Section 301 Forced Labor Tariff (2026): What You Actually Owe, and What You Don't

What Happened on July 24

The US Trade Representative announced the final action on July 23, 2026 and it took effect at 12:01 a.m. Eastern time the next morning. The legal basis is Section 301 of the Trade Act of 1974, and the finding is about labor practice rather than trade balance: USTR investigated whether each of 60 trading partners maintains and effectively enforces a prohibition on importing goods made with forced labor, and concluded that none of them adequately did.

The rate split follows that finding. Economies that already have a forced-labor import prohibition on the books, have committed to implement one through an Agreement on Reciprocal Trade, or maintain a partial regime restricting certain forced-labor goods were assessed at 10%. Every other investigated economy was assessed at 12.5%.

The timing was not a coincidence. The Section 122 balance-of-payments surcharge expired by operation of law at the same moment — Section 122 caps such a surcharge at 150 days absent an act of Congress, and no extension passed. For most importers the practical effect was a handover rather than a new burden, but the two measures are not equivalent, and the difference matters for planning.

The action is already being challenged in court, as the IEEPA tariffs were before it. Treat every rate on this page as current-as-filed and confirm the specific Chapter 99 heading with your broker before you commit to a landed-cost number. Our import duty calculator models this layer alongside Section 232 and the China Section 301 lists.

The Threshold Rule Most Summaries Miss

If you read only the headline you would assume every covered import got 10 or 12.5 points more expensive. For most origins that is true. For five significant ones it is not, and the difference can be several thousand dollars a container.

For the European Union, Japan, South Korea, Switzerland and Taiwan, CBP wrote the Chapter 99 headings as a combined-rate threshold rather than an additive duty. Each of those origins got two headings:

• One that applies when the article's column-1 rate already equals or exceeds the threshold — in which case no additional duty is assessed at all.
• One that applies when the column-1 rate falls below the threshold — in which case the article is assessed a combined column-1 and Section 301 rate equal to the threshold.

The threshold is 10% for the EU and Taiwan and 12.5% for Japan, South Korea and Switzerland. So an EU good at a 6% column-1 rate goes to 10% all-in, not 16%. An EU good already at 12% pays nothing extra. A Japanese good at 3% goes to 12.5% all-in; a Japanese good at 14% is untouched.

One more filing detail worth knowing, because it changes how the numbers appear on your entry summary: CBP set an order of reporting for Chapter 99 lines — Chapter 98 first if applicable, then Section 301, then Section 122, then Section 232, then Section 201 duties and quota. The entered value is reported on the Chapter 1-97 line. If your broker's summary looks unfamiliar since late July, that sequence is why.

Note also that the underlying merchandise processing fee, harbor maintenance fee and brokerage charges are unaffected — this is a duty layer, not a fee change — and antidumping and countervailing duties continue to apply on top wherever they already did.

The Exemptions Cover More Freight Than People Assume

The single most expensive mistake available right now is paying this duty on goods that are exempt from it. The carve-outs are broad, they live in separate Chapter 99 headings, and claiming them is your filer's job — not something CBP applies for you.

Two of those deserve emphasis because they change strategy rather than just arithmetic. The Section 232 carve-out means a steel derivative already paying 25% on full customs value under the restructured 232 program does not also pay the forced-labor duty — a stack a lot of landed-cost spreadsheets got wrong in the first week. And the USMCA exemption is conditional on entering duty-free under the agreement: a Mexican or Canadian good that would qualify but is entered without the claim pays 10% it did not have to pay. If your USMCA documentation is loose, it just got expensive.

For the full origin-by-origin heading list and the HTS attachment, the operative document is CBP's guidance message CSMS #69326983 and the USTR final action Federal Register notice. Do not rely on a summary — including this one — for a classification decision.

The Timing Rule: Why Cargo Already Under Bond Still Pays

This is the part that catches importers who thought they had already sheltered their freight. CBP's guidance applies the duty to merchandise "entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on July 24, 2026."

That second clause is the whole story for anyone using a CBP-bonded warehouse. It restates the ordinary rule that duty on warehoused goods is assessed at the rate in effect on the date of withdrawal, not the date of arrival and not the date of the Type 21 warehouse entry. A container that entered a bonded warehouse in May and comes out in September pays the September rate — which now includes this duty.

There was a grace window and it is gone. Goods loaded onto a vessel and in transit on the final mode before 12:01 a.m. July 24, and entered or withdrawn for consumption before 12:01 a.m. on July 28, were excluded. That was a four-day door. If you are reading this now, it is closed.

For foreign trade zones, CBP went further: any product subject to this duty that is admitted into a zone may only be admitted in privileged foreign status under 19 CFR 146.41, unless it qualifies for domestic status under 19 CFR 146.43. Privileged foreign status fixes the tariff classification and rate at admission, which removes the zone's traditional wait-for-a-better-rate flexibility for covered goods — the same pattern CBP has used on Section 232 merchandise.

The honest conclusion: neither a bonded warehouse nor a zone is a hedge against the rate. Anyone selling you deferral as a way to avoid this duty is misreading the mechanism. What deferral genuinely does is separate the timing of the cash from the timing of the arrival — and preserve the exits described next.

What Deferral Actually Buys You Now

With the rate question settled — you pay it whenever you withdraw — the value of bonded storage against this duty comes down to three specific things, all of which are worth real money at 10-12.5% of cargo value.

• Re-export means the duty is never owed. Goods exported directly from a CBP-bonded warehouse are never entered for consumption, so no duty attaches — not the column-1 rate, not this one. For anyone using the Southeast as a transshipment or regional-distribution point with any meaningful re-export share, this is the largest single lever available. The alternative is paying now and filing drawback — Section 301 duties are generally drawback-eligible, but that is a 6-18 month refund cycle against money you have already sent.
• Partial withdrawals match duty to revenue. A full container cleared on arrival puts the entire duty bill on day one. Withdrawing in lots as you sell converts a lump-sum working-capital hit into a per-shipment cost that lands after the goods do. At 12.5% on a $300,000 container that is $37,500 of cash timing.
• Unwithdrawn goods are still reviewable. With 471 subheadings added to the exemption list after comment, plus the Section 232 carve-out, the USMCA and CAFTA-DR exemptions and the country-specific headings, a meaningful share of covered freight is not actually covered. Goods sitting under bond are goods whose classification you can still get right before the money moves. Goods you cleared on arrival are a protest or a post-summary correction.

The countervailing cost is real and should be in the comparison: bonded storage carries a premium over general commercial warehousing, a Type 21 entry plus per-withdrawal filings cost more than a single Type 01, and up to five years of storage on slow-moving goods can exceed the duty you deferred. The bonded warehouse cost guide works that math; the bonded vs FTZ comparison covers the volume thresholds where a zone wins instead.

When Bonded Storage Is the Wrong Answer to This

Deferral is oversold every time a tariff lands, and this one is no exception. It is not the right response when:

• Your goods are exempt. Check first. A USMCA-qualifying good, a Section 232 article, a civil-aircraft part or something on the 471-subheading list owes nothing — and paying for bonded storage to defer a duty you never owed is a pure loss.
• You are on a threshold origin with a high column-1 rate. EU, Japan, Korea, Switzerland and Taiwan goods already at or above the threshold got no increase at all. Nothing to defer.
• Your inventory turns fast and sells domestically. If the goods clear and ship inside a few weeks, the storage premium and the extra entry filings cost more than the cash-timing benefit. Clear on arrival and move on.
• Your volume justifies a zone. High entry counts, manufacturing, or weekly-entry MPF savings can beat a bonded warehouse outright — though remember covered goods must go in at privileged foreign status.
• The real constraint is duty you will never be able to pay. Deferral is a timing tool, not a solvency tool. Freight parked under bond with no plan still ends at abandonment or a General Order outcome, just later and after storage charges.

Disclosure: C&C Warehouse, featured on this page, is operated by the publisher of WarehousingCosts.com. It is a CBP-bonded and General Order authorized facility minutes from the Port of Charleston. C&C is not a customs broker, does not classify goods, and does not file entries or exemption claims — classification, Chapter 99 heading selection and exemption eligibility are your broker's work and this page is not a substitute for it. What we do is the physical and bonded-storage side of the decision.

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