Section 301 Forced Labor Tariffs on 60 Economies, Effective July 24 (CBP Guidance Available)

Published July 23, 2026

Key Points

• On March 12, 2026, USTR initiated Section 301(b) investigations into 60 trading partners for failing to enforce bans on goods produced with forced labor.
• On June 2, 2026, USTR determined all 60 economies’ practices are actionable under Section 301(b)(1).
• On July 23, 2026, the President directed tariffs of 10 to 12.5 percent on goods from all 60 economies, effective July 24, 2026.
• Canada’s rate is 10 percent, with an exemption for goods entered duty-free under USMCA.
• General exemptions cover in-transit goods, civil aircraft, pharmaceuticals, aluminum/steel/copper, vehicles, wood products, semiconductors, humanitarian donations, and informational materials.
• CBP issued entry filing guidance on July 23, 2026, with the full HTSUS Chapter 99 breakdown, exemptions, and reporting order.

A​​​​​​​​​​​fter concluding Section 301 investigations into 60 economies, the President directed the United States Trade Representative (USTR) to impose tariffs of 10 to 12.5 %. Rates are set by each economy’s enforcement status and trade commitments. Canada’s rate is 10%, with an exemption for goods entered duty-free under USMCA. CBP issued entry filing guidance on July 23, covering the HTSUS numbers, exemptions, and reporting order needed at entry. According to the guidance, the tariffs are effective 12:01 a.m. ET on July 24, 2026. The attached Section 301 Forced Labor HTS List provides the specific tariff classifications covered under each exemption.

​​​​​​​​​​​​​​​60 Economies Covered

On March 12, 2026, the USTR has initiated Section 301(b) investigations into 60 economies to determine whether failures to ban or enforce prohibitions on goods produced with forced labor are unreasonable, discriminatory, or burden U.S. commerce. The economies under review were:

​​​​​​​​​​​​​​​Tariffs Take Effect July 24, 2026

On July 23, 2026, the President directed USTR to impose Section 301 tariffs on goods from all 60 economies, effective 12:01 a.m. ET on July 24, 2026. The presidential memorandum’s Annex modifies the HTSUS to implement these tariffs and their exemptions.

Tariff Rates

10 percent: Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, the United Kingdom, and Trinidad and Tobago. These economies either have forced labor import prohibitions, commitments under reciprocal trade agreements, a partial enforcement regime, or were moved into the 10 percent tier after adopting new prohibitions or commitments following the June 2026 determination.

MFN-net rate: For the European Union and Taiwan, the combined Most-Favored Nation (MFN) and Section 301 tariff totals 10 percent. For Japan, South Korea, and Switzerland, the combined total is 12.5 percent. No additional Section 301 tariff applies if the MFN rate already meets or exceeds those thresholds.

12.5 percent: All other economies on the list.

Product Exemptions

Not every product will be subject to the new tariffs. The White House directed USTR to provide exclusions for certain products, nations, and accommodated free trade agreements. Notable exemptions include:

• Goods eligible for USMCA treatment
• Goods eligible for CAFTA treatment
• Good assessed additional duty under Section 232
• Goods previously assessed additional duties under semiconductors, automotive, metals, or lumber Section 232 duties.
• HTSUS and nation-specific commodity exemptions
• Goods in transit before 12:01 am eastern time om July 24^nd that are entered for consumption or withdrawn from warehouse for consumption, before 12:01 eastern time July 28^th, 2026.
• Goods that are determined to be “critical raw materials”

Importers should carefully review the Annex and implementation guidance to determine whether their products qualify for exclusion.

Tariff-Rate Quotas (Impact on Textile and Apparel Imports)

USTR is directed to establish TRQs for Bangladesh, Cambodia, Indonesia, and Malaysia on textiles, apparel, and cotton, targeted for September 1, 2026, to encourage sourcing of U.S. inputs. Until then, the standard 10 percent tariff applies to goods that will eventually fall under quota.

​​​​​​​​​​​​​​​CBP Filing Guidance

CBP published entry guidance on July 23, 2026, covering entries filed for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. ET that day.

HTSUS numbers: Each economy has its own Chapter 99 heading under 9903.05.20 through 9903.05.84, carrying the applicable rate. Canada’s heading is 9903.05.29.

General exemptions (all economies), headings 9903.05.85–9903.05.92:

• Goods already loaded onto a vessel and in transit before 12:01 a.m. ET July 24, 2026, entered for consumption before 12:01 a.m. ET July 28, 2026
• Civil aircraft, engines, parts, and flight simulators
• Pharmaceutical-use articles
• Aluminum, steel, and copper articles and derivatives; passenger vehicles and light trucks and their parts; medium- and heavy-duty vehicles and their parts; wood products; semiconductor articles
• Donated goods for humanitarian relief (food, clothing, medicine)
• Informational materials (publications, film, artwork, and similar media)

Canada-specific exemption: Heading 9903.05.93 exempts Canadian goods entered duty-free under USMCA from the additional duty under 9903.05.29, including chapter 98 subchapter XXIII and chapter 99 subchapter XXII treatment, regardless of the “S or S+” special rate column.

Other economy-specific exemptions: Argentina, Bangladesh, Cambodia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, European Union member states, Guatemala, Honduras, Indonesia, Jordan, Malaysia, Mexico, Nicaragua, Switzerland, Taiwan, and the United Kingdom have additional exemption headings under specific provisions of U.S. Note 52.

Foreign trade zones: Goods subject to these duties admitted into a U.S. foreign trade zone must be admitted under “privileged foreign status,” unless already eligible for domestic status.

HTSUS reporting order: On entry summary lines involving multiple chapter 98/99 provisions, report in this order: Chapter 98, then Chapter 99 additional duties, then trade remedy headings (Section 301, Section 122, Section 232, Section 201 duties, Section 201 quota), then replacement duty headings, then other quota headings, then the Chapter 1-97 commodity classification. Entered value is reported on the Chapter 1-97 line unless Chapter 98 requires otherwise.

For the complete list of HTSUS classifications covered under each exemption heading, check out the attached Forced Labor HTS List.

What Importers Should Do Now

We recommend that importers:

• Review suppliers and country-of-origin information.
• Identify products sourced from the affected economies.
• Review the Annex list for applicability of possible tariff classification or nation-specific exemptions
• Evaluate the potential duty impact on upcoming shipments.

We will continue monitoring US Trade Representative and White House Proclamation announcements and will provide additional updates as implementation details become available.

GHY USA is updating its processes to meet new reporting requirements and ensure accurate duty calculations and compliance. Any additional duties and related processing fees will appear on future GHY USA invoices.

​​​​​​​​​​​​​​​Background

On March 12, 2026, the United States Trade Representative (USTR) launched Section 301 investigations into 60 economies to assess whether governments have failed to ban imports made with forced labor. The action addressed concerns that inadequate enforcement gives foreign producers an artificial cost advantage, affecting U.S. workers and businesses. USTR determined on June 2, 2026 that all 60 economies’ practices were actionable under Section 301(b)(1), which led to the July 23 tariff memorandum and the CBP guidance now in effect.

How GHY Can Help?

GHY specializes in helping businesses navigate and reduce the impacts of tariffs through strategic solutions tailored to their needs. Our experts can audit your supply chain to identify inefficiencies, uncover cost-saving opportunities, and ensure compliance with evolving trade regulations. We also employ tariff engineering techniques to optimize product classification and sourcing strategies, minimizing duty exposure and maximizing profitability.

By partnering with GHY, your business gains access to the tools and expertise needed to streamline operations and stay competitive in a challenging trade environment.

Contact Us Today! Booking a Meeting, email consult@ghy.com, or call +1 (800) 667-0771.