Section 301 Forced Labor Tariffs

Importers now have a new tariff framework to account for across a broad share of global sourcing. Effective July 24, 2026, a new round of Section 301 tariffs tied to forced labor enforcement went into effect, adding 10% or 12.5% on top of existing duties for 60 countries, including China, India, the United Kingdom (UK), Canada, Vietnam, and the European Union (EU).

For many importers, this changes landed-cost calculations, customs planning, and sourcing decisions almost immediately. Here's what changed, who it applies to, and what to check before your next container clears customs.

What went into effect?

On July 24, 2026, the Office of the U.S. Trade Representative's (USTR) final action in a set of forced-labor investigations took effect. The move follows a June 2026 USTR determination that 60 trading partners had either failed to ban imports made with forced labor or failed to meaningfully enforce the bans they do have on record.

The result was an additional ad valorem duty of either 10% or 12.5%, applied broadly across most product categories in Chapters 1–97 of the tariff schedule.

Who’s on the list?

This isn't a narrow, single-country action—it covers 60 economies, and the list includes some of the biggest U.S. trading partners such as China, the EU, UK, Canada, Mexico, India, Japan, South Korea, Vietnam, Brazil, and dozens more.

If you're importing from almost anywhere outside North America, there's a good chance one of your origin countries is on this list, so it's worth checking the full economy list against your own sourcing footprint.

Why isn’t the rate the same for everyone?

Not every country pays the same rate. Roughly 17 economies pay a flat 10% because they already ban forced-labor imports, have committed to doing so under a trade agreement, or have a partial enforcement regime in place. Those countries include:

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 EU and Taiwan are also subject to a 10% rate calculated net of the existing Most Favored Nation (MFN) rate. If the MFN duty rate is below 10%, a Section 301 tariff is added to bring the total duty to 10%. If the MFN rate is 10% or higher, no Section 301 tariff applies.

Japan, South Korea, and Switzerland also receive the same net-of-MFN treatment but at 12.5%.

A 12.5% tariff applies to goods from all other economies investigated under the Section 301 forced labor action if they are not listed above.

Tariff stacking rules apply

For shippers moving goods out of China or Brazil in particular, the new duty applies on top of existing Section 301 tariffs already in place for those countries, not instead of them. That means total duty exposure for some product lines could be meaningfully higher than the 12.5% suggests when tariffs stack, or are applied in addition to each other.

Check exemptions: Not everything is covered

Several product and country-specific exemptions exist, and certain Free Trade Agreement (FTAs) remain available.

U.S.–Mexico–Canada Agreement (USMCA) qualifying goods are fully exempt, as are Dominican Republic-Central America FTA (CAFTA-DR) textile and apparel goods from six Central American and Caribbean countries.
Products already subject to the Section 232 tariffs are not subject to the Section 301 forced labor tariffs.
USTR also added 471 additional Harmonized Tariff Schedule of the United States (HTSUS) subheadings to the exemption list after public comment, largely covering raw materials and supply-chain-critical goods that can't be sourced domestically in sufficient volume.

Importers should run their specific tariff codes against the exemption annexes rather than assuming coverage based on country alone.

Goods already in transit

If your goods were already loaded on a vessel and in transit before the July 24 cutoff, there's some relief: those shipments avoid the additional duty if they're entered for consumption or withdrawn from a warehouse for consumption before 12:01 a.m. Eastern Time on July 28, 2026.

What to do now

Use these steps to quickly assess your exposure and keep shipments moving with fewer surprises:

Map your sourcing countries against the 60-economy list and confirm which rate tier applies.
Check your specific HTSUS codes against both exemption annexes before assuming a duty applies.
If you have goods currently in transit, contact your customs broker immediately to see if the July 28 entry deadline is realistic.
Longer term, this is a good moment to revisit supplier contracts and landed-cost models, since these tariffs don't come with an obvious expiration date the way some prior emergency tariffs did.

The bigger picture

This action follows a February 2026 Supreme Court ruling that curtailed the use of emergency powers for tariffs, pushing the administration toward Section 301 as its primary long-term trade tool.

For shippers, the question is whether this becomes a shorter-lived measure or a framework that remains in place for several years. Review cost planning and make sure your business is prepared for what may be more than a temporary disruption.