US Administration Rebuilds Global Tariff Program Under Section 301

Just as the 10% temporary global tariff is set to expire, the US administration has imposed new tariffs under Section 301 of the Trade Act of 1974, preserving much of the structure and economic effect of its broader tariff program while shifting to a different statutory foundation. Effective July 24, 2026, the new duties generally impose tariffs of 10% or 12.5% on imports from 60 trading partners that account for approximately 99.4% of US imports, subject to significant product and country-specific exceptions.

The Office of the US Trade Representative (USTR) justified the action based on findings that the affected economies have failed to impose or effectively enforce prohibitions on the importation of goods produced with forced labor.

For importers, the immediate result may resemble the temporary 10% tariff imposed under Section 122 of the Trade Act following the US Supreme Court’s invalidation of the administration’s earlier International Emergency Economic Powers Act (IEEPA) tariffs. The legal and administrative framework, however, is materially different.

Businesses should promptly confirm the applicable rate and exemptions for their products, assess entries in transit, update customs instructions, and prepare for litigation that may determine whether Section 301 supports tariffs of this breadth.

A NEW STATUTORY BASIS FOR A CONTINUING TARIFF STRATEGY

The new action is the latest stage in the administration’s effort to maintain broad tariffs following adverse court decisions concerning its earlier tariff authorities.

After the Supreme Court invalidated tariffs imposed under IEEPA in February 2026, the administration imposed a 10% import duty under Section 122. That provision permits temporary tariffs to address fundamental international payment problems but generally limits the duration of those measures to 150 days. The Section 122 tariff took effect on February 24 and expired as the new Section 301 duties became effective on July 24.

The administration has clarified the consistency of its underlying trade strategy while moving from emergency economic authority to a temporary balance-of-payments measure and now to a trade enforcement statute that expressly permits duties in response to unjustifiable, unreasonable, or discriminatory foreign acts, policies, or practices affecting US commerce.

Section 301 has historically provided a more established legal basis for trade remedies than IEEPA or Section 122. Unlike the earlier tariff programs, the administration followed the investigative procedures required by the statute before imposing the new duties. At President Trump's direction, USTR initiated a Section 301 investigation targeting 60 trading partners on March 12, 2026, held initial public hearings in April, consulted with more than 45 affected governments, and determined on June 2 that the identified practices were actionable under Section 301. USTR then solicited public comment on the proposed remedies, received more than 1,600 comments, and heard testimony from more than 100 witnesses during a second round of hearings in July before issuing its final action.

The scale of the resulting action is nevertheless unusual. Section 301 has historically been used to address identified practices of a singular trading partner. The new regime applies across nearly the entire US import base and imposes duties on products without requiring a direct connection between an individual imported product and forced labor. USTR relied in part on statutory language permitting action against goods or economic sectors regardless of whether they were directly involved in the practice under investigation.

HOW THE NEW TARIFFS APPLY

The tariff rate depends primarily on the exporting economy’s forced labor import regime and, for certain trading partners, the terms of previously established reciprocal trade arrangements.

A 10% additional tariff generally applies to goods from economies that (1) impose a forced labor import prohibition, (2) have committed to impose and enforce such a prohibition through an Agreement on Reciprocal Trade, or (3) have implemented a partial regime that prevents the importation of certain forced labor goods. These economies are Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, and the United Kingdom.

Most goods from the remaining investigated economies are subject to a 12.5% additional tariff.

A modified calculation applies to goods from the European Union and Taiwan, where the combined most-favored-nation (MFN) tariff rate and Section 301 duty generally will not exceed 10%. For Japan, Korea, and Switzerland, the corresponding ceiling is generally 12.5%. If the existing MFN duty already equals or exceeds those thresholds, no additional Section 301 duty applies.

The duties apply to covered goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am ET on July 24, 2026. Limited transition relief applies only to articles loaded onto a vessel at the port of loading and already in transit on their final mode of transportation before that time, provided they are entered before 12:01 am ET on July 28.

Except where a specific exemption applies, the new Section 301 duties are cumulative with applicable antidumping duties, countervailing duties, and other duties, taxes, fees, and charges.

EXEMPTIONS MAY BE AS IMPORTANT AS THE HEADLINE RATES

Although the tariffs nominally apply to all products from the investigated economies, the implementing notice contains extensive exemptions. Importers should review the relevant Harmonized Tariff Schedule of the United States (HTSUS) provisions rather than assume that all goods from a covered economy are subject to the additional duties.

Exemptions include articles already subject to Section 232 trade measures, including covered steel, aluminum, automobiles, automotive parts, copper products, and certain other products. Certain qualifying goods from Canada and Mexico also remain outside the new duties, including products receiving preferential treatment under the United States–Mexico–Canada Agreement (USMCA).

The annexes also exempt various raw materials, energy products, agricultural goods, and other specified products. USTR explained that these exemptions are intended to address situations where tariffs could constrain domestic supply, cause economy-wide disruption, affect products unavailable in sufficient quantities or at reasonable prices from US or alternative sources, or encourage trading partners to fulfill forced labor commitments or where the tariffs would not materially contribute to eliminating the practices identified in the investigations.

Because exemptions are defined through specific tariff classifications and differ by country, companies should evaluate each product at the HTSUS subheading level. Existing classification, valuation, and country-of-origin analyses may also need to be revisited where sourcing or production structures have changed in response to earlier tariff measures.

TEXTILE TARIFF-RATE QUOTAS WILL FOLLOW

The administration also directed USTR to establish tariff-rate quotas for specified textile and apparel imports from Bangladesh, Cambodia, Indonesia, and Malaysia. The quotas are intended to encourage those countries to purchase US cotton and textile inputs while reducing reliance on supply chains that may involve forced labor.

Once implemented, qualifying import volumes will be eligible to enter without the additional Section 301 duty based on each country's use of US textile inputs. USTR has indicated that implementation should become feasible by September 1, 2026, but a separate Federal Register notice will establish the quotas and their effective date. Until then, the covered imports remain subject to the applicable 10% tariff.

LEGAL CHALLENGES TARGET SECTION 301'S REACH

Section 301 has survived numerous legal challenges over several decades (most recently, in response to the first Trump administration’s action targeting China’s practices related to technology transfer, intellectual property, and innovation) and contains procedural and remedial provisions that were absent from the administration's IEEPA approach. The administration conducted investigations, consultations, public comment periods, and hearings before imposing the duties, which may strengthen its defense against procedural challenges.

New litigation nevertheless was anticipated, and almost immediately following the announcement of the tariffs, a pair of lawsuits was filed by small businesses at the Court of International Trade challenging the duties. The first, filed by spice importer Burlap and Barrel Inc. (which also challenged the administration’s Section 122 tariffs) and California watch retailer Collective Horology LLC, argues that USTR failed to provide an adequate explanation for its imposition of “near-uniform duties across 60 economies with materially different enforcement records and trade profiles.” The plaintiffs argue that Section 301 is intended to target specific, unfair trade practices, not to impose a flat-rate tax on virtually all global imports. They filed the case as a proposed class action suit covering all importers of record who will pay the new tariffs. The second, filed on behalf of seven businesses, including IEEPA tariff challengers Learning Resources Inc. and hand2mind Inc., argues that this is the administration’s third attempt to impose “essentially the same set of sweeping global tariffs” and that the forced labor justification is a pretext used to enact the same tariffs that the Supreme Court previously struck down.

Importers should track these developments closely as a successful challenge could affect the validity, scope, or duration of the new tariffs, and may create opportunities to preserve refund rights.

IMMEDIATE CONSIDERATIONS FOR IMPORTERS

Importers should consider taking the following steps:

• Confirm the applicable country-specific tariff rate, tariff classification, and availability of any general or country-specific exemption for each imported product.
• Review goods in transit to determine whether they qualify for the limited transition relief and retain supporting shipment documentation.
• Update customs broker instructions, landed-cost calculations, bonding obligations, and internal import compliance systems to reflect the new duties.
• Reassess country-of-origin determinations and sourcing strategies, particularly where production changes were previously made in response to earlier tariff measures.
• Review commercial agreements for tariff allocation, price-adjustment, change-in-law, force majeure, and termination provisions.
• Monitor USTR and US Customs and Border Protection implementation guidance, including the planned textile tariff-rate quotas, additional exemption guidance, and ongoing judicial challenges.

LOOKING AHEAD

The new tariffs demonstrate that the administration intends to preserve its broader tariff program despite judicial limits on earlier statutory authorities. Section 301 may provide a more durable legal framework than IEEPA or Section 122, but using it across 60 investigations covering nearly all US imports raises legal questions that courts have not previously addressed at this scale.

Importers should plan on the basis that the duties will remain in effect while continuing to monitor litigation, negotiated changes, product exclusions, and implementation guidance. The immediate operational priority is to determine which imports are covered under the new framework. The longer-term priority is to maintain flexible sourcing, contracting, and compliance structures as the administration continues to reshape US trade policy through multiple statutory authorities.