USTR Finalizes and Imposes 10 to 12.5 Percent Section 301 Forced Labor Duties

Yesterday, the United States Trade Representative (“USTR”) announced it is taking “final action” to impose 10 to 12.5 percent tariffs on products of 60 economies under Section 301 “for their failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor.”  The relevant Federal Register Notice is here.  These tariffs are effective Friday, July 24, 2026, avoiding a gap between the 10 percent Section 122 global tariff, which expired today at 12:01 a.m. ET.  However, goods 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 and entered before 12:01 a.m. ET on July 28 are not subject to the additional duties.

19 economies (see List A below) are subject to the 10 percent tariff rate.  Among them, the European Union and Taiwan are subject to a 10 percent rate net of Most-Favored-Nation (“MFN”) duties: where the applicable MFN rate is less than 10 percent, the Section 301 duty is imposed so that the MFN duty plus Section 301 duty equals 10 percent, and where the MFN rate is 10 percent or higher, the Section 301 duty is zero.

The remaining 41 (see List B below) economies are subject to 12.5 percent tariff.  Among them, Japan, South Korea, and Switzerland are subject to a 12.5 percent rate net of MFN duties:  where the applicable MFN rate is less than 12.5 percent, the Section 301 duty is imposed so that the MFN duty plus Section 301 duty equals 12.5 percent, and where the MFN rate is 12.5 percent or higher, the Section 301 duty is zero.

We specifically note that for Brazil, the 12.5 percent duty rate from this tariff action will stack on top of the 25 percent tariff announced last week, effectively subjecting many products from Brazil to a total of 37.5 percent of additional duties under Section 301. 

This tariff action does not apply to (a) goods that are already subject to Section 232 tariffs, (b) Mexican and Canadian goods that enter duty-free under the United States-Mexico-Canada Agreement (“USMCA”), (c) certain textile and apparel goods of (i) Jordan or (ii) Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, or Nicaragua entered free of duty Under the Dominican Republic-Central America United States Free Trade Agreement (“CAFTA-DR”), or (d) goods entered under the tariff codes listed in Part A, Annex II of the Federal Register Notice (see page 137).  Several countries / economies also received additional country-specific tariff item carveouts as identified in Parts B through O of Annex II, such as the European Union, Malaysia, and Indonesia.

Finally, the USTR is directed to establish tariff-rate quotas (“TRQs”) for cotton and textile imports from Bangladesh, Cambodia, Indonesia, and Malaysia based on their importation of U.S. inputs. The TRQs will initially last for three years.  Textile and cotton goods from these four countries will be subject to 10 percent tariffs until USTR establishes the TRQs.

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List A (10 Percent):

1. Argentina
2. Bangladesh
3. Cambodia
4. Canada
5. Ecuador
6. El Salvador
7. European Union (with MFN treatment)
8. Guatemala
9. Honduras
10. India
11. Indonesia
12. Jordan
13. Malaysia
14. Mexico
15. Pakistan
16. Sri Lanka
17. Taiwan (with MFN treatment)
18. the United Kingdom
19. Trinidad and Tobago

List B (12.5 percent):

1. Algeria
2. Angola
3. Australia
4. Bahrain
5. Brazil
6. Chile
7. China
8. Colombia
9. Costa Rica
10. Egypt
11. Guyana
12. Hong Kong
13. Iraq
14. Israel
15. Japan (with MFN treatment)
16. Kazakhstan
17. Kuwait
18. Libya
19. Morocco
20. New Zealand
21. Nicaragua
22. Nigeria
23. Norway
24. Oman
25. Peru
26. Qatar
27. Russia
28. Saudi Arabia
29. Singapore
30. South Africa
31. South Korea (with MFN treatment)
32. Switzerland (with MFN treatment)
33. Thailand
34. The Bahamas
35. the Dominican Republic
36. the Philippines
37. the United Arab Emirates
38. Türkiye
39. Uruguay
40. Venezuela
41. Vietnam