Section 122 Tariffs Expire for Many Imports, But New Section 301 Forced-Labor Tariffs on 60 Economies Replace Them, Effective July 24, 2026

On July 23, 2026, the United States Trade Representative (USTR) announced new tariffs of 10% to 12.5% on imports from 60 foreign economies after the USTR determined that the relevant governments have failed to effectively enforce prohibitions on the importation of goods produced with forced labor — or, in some cases, to have failed to impose such a prohibition at all — creating an unreasonable burden on U.S. commerce. The new tariffs cover the majority of the United States’ trading partners. These tariffs are imposed through Section 301 of the Trade Act of 1974, and are effective as of 12:01 a.m. on July 24, 2026, immediately after the expiration of Section 122 10% tariffs on all countries, with a narrow in-transit exception that applies to goods loaded onto a vessel on the final leg of transit before the effective date and entered before 12:01 a.m. on July 28, 2026. Importers should immediately assess country-of-origin exposure across their supply chains, review the exemption schedules and free-trade-agreement pathways, and plan for how these duties will stack with existing Section 232 tariffs, antidumping and countervailing duties, and (for Canadian goods) the pending Section 338 tariffs. Importers should also be aware that other Section 301 investigations are ongoing, including a wide-ranging investigation into “excess capacity” by a large number of trading partners, and so additional duties under Section 301 may follow later this year. 

Country-Specific Tariffs

The new Section 301 tariffs range from 10% to 12.5%, and these tariffs add onto existing tariffs and other duties and fees, although the exact details vary by country. For some countries, the Section 301 tariff is charged net of the existing product-specific tariffs at Most-Favored-Nation (MFN) rate, meaning the Section 301 tariff combines with the MFN rate to reach the target tariff (10% or 12.5%), and is set to zero where the MFN rate already meets or exceeds that cap.

• Products of the European Union and Taiwan will pay a Section 301 tariff sufficient to bring the combined MFN and Section 301 rate to 10% (no additional Section 301 tariff if existing tariff is already ≥10%).
• Products of Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, and the United Kingdom are subject to a 10% Section 301 tariff, which must be paid on top of existing tariff rates. These economies received the lower rate because each has imposed a forced-labor import prohibition, committed to impose one under an Agreement on Reciprocal Trade, or maintains a partial regime with the effect of preventing importation of certain forced-labor goods.
• Products of Japan, Korea, and Switzerland will pay a Section 301 tariff sufficient to bring the combined MFN and Section 301 rate to 12.5% (no additional Section 301 tariff if the MFN rate is already ≥12.5%).
• Products of all other investigated economies — including Algeria, Angola, Bahamas, Bahrain, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Egypt, 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, Türkiye, the United Arab Emirates, Uruguay, Venezuela, and Vietnam — are subject to a 12.5% Section 301 tariff which must be paid on top of existing tariff rates.
• Products of China will pay a 12.5% Section 301 tariff, which, when combined with the existing 25% Section 301 tariff on Chinese goods, brings the aggregate Section 301 tariff on Chinese imports to 37.5%. The Section 301 tariffs must be paid on top of any MFN rate for China. 

Product Exemptions for Existing Trade Programs and Designated Products

The USTR determination provides broad product-level exemptions, detailed across several hundred pages of the Federal Register Notice. Exemptions fall into two categories:

Generally applicable exemptions. These apply to goods of any investigated economy and cover: raw materials whose taxation would risk unavailability of domestic supply; products that could cause economy-wide disruption if tariffed; products that cannot be grown or produced in sufficient quantities or at reasonable prices in the United States or obtained from other sources (for example, coffee); articles for which the Section 301 tariff is unlikely to advance the policy goal of eliminating forced-labor practices; civil aircraft, engines, parts, components, subassemblies, and ground flight simulators; articles for use in pharmaceutical applications, including pharmaceutical precursors (and, effective July 31, 2026, patented pharmaceutical articles); and articles already subject to Section 232 tariffs — including steel, aluminum, copper (and derivative articles), passenger vehicles and light trucks, parts of passenger vehicles and light trucks, medium- and heavy-duty vehicles and their parts, wood products, and semiconductors.

Country-specific exemptions. Additional carve-outs apply to selected products of Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, Indonesia, Jordan, Malaysia, Switzerland, Taiwan, and the United Kingdom — targeted at products whose exemption would encourage those economies to fulfill or adopt forced-labor import prohibitions. These carve-outs commonly include silk, natural pearls, diamonds, and other precious and semiprecious stones; selected botanicals (for example, psyllium seed husks, argan oil, aloe, Tasmanian pepper, coconut, centella, and Boswellia); certain live plants and cut flowers; and other categories detailed in Annex II.

Products that qualify for preferential treatment under existing free trade agreements are exempt from the new Section 301 tariffs, including goods entered free of duty under the U.S.-Mexico-Canada Agreement (USMCA) for Canadian and Mexican products; the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) for textile and apparel goods of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua; and the Jordan-U.S. Free Trade Agreement for qualifying Jordanian goods. Importers should confirm eligibility criteria (including rules of origin, direct-shipment, and documentation requirements) with counsel and their customs brokers before asserting preferential treatment under a free trade agreement.

These Section 301 tariffs will stack with existing Section 301 tariff programs (most significantly on China, as noted above), and with any applicable antidumping and countervailing duties. However, initial guidance from U.S. Customs and Border Protection does not squarely address whether the new Section 301 tariffs will stack with the 50% Section 338 tariffs on Canadian goods scheduled to take effect on August 19, 2026 — an issue with significant cost implications for importers of Canadian goods that also fall within the Section 338 proclamations.

Section 301: Durable Tariff Authority

Unlike some emergency tariff authorities that have faced sustained legal challenges, Section 301 has been a well-established basis for U.S. tariff action for more than four decades, and the Supreme Court recently declined to review an appeals court decision affirming existing Section 301 tariffs against China. That being said, it is reasonable to expect litigation against these Section 301 tariffs with plaintiffs arguing that the Section 301 investigation into forced labor enforcement practices was predetermined and engineered to replace the Section 122 tariffs against the majority of the trading partners for the United States. As a practical matter, however, importers should expect these Section 301 tariffs to remain in place until either the investigated economy meaningfully addresses the underlying forced-labor enforcement failures, or the USTR modifies the action following further review, barring any court decisions in the coming months. (Meanwhile, the litigation regarding the legality of the Section 122 tariffs continues at the Court of Appeals for the Federal Circuit.)

Guidance for Importers

Importers should first plan for cost increases by mapping country-of-origin exposure across their import portfolio and identifying which goods fall within the 10% additive, 12.5% additive, or net-of-MFN tariff tiers, including goods of Chinese origin that may also remain subject to the existing 25% Section 301 tariffs. They should also model the combined impact of these new duties with other applicable tariff regimes, including existing Section 301 tariffs, antidumping and countervailing duties, and for Canadian goods, the pending Section 338 tariffs, to understand the fully landed-cost impact on pricing, margins, sourcing, and customer contracts.

At the same time, importers should assess mitigation opportunities by screening HTSUS classifications against the Annex I and Annex II exemption lists, confirming whether any raw-material, unavailable-in-U.S., pharmaceutical, Section 232, or country-specific carve-outs apply, and evaluating available FTA pathways for qualifying goods of Canada, Mexico, CAFTA-DR economies, and Jordan. Importers should also keep forced-labor due-diligence records current and defensible, and preserve classification, origin, exemption, protest, and drawback support where they intend to claim an exemption, seek a refund, or maintain a challenge position. Again, importers should also monitor other ongoing Section 301 investigations for the possibility of additional duties. 

Honigman’s team is monitoring this rapidly evolving situation and is ready to support our clients. For questions, please contact Angela Gamalski, Daniel Wendt, Chauncey Mayfield, Karl Hochkammer, David Cowen, or another member of the Honigman Executive Order Task Force.