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Forced labor enforcement action reshapes cost calculations for companies sourcing from overseas suppliers.
A new round of Section 301 tariffs took effect July 24, 2026, imposing additional duties of 10% or 12.5% on imports from 60 economies. The tariffs replaced the temporary Section 122 duties that expired the same day and represent one of the broadest uses of trade remedy law in recent memory, covering an estimated 99.4% of all U.S. imports, according to a fact sheet released by the Office of the U.S. Trade Representative (USTR).
For companies sourcing materials or components from overseas, and particularly manufacturers and importers already managing tariff volatility from earlier this year, this latest action adds another variable to landed cost planning. BDO USA covered the details of the new tariff regime shortly after it took effect in its article, Double-Digit Section 301 Tariffs Hit Imports from 60 Economies. This article builds on that coverage with a closer look at what it means for GBQ clients.
Why Tariffs Were Imposed
The action follows a Section 301 investigation that USTR initiated on March 12, 2026, examining whether 60 trading partners had failed to impose or effectively enforce a ban on importing goods made with forced labor. USTR held government-to-government consultations and public hearings before issuing its final action on July 23, 2026, with the new duties taking effect the following day.
How The Two-Tier Rate Structure Works
USTR sorted the 60 economies into two tiers based on their forced labor enforcement posture. A 10% tariff applies to economies that impose a forced labor import prohibition, have committed to one through an Agreement on Reciprocal Trade, or maintain a partial regime addressing certain forced labor goods. A 12.5% tariff applies to economies that have not yet met those benchmarks. USTR has indicated rates could move lower as economies adopt stronger enforcement, so companies sourcing heavily from a 12.5% country may see relief if that country's policy shifts.
Exemptions Worth Reviewing
Two annexes to the final notice exempt several categories from the additional duty, generally covering raw materials with limited domestic alternatives, goods already subject to Section 232 duties such as steel and aluminum, select agricultural products and humanitarian donations, and informational materials like books and news media. Because eligibility depends on specific Harmonized Tariff Schedule classifications, a product-by-product review against the annexes is worth the time before assuming an exemption applies.
A Narrow Window For Goods Already In Transit
Goods loaded onto a vessel and in transit before July 24 avoid the new duty only if entered into the U.S. before July 28, 2026. Companies with shipments moving through customs around that window should confirm with their broker that qualifying entries were filed on time.
Layering This On Top Of A Volatile Year For Tariffs
This is not the first major shift in trade policy this year. Earlier in 2026, the Supreme Court invalidated a separate set of tariffs imposed under the International Emergency Economic Powers Act, a decision GBQ examined in Supreme Court Strikes Down IEEPA Tariffs: What the Manufacturing Industry Needs to Know. That ruling opened the door to significant refund activity, which GBQ covered in Supreme Court Ruling on IEEPA Tariffs Opens Door to Billions in Importer Refunds and Unlocking IEEPA Tariff Refunds: CBP's CAPE System Is Here. Companies still pursuing refunds from that earlier action should evaluate how the new Section 301 duties affect their overall exposure going forward.
How GBQ Can Help
As a member of the BDO Alliance USA, GBQ has access to a deep bench of customs and international trade specialists who can help navigate the evolving tariff and trade landscape. Our resources can assist with assessing the impact of Section 301 tariffs through detailed duty analyses, identifying potential exemptions and relief opportunities, and advising on in-transit compliance and logistics considerations. Assistance can also be provided to help your organization evaluate long-term sourcing strategies, optimize supply chains, and develop robust forced labor due diligence programs designed to reduce compliance risks and strengthen supply chain resilience in an increasingly complex global trade environment.
If your company sources from any of the affected economies, contact your GBQ advisor to talk through how this action affects your supply chain and what steps make sense now.
Frequently Asked Questions
Do these tariffs stack on top of tariffs already in place?
Yes. These duties apply in addition to existing tariffs, including other Section 301 and Section 232 duties, so the combined rate on some products could be substantial.
Could the 12.5% rate go down?
Possibly. USTR has indicated it may lower rates for economies that adopt or strengthen forced labor import bans.
What if a shipment was already in transit before July 24?
It may qualify for a short exemption window, but it must be entered for consumption before July 28, 2026.
