At 12:01 a.m. ET on July 24, 2026, the U.S. Trade Representative’s office began collecting new tariffs of 10% to 12.5% on products from 60 countries, the final step in a Section 301 investigation into whether those countries adequately police forced labor in their supply chains. The action, confirmed in a USTR press release, layers on top of any existing Section 301 duties those countries’ goods already carry.
What happened
USTR’s investigation started March 12, 2026, at the direction of the President, and covered 60 economies accused of failing to “impose and effectively enforce a prohibition on the importation of goods produced with forced labor.” After public hearings in late April (more than 2,100 comments) and a formal unfair-trade determination on June 2, USTR held a second round of hearings in early July — more than 1,600 written comments and over 100 witnesses — before finalizing the tariff structure this week.
The rates are tiered by how seriously each country enforces its own forced-labor import ban:
- 10% flat: 17 countries with forced-labor import bans already in place or committed via trade agreement, including the UK, India, Mexico, and Canada.
- 10% net-of-MFN: The European Union and Taiwan.
- 12.5% net-of-MFN: Japan, South Korea, and Switzerland.
- 12.5% flat: 38 remaining countries with no forced-labor import prohibition, including China, Brazil, Vietnam, and Russia.
More than 2,100 tariff codes carry exemptions — raw materials unavailable domestically, goods that would disrupt the U.S. economy, USMCA-eligible goods, CAFTA-DR textiles, and humanitarian donations among them. Bangladesh, Cambodia, Indonesia, and Malaysia also got a three-year tariff-rate quota carve-out for textiles and apparel tied to U.S. cotton purchases. Goods already loaded for their final leg of transit before July 24 have until July 28 to enter the country duty-free.
USTR Ambassador Jamieson Greer framed the action bluntly: “decades of moral suasion have not eradicated forced labor from global supply chains,” adding that the U.S. “rigorously enforces” its own import ban and expects trading partners to do the same.
Why it matters
This is a separate, ongoing tariff action — distinct from the Section 122 10% global tariff that expired on its own statutory 150-day clock this same week. Section 301 forced-labor duties carry no built-in expiration date, so businesses that assumed “the tariff expired” after Section 122 lapsed may be caught off guard by this new layer landing at the same time, on top of whatever Section 301 duties were already in place for a given country.
Because the tiers are based on each country’s own labor-enforcement record rather than a blanket rate, two suppliers in the same product category can now face very different landed costs depending on where they’re based — a 10% hit if sourcing from Mexico or the UK, versus 12.5% from China or Vietnam.
What this means for small business owners
If your business imports from any of the 60 named countries, the tariff line on your next shipment invoice just changed — check which tier your supplier’s country falls into before assuming a rate. The exemption list is large (2,100+ tariff codes) and country-specific, so it’s worth having your customs broker or import specialist confirm whether your product is covered before you eat a cost increase you didn’t need to.
For bookkeeping purposes, treat this as a new, separate landed-cost line item distinct from any Section 122 or existing Section 301 duties already baked into your COGS — conflating the two will throw off margin tracking on imported inventory going into Q3.
“Decades of moral suasion have not eradicated forced labor from global supply chains.” — USTR Ambassador Jamieson Greer
The bottom line
The Section 122 tariff’s expiration this week was never the end of new import costs — Section 301’s forced-labor tariffs took its place on the same day, with no expiration clock of their own. Small businesses that import goods should verify their suppliers’ tier now, confirm exemption eligibility with a broker, and update landed-cost calculations before the next shipment clears customs.
