See the following message from Roll & Harris LLP on the current updates for Section 301 “Forced Labor” tariffs.
USTR Slaps New Section 301 “Forced Labor” Tariffs on Imports from 60 Countries – Effective Today
At the direction of President Trump, U.S. Trade Representative Jamieson Greer has taken final action in USTR’s Section 301 investigations into the failure of 60 economies to impose and effectively enforce a ban on the importation of goods made with forced labor, imposing new tariffs of 10% or 12.5% on nearly all imports from those countries. These 60 economies account for 99.4% of U.S. imports, so the odds are high most supply chains are affected. A copy of the draft Federal Register notice may be downloaded here, but below is a short summary.
The tariffs are effective as of 12:01 am earlier today. The additional duties apply to products entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern time on July 24, 2026. To be sure, there is a narrow exception for goods loaded onto a vessel and in transit on the final mode of transit before 12:01 a.m. Eastern on July 24, 2026, and entered for consumption before 12:01 a.m. Eastern on July 28, 2026. Such goods are not subject to the new Section 301 tariffs and are reported using tariff classification 9903.05.85.
The tariff rates – 10% or 12.5% – depend on the country of origin of the good. A 10% rate applies to countries that have imposed a forced labor import ban, committed to do so through an Agreement on Reciprocal Trade (ART), or put in place a partial regime with that effect:
Argentina
Bangladesh
Cambodia
Canada
Ecuador
El Salvador
Guatemala
Honduras
India
Indonesia
Jordan
Malaysia
Mexico
Pakistan
Sri Lanka
Trinidad and Tobago, and
United Kingdom.
Every other investigated economy – including China, Brazil, Vietnam, Taiwan, and Israel – gets 12.5%. For a handful of countries the duty is applied “net of MFN”: for the European Union and Taiwan the Section 301 duty is set so the total of the MFN duty plus the Section 301 duty equals 10% (and is zero where the MFN rate already meets or exceeds 10%), and for Japan, Korea, and Switzerland the same math applies to a 12.5% ceiling. New 9903.05.20 thru 9903.05.84 tariff provisions set forth the new additional tariff classification required to be reported for goods of each of the 60 countries of origin.
These tariffs “stack”. Products subject to the new Section 301 duties are also subject to any other applicable duties in Chapter 99, so the forced labor tariff is generally imposed on top of existing duties.
Key exemptions – check the Annexes. The action does not cover informational materials, donations, or accompanied baggage, and – importantly – it does not apply to articles already subject to Section 232 tariffs, including aluminum, steel, and copper articles and their derivatives, autos and auto parts, medium- and heavy-duty vehicles and their parts, wood products, and semiconductor articles.
USTR also exempted a long list of specified products (raw materials, goods that could cause economy-wide disruptions, and goods unavailable from domestic or other sources), added 471 additional product exclusions per economy, and adopted certain country-specific exemptions.
Goods properly entered under most Chapter 98 provisions are also excluded, though partial-duty provisions such as 9802.00.80 remain subject to the duty on the applicable value.
USMCA origin goods are also exempt.
Importers should review new tariff codes 9903.05.86 thru 9903.06.2, which correspond to the exemptions/exclusions set forth in note 52(b) thru (j) to subchapter III of Chapter 99.
No exclusion process, and no drawback relief for FTZ goods. USTR declined to establish a product exclusion process, finding it inconsistent with the President’s direction. And any covered product admitted to a U.S. foreign trade zone must be admitted in “privileged foreign status” (unless eligible for “domestic status”).
Textile quotas are coming. USTR intends to establish tariff-rate quotas for Bangladesh, Cambodia, Indonesia, and Malaysia to allow a set volume of textiles and apparel to enter free of the Section 301 duty, but until those TRQs are established through a separate Federal Register notice, the new Section 301 tariffs apply to those goods.
Like other tariff measures of the past two years – today’s new tariffs require importers to continue to assess the country of origin, tariff classification, and exemption eligibility of their products.
We are continuing to monitor these developments and to assist importers in the constantly changing tariff minefield.
If you have any questions, please contact our office.
Stay Updated on Customs Compliance