What Importers Need to Stay on Top of Changes
New Section 301 tariffs took effect on July 24, 2026, affecting most imports from 60 U.S. trading partners. According to the Office of the United States Trade Representative (USTR), these economies account for 99.4% of U.S. imports.
These new tariffs have been expected in some form since the Supreme Court struck down the similar IEEPA tariffs earlier this year.
For importers, the impact will depend on the product’s country of origin and eligibility for an exemption. There are a number of products exempted from the Section 301 tariffs including “raw materials” and “products that cannot be grown or produced” in the United States alongside “products that could cause economy-wide disruptions if subject to additional tariffs.”
Why Were the New Section 301 Tariffs Imposed?
Section 301 of the Trade Act of 1974 allows the United States to respond to foreign government practices that are considered unreasonable or discriminatory and that burden or restrict U.S. commerce.
At President Trump’s direction, USTR investigated 60 economies regarding their failure to impose and effectively enforce prohibitions against importing goods made with forced labor. USTR ultimately determined that these practices were actionable under Section 301.
The tariffs are broadly based on each economy’s policies and enforcement; not on whether an individual shipment has been proven to contain forced-labor inputs.
What Section 301 Tariff Rates Apply?
The final action establishes several tariff treatments:
- A 10% additional tariff applies to goods from 17 economies that have adopted, partially implemented or committed to implementing forced-labor import restrictions.
- For goods from the European Union and Taiwan, the Section 301 duty generally brings the combined Most-Favored-Nation (MFN) and Section 301 rate to 10%.
- For Japan, South Korea and Switzerland, the combined rate generally reaches 12.5%.
- Goods from the remaining investigated economies are generally subject to an additional 12.5% tariff.
Exemptions and the In-Transit Provision
Not every product from a covered economy is subject to the new tariffs. Exemptions include informational materials, qualifying donations, accompanied baggage and products already subject to certain Section 232 tariffs, which affect steel and aluminum.
Qualifying goods from Canada and Mexico entered duty-free under the United States-Mexico-Canada Agreement are also excluded.
What Should Importers Do Now?
Importers should confirm the country of origin and Harmonized Tariff classification for each product, identify the correct Chapter 99 reporting number and determine whether an exemption applies. Remember that origin is based on where a product was manufactured or substantially transformed, not simply where it was shipped from.
Businesses should also recalculate landed costs, review supplier agreements and Incoterms, and maintain documentation supporting classifications, origin determinations and claimed exemptions. Textile and apparel importers should monitor forthcoming tariff-rate quotas for Bangladesh, Cambodia, Indonesia and Malaysia.
Clients of Sheltered International can rest assured that we are closely monitoring this situation. We are fully able to assist importers with tariff classification, duty estimates, and exemption reviews as these requirements continue to develop.
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