On July 23, 2026, the White House issued a Presidential Memorandum directing the United States Trade Representative (USTR) to impose new Section 301 tariffs on imports from 60 economies that were investigated for failing to impose or effectively enforce prohibitions on the importation of goods produced with forced labor. The new tariffs follow the expiration of the prior 10% Section 122 tariffs on July 23rd, adding a new Section 301-based duty framework for covered imports from the investigated economies.
Scope of the New Tariffs
Unlike prior Section 301 actions that frequently targeted specific tariff classifications or products, the new Forced Labor Import Prohibition (“FLIP”) measures broadly apply to imports from the covered economies unless specifically excluded through annex provisions or other exceptions.
The action establishes three principal tariff treatments:
10% Additional Duty
A 10% Section 301 tariff will apply to imports from certain economies that have implemented a forced labor import prohibition, undertaken commitments through an Agreement on Reciprocal Trade (ART), or otherwise taken corrective action. These economies include, among others:
- Canada
- Mexico
- India
- Indonesia
- Malaysia
- Pakistan
- Sri Lanka
- United Kingdom
- Bangladesh
- Cambodia
- Jordan
- Trinidad and Tobago
12.5% Additional Duty
A 12.5% Section 301 tariff will apply to imports from most remaining investigated economies, including China and numerous other trading partners identified in the investigations.
MFN-Net Tariff Treatment for Certain Economies
For imports from the European Union, Taiwan, Japan, South Korea, and Switzerland, the Presidential Memorandum directs USTR to apply the new section 301 duties net of the product’s normal trade relations (MFN) duty rate, so that the combined MFN duty and Section 301 duty align with the applicable 10% or 12.5% tariff treatment.
Product Exclusions Remain Available
The memorandum also directs USTR to maintain broad product exclusions for categories where tariffs could:
- Create domestic supply shortages;
- Cause economy-wide disruptions;
- Affect products unavailable from the U.S. or alternative sources;
- Be ineffective in addressing the underlying forced labor concerns;
- Encourage compliance efforts by certain trading partners.
Importers should carefully review the applicable annexes and HTSUS implementation guidance to determine whether any products qualify for exclusion treatment.
New Textile and Apparel Incentives
The White House also directed USTR to establish tariff-rate quota (TRQ) programs for Bangladesh, Cambodia, Indonesia, and Malaysia. These programs are intended to encourage the use of U.S. cotton and textile inputs by allowing specified volumes of qualifying textile and apparel products to enter the United States free from the new Section 301 duties.
Until those TRQs are implemented, the standard 10% FLIP tariff rate will apply to covered imports from those countries. TRQs are expected to be rolled out in September.
Important Considerations for Importers
The new FLIP tariffs introduce another layer of trade remedy exposure that importers must evaluate as part of their customs compliance and landed-cost planning. Companies should consider:
- Reviewing country-of-origin determinations across their supply chains;
- Identifying products affected by the new country-wide tariff measures;
- Evaluating the interaction between the FLIP tariffs and existing Section 301, Section 232, and AD/CVD measures;
- Confirming eligibility for free trade agreement treatment, particularly under USMCA where applicable.
For example, USTR's implementation guidance indicates that qualifying USMCA-originating goods from Mexico remain exempt from the new FLIP Section 301 duties.
What Comes Next?
The new tariffs became applicable beginning July 24, 2026, subject to the implementation provisions contained in the USTR notice and corresponding HTSUS modifications.
As companies evaluate the impact of these new measures, supply chain visibility, origin management, and trade remedy planning will become increasingly important components of customs compliance programs.
How Tradewin Can Help
Tradewin assists importers with:
- Section 301 impact assessments
- Country-of-origin reviews
- Tariff mitigation evaluations
- Supply chain mapping
- Customs valuation analysis
- Free trade agreement qualification reviews
- Trade remedy compliance planning
Organizations affected by the new FLIP Section 301 tariffs should review their sourcing footprint and customs processes promptly to assess compliance obligations and potential duty exposure. Contact us today for support.
