New Section 301 Tariffs Take Effect: What It Means for Importers

At 12:01 a.m. ET on Friday, July 24, 2026, the United States began collecting New Tariffs of 10% to 12.5% on imports from roughly 60 trading partners, covering an estimated 99.4% of all US imports. These new duties, authorized under Section 301 of the Trade Act of 1974, replace the temporary 10% global surcharge that had been in place since February and expired at midnight.

For trade compliance teams, this update involves both a new rate structure and a new statutory basis for the tariffs, which has implications for classification, duty planning, and recordkeeping.

Background

The timeline below provides context on how the current tariff structure took shape.

• February 20, 2026: The US Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) did not authorize the tariffs that had been in place since early 2025. Over $90 billion in already-collected duties became potentially eligible for refunds.

• February 24, 2026: The administration subsequently invoked Section 122 of the Trade Act of 1974, imposing a flat 10% global surcharge. Section 122 carries a statutory cap on rate and duration; by law, it was set to expire on July 24, 2026 absent Congressional action to extend it.

• June 2, 2026: The US Trade Representative published proposed Section 301 tariffs, based on investigations into forced labor and excess industrial capacity across roughly 60 economies, positioned as a longer-term successor to Section 122.

• July 24, 2026: Section 122 expired on schedule, and the new Section 301 (and, for some goods, Section 338) tariffs took effect the following morning.

What the new tariffs actually look like

Most of the 60 affected economies will see duties in the 10%–12.5% range. China's rate lands at 12.5%. Brazil is treated separately, facing an additional 25% tariff on top of existing duties. The action includes an exemptions annex covering certain agricultural products, aviation parts, industrial inputs, minerals, pharmaceutical goods, and items already subject to Section 232 tariffs. So the actual rate a given shipment faces still depends heavily on product-level classification, not just country of origin.

The EU, notably, isn't part of this reset in the same way, a separate trade agreement moved EU goods to a 15% ceiling on July 1, insulating them from the Section 301 rollout. Canada and Mexico goods covered by USMCA also remain outside this scenario, as they were for the IEEPA tariffs.

Country-by-Country Rate Breakdown

The rate an economy pays under this action depends on its own forced-labor import regime, as determined by USTR in its Federal Register notice (Docket Nos. USTR-2026-0265, USTR-2026-0266). The 60 investigated economies fall into four rate treatments:

• Flat 10% — 17 economies that have imposed a forced-labor import prohibition, committed to one under an Agreement on Reciprocal Trade (ART), or enforce a partial regime: 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%, net of MFN duty — European Union, Taiwan.

• 12.5%, net of MFN duty — Japan, South Korea, Switzerland.

• Flat 12.5% — the remaining 38 economies, including China, Brazil, Vietnam, and Russia. For China and Brazil, this duty applies in addition to those countries' existing Section 301 tariffs.

For the "net of MFN" treatment, the Section 301 duty and the product's existing most-favored-nation (MFN) tariff are combined so the total does not exceed the stated rate (10% or 12.5%, depending on the economy) — if the MFN rate alone already meets or exceeds that threshold, no additional Section 301 duty applies.

USTR also directed that tariff-rate quotas be established, when feasible, for Bangladesh, Cambodia, Indonesia, and Malaysia, tied to each economy's import of US cotton and textile inputs — allowing a set volume of textiles and apparel to enter free of the Section 301 duty for an initial three-year period.

The lists below give the confirmed rate for all 60 economies covered by the action, grouped by rate treatment, as stated in USTR's Federal Register notice.

• Flat 10% tariff (17 economies): Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, United Kingdom.

• 10%, net of MFN duty (2 economies): European Union, Taiwan.

• 12.5%, net of MFN duty (3 economies): Japan, South Korea, Switzerland.

• Flat 12.5% tariff (38 economies): Algeria, Angola, Australia, Bahamas, Bahrain, Brazil, Chile, China, Colombia, Costa Rica, Dominican Republic, Egypt, Guyana, Hong Kong, Iraq, Israel, Kazakhstan, Kuwait, Libya, Morocco, New Zealand, Nicaragua, Nigeria, Norway, Oman, Peru, Philippines, Qatar, Russia, Saudi Arabia, Singapore, South Africa, Thailand, Türkiye, United Arab Emirates, Uruguay, Venezuela, Vietnam.

Notes on specific economies:

• China and Brazil: this Section 301 duty applies in addition to those countries' existing Section 301 tariffs.

• Bangladesh, Cambodia, Indonesia, and Malaysia: eligible for a tariff-rate quota (TRQ) tied to each economy's import of US cotton and textile inputs, allowing a set volume of textiles and apparel to enter free of the Section 301 duty for an initial three-year period once the mechanism is established.

Note: Products subject to certain existing exemptions — including goods already covered by Section 232 tariffs, informational materials, donations, accompanied baggage, and product-specific exemptions listed in the notice's Annexes I and II — may not be subject to this additional duty regardless of country of origin.

A Related but Separate Action: Section 338 Tariffs on Canada

The July 24 Section 301 action is not the only tariff development affecting Canada this summer. On July 20, 2026, the administration separately invoked Section 338 of the Tariff Act of 1930 (19 U.S.C. § 1338) — a provision distinct from Section 301 and Section 122 — to impose an additional 50% tariff on specific categories of Canadian-origin goods, including motor vehicles, alcohol, dairy, and a broader set of non-automotive and non-beverage products.

Section 338 allows the president to impose duties of up to 50% on goods from a country found to be engaging in discriminatory treatment of US commerce, without the formal investigation process required under Section 301 (a USTR investigation) or Section 232 (a national security determination) — a presidential proclamation is sufficient. Unlike Section 122, it carries no statutory expiration date. According to legal research cited in trade press, this is the first significant use of the authority since 1949.

These three proclamations take effect August 19, 2026 (30 days after signing, the minimum notice period under the statute). Notably, goods that would otherwise qualify for preferential treatment under the United States-Mexico-Canada Agreement (USMCA) are not exempted from this additional duty. This action is separate from, and in addition to, Canada's 10% rate under the July 24 Section 301 forced-labor action described above.

Two considerations for compliance teams

Classification remains central to determining actual duty owed. With an exemptions annex in place and Section 232 measures still active for autos, steel, aluminum, and other sectors, the country-level Section 301 rate is only one input into the total duty on a given shipment. Correct HTS classification and awareness of which annex exemptions apply are what determine the accurate duty stack for a specific product.

The framework may continue to evolve. As with the transition from IEEPA to Section 122 to Section 301, trade authority and country-specific arrangements have shifted more than once over the past several months. Some trading-partner arrangements negotiated earlier in the year are still being finalized or revisited. Compliance teams may benefit from building in some flexibility for further updates as implementation details are clarified.

What this means in practice

For import compliance and customs brokerage teams, a practical checklist for this transition includes:

• Re-running duty stack analysis for active HTS codes against the new Section 301/338 rates, replacing the expired Section 122 rate

• Confirming which SKUs fall under the exemptions annex — agricultural goods, aviation parts, industrial inputs, minerals, pharmaceuticals, and Section 232-covered goods carry different treatment

• Monitoring country-of-origin exposure for trading partners whose arrangements are still being finalized

• Keeping records current in case future adjustments require updated filings, similar to the refund process that followed the February IEEPA ruling

Given how frequently the underlying rates and authorities have changed this year, keeping classification and duty data current — with a clear, auditable basis for each determination — is a practical priority for compliance teams navigating this transition.

We'll continue to follow developments in the Section 301 rollout and provide updates as implementation details are clarified.