On July 23, 2026, the Office of the United States Trade Representative (USTR) issued a notice of action concluding 60 parallel Section 301 investigations into the failure of various economies to impose and effectively enforce a prohibition on the importation of goods produced with forced labor. Acting under the specific direction of the President, the Trade Representative is imposing additional tariffs of 10 percent or 12.5 percent on all products of each of the 60 investigated economies, subject to enumerated exemptions. The additional duties apply to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Time on July 24, 2026.

This is the first use of Section 301 of the Trade Act of 1974 on a near-global basis and the first use of the statute to address forced labor enforcement practices of trading partners rather than the trading partners' own market access barriers. The action covers nearly all major U.S. trading partners, including China, the European Union, Japan, Korea, Canada, Mexico, India, and the United Kingdom.

Background

USTR initiated the 60 investigations on March 12, 2026, under Section 302(b)(1) of the Trade Act (91 FR 12884). On June 2, 2026, the Trade Representative determined that certain acts, policies, and practices of each investigated economy are actionable under Sections 301(b) and 304(a), finding that 54 economies had failed both to impose and to effectively enforce a forced labor import prohibition, and that six economies (Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan) had imposed a prohibition but failed to effectively enforce it.

Proposed actions were published on June 5, 2026 (91 FR 34272). USTR received more than 1,600 written comments and held a three-day public hearing on July 7 through 9, 2026, with testimony from over 100 witnesses, including representatives of investigated economies' governments. On July 23, 2026, the President issued a memorandum directing the final tariff structure, and USTR issued the notice of action the same day.

The Tariff Structure

The final action establishes three rate categories, differentiated by whether an economy has imposed a forced labor import prohibition, undertaken commitments to do so through an Agreement on Reciprocal Trade (ART), or imposed a partial regime preventing the importation of certain forced labor goods:

• 10 percent additional duty: Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, and the United Kingdom.
• 10 or 12.5 percent net of MFN: For products of the European Union and Taiwan, the Section 301 duty is set so that the sum of the MFN duty and the Section 301 duty equals 10 percent; for products of Japan, Korea, and Switzerland, the combined rate is capped at 12.5 percent. Where a product's MFN rate meets or exceeds the applicable cap, the Section 301 duty is zero.
• 12.5 percent additional duty: All other investigated economies, including China, Hong Kong, Vietnam, Thailand, Brazil, Australia, and Russia.

The net-of-MFN mechanism is a novel construction in the Section 301 context and will require line-level analysis at entry: the additional duty owed on a given product of the EU, Taiwan, Japan, Korea, or Switzerland depends on that product's MFN rate, so the effective Section 301 rate varies subheading by subheading.

Effective Date and In-Transit Goods: Entries Through July 28 Warrant Immediate Attention

The additional duties apply to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. ET on July 24, 2026. Goods that were loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. ET on July 24, 2026, are excluded from the additional duties, but only if they are entered for consumption or withdrawn from warehouse before 12:01 a.m. ET on July 28, 2026.

The loading window has closed, but the entry window has not. For the next several days, importers with qualifying cargo on the water should prioritize entry filing for arriving shipments, evaluate whether goods held in bonded warehouse should be withdrawn before the July 28 cutoff, and assemble documentation establishing lading dates and the final mode of transit in the event CBP requests substantiation of the in-transit claim.

Exemptions

The action includes two layers of exemptions, implemented through new HTSUS subchapter III, chapter 99 provisions and new U.S. note 52:

• Annex I (general exemptions). General exemptions apply across all 60 actions, including informational materials, donations, products for personal use in accompanied baggage, and articles subject to tariffs under Section 232 of the Trade Expansion Act of 1962. The Section 232 carve-out means, for example, that automobiles, auto parts, steel, and aluminum articles already subject to Section 232 duties are not subject to these Section 301 duties.
• Annex II (product exemptions). Part A exempts listed products of any investigated economy, spanning agricultural products, raw materials, and other goods with limited domestic availability. Parts B through N provide additional country-specific exemptions for the United Kingdom, EU member states, Switzerland, Malaysia, Cambodia, Guatemala, El Salvador, Argentina, Bangladesh, Taiwan, Indonesia, Ecuador, and Jordan. Part O addresses textile and apparel goods of Jordan, and of El Salvador and Guatemala entered duty-free under CAFTA-DR.

Relative to the June 5 proposal, USTR narrowed the exemption for certain chemicals and chemical products to their pharmaceutical applications only, in response to comments regarding competition with domestic production. Importers of chemical inputs should confirm whether products previously expected to be exempt remain exempt for their specific application.

Products subject to the new duties remain subject to MFN duties, other applicable chapter 99 duties except as provided in note 52, and any antidumping and countervailing duties. Chapter 98 treatment is generally preserved, except that for goods entered under subheadings 9802.00.40, 9802.00.50, and 9802.00.60 the additional duties apply to the value of repairs, alterations, or processing, and for heading 9802.00.80 to the value of the article assembled abroad less the cost or value of U.S. components.

Foreign Trade Zones

Products subject to the additional duties that are admitted into a U.S. foreign trade zone on or after the effective date must be admitted under privileged foreign status (19 C.F.R. 146.41), other than goods eligible for domestic status. Duty liability on covered merchandise is accordingly fixed at admission and cannot be managed through zone manipulation into a different tariff outcome.

Textile Tariff-Rate Quotas Still to Come

The President directed USTR to establish, when feasible, tariff-rate quotas for Bangladesh, Cambodia, Indonesia, and Malaysia with an initial duration of three years. The TRQs will permit specified volumes of textile and apparel goods to enter free of the Section 301 duties, with in-quota volumes tied to each economy's importation of U.S. cotton and textile inputs. Until the TRQs are established by a separate Federal Register notice, covered textile and apparel goods of these four economies are subject to the full 10 percent duty. Apparel importers sourcing from these countries should monitor the forthcoming notice closely, as quota structure and administration will determine whether meaningful duty relief is available.

No Exclusion Process, but Rates Are Not Static

USTR declined requests to establish a product exclusion process, stating that lowering tariffs on additional products would be inconsistent with the President's direction, and pointed to Section 307 of the Trade Act as the statutory mechanism for future modification of the actions.

The country rate assignments, however, have already proven responsive to policy change. Between the June 5 proposal and the final action, six economies (Cambodia, Guatemala, Honduras, India, Sri Lanka, and Trinidad and Tobago) imposed forced labor import prohibitions, and Jordan undertook commitments through an ART, moves that placed each in the lower 10 percent tier. The structure creates a clear incentive path: economies that adopt and enforce forced labor import regimes can expect more favorable treatment, and further rate migration between tiers should be anticipated as additional economies act.

The notice also includes an unusually extensive severability section, stating that each of the 60 tariff actions, and each exemption within each action, is intended to operate independently if any portion is held invalid, an indication that the government has structured the action with judicial review in mind.

What Importers Should Do Now

• Act on the July 28 entry deadline: qualifying in-transit goods must be entered or withdrawn before 12:01 a.m. ET on July 28, 2026, to avoid the additional duties. Document lading dates and final mode of transit.
• Map the duty impact: quantify exposure by country of origin and HTS subheading, mapped against the Annex II, Part A and country-specific exemption lists, including the pharmaceutical-application limitation on chemical exemptions.
• Model the net-of-MFN mechanics: for EU, Taiwan, Japan, Korea, and Switzerland origin goods, calculate the effective Section 301 rate line by line against MFN rates to avoid over- or under-payment at entry.
• Review tariff stacking: confirm that Section 232-covered articles are being entered under the correct chapter 99 provisions to secure the exemption from these duties.
• Revisit FTZ operations: assess admission strategy for covered merchandise in light of the mandatory privileged foreign status designation.
• Reassess valuation and origin strategy: customs valuation planning, including first sale for export and unbundling of non-dutiable charges, along with origin and supply chain planning, takes on added significance with duties now applying to nearly all origins.
• Monitor what comes next: the forthcoming TRQ notice for Bangladesh, Cambodia, Indonesia, and Malaysia, and potential rate-tier changes as additional economies adopt forced labor import prohibitions.

How A&M Can Help

A&M's Global Trade practice assists importers with tariff exposure quantification and scenario modeling, customs valuation and first sale planning, origin analysis, FTZ strategy, entry compliance, and engagement with CBP. We are actively advising clients on the interaction of this action with existing Section 301, Section 232, and IEEPA measures and can move quickly to assess company-specific impact.