Insights

On July 23, 2026, the Office of the United States Trade Representative (“USTR”) announced the implementation of new tariffs on imports from 60 foreign countries under Section 301 of the Trade Act of 1974. The tariffs generally range from 10% to 12.5% and apply to nearly all products from the covered countries, subject to extensive product-specific and country-specific exemptions. The new duties are effective July 24, 2026, and arise from USTR investigations announced earlier this year concerning foreign governments’ failure to prohibit imports made with forced labor.

Events Leading up to Section 301 Tariffs

On March 12, 2026, the USTR initiated 60 separate Section 301 investigations concerning the failure of various countries to impose and effectively enforce prohibitions on the importation of goods produced wholly or in part with forced labor. On June 2, 2026, the USTR determined that the identified acts, policies, and practices by these countries were unreasonable and burdened or restricted U.S. commerce and were therefore actionable under Section 301. Based on the investigation findings and determinations, the USTR relied on this authority under Section 301 to impose broad ranging tariffs on imports from the subject countries.

As a practical matter, the new Section 301 tariffs largely replace the 10% global tariffs imposed under Section 122 of the Trade Act of 1974 that were effective from February 24, 2026 to July 24, 2026. The new Section 301 duties took effect at precisely the same time the Section 122 tariffs expired. The back-to-back effective dates and similarly broad coverage create substantial practical continuity for many importers that had been paying the Section 122 tariffs. However, importers must not assume the new Section 301 tariff regime carries on the prior Section 122 tariff rates, exemptions, and coverage without change.

Applicable Tariff Rates

Under the new Section 301 tariff structure, the subject countries can be divided into three principal categories.

1. MFN rate + additional 10%: A 10% additional Section 301 duty applies on top of the most-favored nation (“MFN”) rate for items imported from Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, and the United Kingdom.

2. Additional 10% or 12.5% “net of most-favored-nation duty”: If a product’s MFN rate is less that 10% or 12.5%, depending on the country, the sum of the MFN rate and the Section 301 tariff rate will equal 10% or 12.5%. If a product’s MFN rate is greater than or equal to 10% or 12.5%, depending on the country, the Section 301 tariff rate will be 0%.

   • For goods from the European Union or Taiwan, the combined MFN duty rate and the new Section 301 duty generally will equal 10%. Where the ordinary MFN duty rate is already 10% or more, no additional Section 301 duty applies.

   • For Japan, South Korea, and Switzerland, the combined MFN and Section 301 rate will generally equal 12.5%, with no additional Section 301 duty where the ordinary MFN rate is already at least 12.5%.

3. MFN rate + additional 12.5%: Goods from the remaining investigated countries are generally subject to an additional 12.5% Section 301 duty on top of the MFN rates. This category includes Algeria, Angola, Australia, the Bahamas, Bahrain, Brazil, Chile, China, Colombia, Costa Rica, Dominican Republic, Egypt, Guyana, Hong Kong, Iraq, Israel, Kazakhstan, Kuwait, Libya, Morocco, New Zealand, Nicaragua, Nigeria, Norway, Oman, Peru, the Philippines, Qatar, Russia, Saudi Arabia, Singapore, South Africa, Thailand, Turkey, the United Arab Emirates, Uruguay, Venezuela, and Vietnam.

Product Exemptions and Other Special Rules

The Section 301 tariffs do not apply uniformly to every product. Annexes I and II to the USTR’s notice contain broad general product exemptions as well as country-specific product exemptions. The USTR explained that exempted products include necessary raw materials, products that could cause economy-wide supply disruptions, products that cannot be produced domestically in sufficient quantities or at reasonable prices, and products for which tariffs would not materially advance the objectives of the investigations.

Products already subject to tariffs under Section 232 of the Trade Expansion Act of 1962 are generally exempt from the new Section 301 tariffs. Additionally, USMCA-qualifying goods are also subject to certain exemptions. Other exemptions apply to a broad range of products within groups that have been the subject of ongoing reciprocal trade negotiations and framework agreements. These exempted products include certain agricultural goods, pharmaceuticals, and civil aircraft including their engines, parts, and components.

The USTR also plans to establish tariff-rate quotas for certain textile and apparel products from Bangladesh, Cambodia, Indonesia, and Malaysia. Those future quotas will be linked to the economies’ purchases of U.S. cotton and textile inputs. Until the USTR establishes the quotas through a subsequent notice, the otherwise applicable 10% Section 301 duty remains in effect.

Key Takeaways for Importers

Importers should immediately update their tariff-screening and landed-cost processes to account for the new Section 301 tariffs and expiration of the Section 122 global tariffs. Companies should be careful to determine the correct country of origin for imported goods under U.S. customs rules to determine the applicable Section 301 tariff rate and identify potential exemptions.

Importers should also review entries involving goods that were exempt from the prior Section 122 tariffs. An exemption under the Section 122 tariff regime does not necessarily carry over to the new Section 301 regime. Conversely, the Section 301 notice contains exemptions and country-specific arrangements that were not part of the Section 122 tariff measures.

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If you have questions about the application of the new Section 301 tariffs or related product exemptions, please contact the attorneys at Torres Trade Law for assistance.