Trade & TariffsJuly 28, 202610 min read

New Section 301 Forced Labor Tariffs: What Changed on 24 July 2026 and What Importers Need to Do

The temporary 10% global tariff surcharge that the US imposed under Section 122 of the Trade Act hit its 150-day legal limit and expired at midnight on 24 July 2026. In its place, the same day, a new set of Section 301 tariffs came into force. These target 60 trading partners that the USTR found had failed to prohibit or enforce bans on importing goods made with forced labor. The new rates are 10% for 17 economies that have adopted or committed to a forced-labor import prohibition, and 12.5% for the remaining 43. Together, those 60 economies account for roughly 99.4% of US imports. The grace period for goods already in transit when the tariffs took effect ends today, 28 July. If you import into the US from anywhere on that list, your landed cost just changed.

60 economies: number of trading partners subject to the new Section 301 forced labor investigations, covering roughly 99.4% of US imports by value
10% or 12.5%: additional duty rates applied under the new Section 301 action, depending on whether the trading partner has adopted a forced-labor import prohibition
24 Jul 2026: effective date of the new Section 301 tariffs, which replaced the expiring 150-day Section 122 global surcharge on the same day
28 Jul 2026: end of the grace period for goods already in their final mode of transit to the US before the tariffs took effect

Tariff rates, effective dates, and country list per USTR Section 301 action published July 2026. Coverage figure (99.4% of US imports) per USTR and trade press analysis.

Check your product classifications

The new Section 301 tariffs apply broadly, but product-specific exemptions exist. Check your HS codes against the exemption lists to understand whether your goods are covered or excluded.

Look up HS codes

What happened on 24 July

Two things happened simultaneously. First, the Section 122 surcharge expired. Section 122 of the Trade Act of 1974 allows the President to impose a temporary import surcharge for balance-of-payments reasons, but it has a hard 150-day limit. The 10% global surcharge that was applied earlier in 2026 hit that limit on 24 July and automatically ended.

Second, a new action under Section 301 took effect at the same moment. The USTR had conducted investigations into 60 trading partners and concluded that their failure to prohibit or enforce bans on goods made with forced labor constituted an unreasonable trade practice. The Section 301 tariffs are the remedy: additional duties of 10% or 12.5% on imports from those economies, with no built-in expiration date.

Not a continuation, a replacement

The Section 301 forced labor tariffs are a different legal instrument from the Section 122 surcharge they replaced. Section 122 had a 150-day time limit and broad balance-of-payments justification. Section 301 has no time limit and is based on specific unfair trade practice findings. The practical effect for many importers is similar, an additional duty on most imports, but the legal basis, the rate structure, the exemptions, and the duration are all different. Do not assume your Section 122 treatment carries over automatically.

Which countries are covered

The USTR investigated 60 economies. They are divided into two tiers based on whether they have adopted a forced-labor import prohibition:

10% rate (17 economies): Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, the United Kingdom, and Trinidad and Tobago. These have either adopted a forced-labor import prohibition or committed to one through trade agreements.
12.5% rate (43 economies): The remaining investigated economies, including China, Japan, South Korea, the European Union, Australia, Brazil, Vietnam, Thailand, Taiwan, and others.

For some economies, especially those with low existing MFN tariff rates, the Section 301 duty is calculated as a net top-up so that the combined MFN rate plus the Section 301 duty equals either 10% or 12.5%. This applies to the EU, Taiwan, Japan, South Korea, and Switzerland among others. The practical effect is that the total applied duty does not exceed the target rate.

What is exempt

The Section 301 action includes significant product-specific exemptions. These cover:

Raw materials that cannot be sourced domestically or from non-covered economies in sufficient quantities.
Goods critical to the US economy where applying the tariff would cause more harm than the trade practice it addresses.
Products already subject to Section 232 tariffs on steel and aluminium. Since these already carry their own additional duties, they are generally excluded from the new Section 301 layer to avoid double-stacking.
Specific product exclusions listed by HS code in the USTR's implementing notice. These exclusions can change over time as the USTR reviews and updates them.

If your products fall into one of these categories, you may not owe the additional duty, but you need to confirm the exemption against the specific HS code classifications in the implementing notice rather than assuming you are covered.

The grace period ends today

The USTR provided a short grace period for goods that were already in their final mode of transit to the US before the tariffs took effect on 24 July. That grace period runs through 28 July 2026, which is today. Any goods arriving at a US port of entry after today that are classified under the covered HS codes and originate from one of the 60 economies will be subject to the new duty.

If you have shipments that left port before 24 July but are arriving in the coming days, check with your customs broker whether they qualify for the grace period. The key criterion is the final mode of transit: the goods must have been loaded onto their last vessel, aircraft, or vehicle before midnight on 24 July to qualify.

How this changes your landed cost

For most importers, the practical effect is an additional 10% or 12.5% on top of the existing duty structure. This stacks on top of:

MFN tariff rates that already apply to your products based on their HS classification.
Any existing Section 301 tariffs (such as the China-specific Section 301 tariffs from 2018 to 2019 that remain in force on many product categories).
Anti-dumping or countervailing duties if applicable to your specific products.
Merchandise Processing Fee and harbour maintenance tax.

The cumulative effect can be substantial. For a product from China that already carries a 25% Section 301 tariff from the earlier action plus a standard MFN rate, adding another 12.5% pushes the total duty burden well above 40% of the product's declared value. For products from countries in the 10% tier, the addition is smaller but still meaningful on high-volume imports.

Recalculate now, not at the next quarterly review

If you run landed cost models or set retail pricing based on duty assumptions, update them today. The grace period is ending and the new rates are live. Every shipment arriving from tomorrow onward will carry the additional duty. Waiting until your next quarterly cost review means weeks of incorrect pricing or margin erosion.

What importers should do now

Confirm which tier your suppliers fall in. Check each country of origin against the 10% and 12.5% lists. If you source from multiple countries, each may have a different rate.
Review your HS classifications. Check whether any of your products fall under the specific exemptions in the USTR's implementing notice. A customs broker or trade compliance specialist can map your product codes against the exclusion list.
Update your landed cost calculations. Add the applicable Section 301 rate to your existing duty structure for every affected SKU. Recalculate total landed cost, margins, and any pricing that depends on them.
Check your in-transit shipments. If you have goods arriving today or in the next few days, confirm with your broker whether they qualify for the grace period based on when they entered their final mode of transit.
Review your sourcing strategy. If the cumulative duty burden on goods from a particular country has become prohibitive, assess whether alternative suppliers in non-covered or lower-rate economies are viable. The 17 economies at 10% are cheaper to import from than the 43 at 12.5%, all else being equal.
Watch for exclusion updates. The USTR has indicated it will review product exclusions over time. If your product is currently covered, a future exclusion could reduce your duty. If it is currently exempt, a future revision could add it. Stay informed.

The bottom line

The Section 301 forced labor tariffs that took effect on 24 July 2026 replaced the expiring Section 122 surcharge with a permanent and slightly broader set of additional duties. Sixty trading partners covering 99.4% of US imports are subject to rates of 10% or 12.5%, with limited product exemptions. The grace period for in-transit goods ends today, 28 July. For most importers this means a straightforward but immediate task: confirm your countries, check your HS codes for exemptions, recalculate your landed costs, and update your pricing. The tariffs have no expiration date, so this is not a temporary adjustment. It is the new baseline.

Check your product classifications

The new Section 301 tariffs apply broadly, but product-specific exemptions exist. Check your HS codes against the exemption lists to understand whether your goods are covered or excluded.

Look up HS codes

Frequently asked questions

What are the new Section 301 forced labor tariffs?

On 24 July 2026, the US implemented new tariffs under Section 301 of the Trade Act of 1974, targeting 60 trading partners that the USTR found had failed to prohibit or enforce bans on importing goods made with forced labor. The tariffs impose additional duties of 10% on imports from 17 economies that have adopted a forced-labor prohibition, and 12.5% on the remaining 43. These replaced the Section 122 global surcharge that expired the same day. The 60 covered economies account for roughly 99.4% of US imports by value.

Which countries are subject to the 10% rate versus the 12.5% rate?

The 10% rate applies to 17 economies that have adopted or committed to a forced-labor import prohibition: Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, the United Kingdom, and Trinidad and Tobago. The 12.5% rate applies to the remaining 43 investigated economies, including China, Japan, South Korea, the European Union, Australia, Brazil, Vietnam, Thailand, and Taiwan. For some economies with low existing MFN rates, the Section 301 duty is calculated as a net top-up so that the total duty does not exceed the target rate.

Are there exemptions from the new Section 301 tariffs?

Yes. The action includes product-specific exemptions for raw materials that cannot be sourced domestically in sufficient quantities, goods critical to the US economy, and products already subject to Section 232 tariffs on steel and aluminium. Specific product exclusions are listed by HS code in the USTR's implementing notice. The exemptions may be updated over time as the USTR reviews them. Importers should check their specific HS code classifications against the exclusion list rather than assuming coverage.

What happened to the Section 122 surcharge?

The Section 122 surcharge was a temporary 10% global import surcharge imposed earlier in 2026 under Section 122 of the Trade Act of 1974 for balance-of-payments reasons. Section 122 has a hard 150-day legal limit, and that limit was reached on 24 July 2026, at which point the surcharge automatically expired. The new Section 301 forced labor tariffs took effect at the same moment, effectively replacing the Section 122 surcharge with a permanent duty under a different legal authority. The Section 301 tariffs have no built-in expiration date.

When does the grace period for in-transit goods end?

The grace period ends on 28 July 2026. Goods that were already in their final mode of transit to the US before the tariffs took effect at midnight on 24 July qualify for the grace period and are not subject to the new duties. The criterion is whether the goods were loaded onto their last vessel, aircraft, or vehicle before that cutoff. Any goods arriving at a US port of entry after 28 July that did not meet this criterion will be subject to the applicable 10% or 12.5% Section 301 duty.

Trade & Tariffs