Executive summary

On 23 July 2026, the Office of the United States Trade Representative (USTR) announced final action in its Section 301 Trade Act of 1974 (Section 301) investigations into the acts, policies and practices of 60 economies related to "their failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor." Effective 12:01 a.m. Eastern Time on Friday, 24 July 2026, additional duties of either 10% or 12.5% apply to most imports from the covered trading partners, subject to specified product exclusions.

The final action follows the USTR's 2 June 2026 determinations and proposed responsive measures. The duties take effect as the temporary 10% tariffs under Section 122 of the Trade Act of 1974 are set to expire, establishing a new Section 301-based tariff framework tied to failure to adopt and/or enforce forced labor import prohibitions.

For more on the initiation of the Section 301 investigations, see EY Global Tax Alert, USTR initiates Section 301 investigations into 60 economies regarding imported goods produced with forced labor; comment period and hearings announced, dated 13 March 2026.

Tariff rates and country coverage

Additional duties are assessed under new Harmonized Tariff Schedule (HTS) subheadings 9903.05.20 through 9903.05.84. A 10% additional ad valorem rate applies to trading partners that have made commitments to adopt, and effectively enforce, forced labor import prohibitions; a 12.5% additional ad valorem rate applies to those that have failed to adopt such a prohibition. Of the 60 covered trading partners, 19 are subject to the 10% rate and 41 to the 12.5% rate. Furthermore, for five partner economies, the additional rate is blended and capped as described below. The following table summarizes the applicable rate by economy:

* Threshold/combined-rate mechanic: For these jurisdictions, the outcome depends on the Column 1 duty already applicable:

• For the European Union and Taiwan, articles with a Column 1 rate equal to or greater than 10% will not be subject to additional duty, while articles with a Column 1 rate below 10% are assessed as a combined Column 1 and Section 301 rate of 10%.
• For Japan, South Korea and Switzerland, articles with a Column 1 rate equal to or greater than 12.5% will not be subject to an additional duty, while articles with a Column 1 rate below 12.5% are assessed a combined Column 1 and Section 301 rate of 12.5%.

The USTR will separately establish three-year tariff-rate quotas (TRQs) for Bangladesh, Cambodia, Indonesia and Malaysia. These quotas aim to encourage the use of US-origin textile inputs and lessen reliance on higher-risk sources more likely to involve forced labor.

Scope of covered merchandise

The tariffs apply to most imports from the covered countries. All headings carry the standard exclusion for products described in HTS 9903.05.85-9903.05.92, and certain countries have additional carve-out headings within the 9903.05.94-9903.06.21 range. The following categories are not covered by the action:

• Informational materials, donations and accompanied baggage
• All articles and parts of articles subject to Section 232 of the Trade Expansion Act of 1962 (Section 232) tariffs
• Certain products, including (1) raw materials that could lead to unavailability of domestic supply if subject to the additional tariffs; (2) products that could cause economy-wide disruptions; (3) products that cannot be grown or produced in sufficient quantities in the United States or obtained from other sources; (4) products for which an exemption would encourage economies to enact and effectively enforce a forced labor import prohibition; and (5) articles for which additional tariffs may not contribute substantially to eliminating the actionable practices

A limited in-transit exception applies to goods that were loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. Eastern Time on 24 July 2026, and that are entered for consumption, or withdrawn from warehouse for consumption, before 12:01 a.m. Eastern Time on 28 July 2026.

A full list of product coverage is set out in the Federal Register notice.

What this means for businesses

The final action converts the June 2026 proposal into an immediately effective tariff program with broad application across global supply chains. The timing minimizes any gap between the expiration of the temporary Section 122 tariffs and implementation of the new Section 301 framework. Notably, articles subject to Section 232 tariffs are excluded, so the new forced labor duties generally will not stack with Section 232 measures. Importers should not assume that all tariff programs are mutually exclusive; other trade remedies and additional duties may continue to apply independently where required under the applicable authorities.

Actions to consider

Businesses, depending on their particular circumstances, should consider the following actions:

• Identify import exposure from the 60 covered trading partners and quantify the potential 10% or 12.5% duty impact by country of origin.
• Review the Federal Register notice and annexes to confirm whether specific products qualify for exclusion treatment.
• Validate tariff classification and country-of-origin determinations for affected merchandise.
• Assess interaction with Section 232 and other Section 301 tariff measures to confirm applicable rates.
• Evaluate alternative sourcing possibilities and eligibility for any textile- or apparel-specific TRQ mechanisms.
• Monitor USTR and US Customs and Border Protection implementation guidance regarding entry requirements, reporting obligations and enforcement.
• Consider customs valuation planning and changes to operating models that may potentially lessen tariff exposure.