturers./10 Starting January 2027 and every January thereafter handset manufacturers and service providers will both be submitting FCC Form 855 compliance filings during the January filing window./11 It is important, therefore, that handset manufacturers and service providers file the version of the form applicable to them.
The hearing aid compatibility requirements apply to all handset manufacturers that offer handset models for sale or use in the United States that are used to deliver digital mobile services./12 These rules apply regardless of whether the manufacturer is located outside of the United States or whether a handset manufacturer's handset models are offered by third parties for use in the United States or are sold under different brand names for use in the United States./13 If the handset manufacturer is a non-U.S. company, the company's U.S. business office address and phone number must be included with its certification filings. If the filing company does not have a U.S. business office address, then the filer must use its U.S. agent's address.
Commission staff will review hearing aid compatibility certifications to ensure that they are timely and accurately filed and demonstrate full compliance with the Commission's rules.
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Footnotes:
1/ See Achieving 100% Wireless Handset Model Hearing Aid Compatibility, WT Docket No. 23-388, Report and Order, 39 FCC Rcd 11917 (2024); 47 CFR Sec. 20.19.
2/ 47 CFR Sec. 20.19(i)(1), (4).
3/ 47 CFR Sec. 20.19(i).
4/ 47 CFR Sec. 20.19(c)(2).
5/ Acoustic coupling requirements refer to RF interference requirements under the applicable ANSI standard. 47 CFR Sec. 20.19(a) (definition of acoustic coupling); id at Sec. 20.19(b)(1)-(2) (referencing the 2019 ANSI standard's requirements for certifying handset models as hearing aid compatible).
6/ 47 CFR Sec. 20.19(c)(2)(iii).
7/ 47 CFR Sec. 20.19(c)(2)(v); see also Amendment of the Commission's Rules Governing Standards for Hearing AidCompatible Handsets, WT Docket No. 20-3, Order, 38 FCC Rcd 8636 (WTB Sept. 29, 2023) (adopting a temporary volume control standard); Achieving 100% Wireless Handset Model Hearing Aid Compatibility, WT Docket No. 23388, Order, DA 25-759 (WTB Aug. 26, 2025) (extending use of the temporary volume control standard).
8/ 47 CFR Sec. 20.19(i)(4).
9/ Between July 1, 2026 and December 14, 2026, handset manufacturers must be in compliance with the 85% hearing aid compatibility benchmark and related hearing aid compatibility requirements. Handset manufacturers who are not already in compliance with the 100% hearing aid compatibility benchmark must ensure they will be in compliance with this benchmark by December 15, 2026 and, therefore, we will not require handset manufacturers to file a closeout FCC Form 655 for the period between July 1, 2026 and December 14, 2026.
10/ Service providers will continue to file the current version of FCC Form 855 until the 100% hearing aid compatibility transition period applicable to them ends. 47 CFR Sec. 20.19(i). After the transition period applicable to them ends, they will file revised FCC Form 855. For nationwide service providers, the 100% hearing aid capability transition period ends on June 14, 2027, and for non-nationwide service providers, the transition period ends on June 13, 2028. 47 CFR Sec. 20.19(c)(4), (6).
11/ 47 CFR Sec. 20.19(i)(4).
12/ 47 CFR Sec. 20.19(c).
13/ 47 CFR Sec. 20.19(a) (definition of a handset manufacturer); id at 20.19(c).
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Original text here: https://docs.fcc.gov/public/attachments/DA-26-555A1.pdf
