The Trump Administration on 3 April released the proposed Fiscal Year 2027 Budget. According to a White House Fact Sheet, nondefense spending would be reduced by US$73b, or 10%, and military spending would increase to US$1.5t, "a $445 billion or 42-percent rise from the 2026 total resource level."

The US Congress is in the middle of a two-week recess, having failed to address the Department of Homeland Security (DHS) funding issue before leaving Washington.

At the same time, prospects for a second budget reconciliation bill to follow the One Big Beautiful Bill Act (OBBBA) may be higher now than they have been since the OBBBA passed last summer. Republicans are eyeing the possibility of a party-line bill or bills for issues with sharp policy differences with Democrats, like ICE practices and war funding.

Senate Majority Leader John Thune (R-SD) had been more circumspect about a second reconciliation bill until recently, when the approach emerged as a potential way forward to largely end the DHS shutdown. Senate Budget Committee Republicans meanwhile were already engaged in planning for a reconciliation bill before the recess.

There are increasing signs that some Republicans may want to include tax provisions in a second budget reconciliation bill. House Ways and Means Committee Chairman Jason Smith (R-MO) reportedly said, "If there's a second reconciliation, the Ways and Means Committee will have a significant footprint or there won't be a second reconciliation."

The IRS Advance Pricing and Mutual Agreement (APMA) Program on 30 March issued its 27th annual Advance Pricing Agreement report in Announcement 2026-08. The report discusses APMA, including its activities and structure for calendar year 2025, and provides useful insights into the operation of the APA Program.

The number of APA filings increased slightly in 2025, with taxpayers filing 178 APA requests (169 in 2024). The total number of APAs concluded, however, decreased for a second year from 142 to 110 and the average time to finalize an APA increased from 39.1 months in 2024 to 44.1 months in 2025.

APAs with India (35%), Japan (25%) and Canada (11%) comprised approximately 71% of all US bilateral APAs executed in 2025. A Tax Alert provides details.

President Trump on 2 April issued a proclamation imposing duties on certain pharmaceutical goods under Section 232 of the Trade Expansion Act of 1962, including up to 100% tariffs on certain patented pharmaceuticals and associated pharmaceutical ingredients. Tariffs will take effect for some companies on 31 July 2026, while other companies will see tariffs take effect on 29 September 2026.

Exemptions from the tariffs include generics, pharmaceutical imports from companies who have reached "Most Favored Nation" (MFN) deals with the administration, as well as pharmaceutical imports from countries who reach drug pricing agreements with the United States. The tariffs are also capped in certain cases pursuant to bilateral trade deals with US trading partners.

A 20% duty will be applied to those imports of patented pharmaceuticals and associated pharmaceutical ingredients "produced by companies that have plans, approved by the Secretary [of Commerce], to onshore production." The 20% rate would increase to 100% on 2 April 2030. A Global Tax Alert provides details.

A second presidential proclamation issued on 2 April provides that tariffs under Section 232 now apply to the full customs value of aluminum, steel and copper articles and their derivatives, regardless of metal content. Duty rates are 50% for most aluminum, steel and copper articles and certain derivative articles (subject to specified reduced rate conditions). A transitional regime applies through 31 December 2027 for products listed in Annex III to the proclamation. These products transition to standard Section 232 rates effective 1 January 2028.

Certain derivative articles are removed from the scope of the tariffs under Annex II, and additional derivative articles will be added on a rolling basis.

A reduced 10% duty rate will apply to articles with metal content of US origin, and 25% or 15% rates will apply to articles of United Kingdom origin, depending on the applicable product category. Aluminum articles of Russian origin remain subject to a 200% duty. A Global Tax Alert has details.

The US Customs and Border Protection (CBP) on 31 March updated the US Court of International Trade on the process to refund International Emergency Economic Powers Act (IEEPA)duties. In a declaration, the CBP reported material progress on its new Consolidated Administration and Processing of Entries (CAPE) functionality within the Automated Commercial Environment (ACE) to calculate and refund IEEPA duties.

Electronic refunds are mandatory for all IEEPA refunds. As of 26 March 2026, 26,664 importers of record have completed electronic refund setup, covering 78% of affected entries (approximately US$120b principal). A Global Tax Alert provides details.