Section 301 Forced Labor Tariffs: Post-Effective Country Tier Breakdown (July 24 2026)
Section 301 forced labor duties took effect at 12:01 AM ET July 24 2026. Here is the confirmed three-tier country structure (17 flat 10 percent, 38 flat 12.5 percent including China, 5 variable), the in-transit grace period mechanics that closed 12:01 AM ET July 28, and the operational implications by origin.
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Open calculatorSection 301 Forced Labor Tariffs: Post-Effective Country Tier Breakdown (July 24 2026)
The USTR Section 301 forced-labor tariff regime became effective at 12:01 AM Eastern Time on July 24 2026, the same instant Section 122 expired. The in-transit grace period closed 12:01 AM ET July 28 2026. Every entry filed from that moment forward is priced against the new tier structure.
This post-effective breakdown replaces the June 2 proposal analysis. Country assignments are now final, exemptions are locked in, and the Chapter 99 codification is the operative source.
The three-tier structure
USTR moved from the June 2 proposal's two-tier framework (10 percent and 12.5 percent) to a three-tier structure in the final action.
Tier 1: 17 economies at a flat 10 percent. Codified in HTSUS Chapter 99 subheadings 9903.05.20 through 9903.05.36. These economies either operate a domestic forced-labor import prohibition, have a reciprocal trade agreement carrying an enforceable forced-labor clause, or run a partial regime that USTR credits.
Tier 2: 38 economies at a flat 12.5 percent. Codified in 9903.05.37 through 9903.06.14. This is the largest group and includes China, India, Vietnam, Indonesia, Bangladesh, Thailand, the Philippines, and other major manufacturing origins. Together with Tier 3 this tier accounts for the bulk of the covered import value.
Tier 3: 5 economies with variable structure. Codified in 9903.06.15 through 9903.06.19. USTR set an initial rate but reserved authority to adjust downward on evidence of ratchet-up enforcement. The reviewable structure gives these economies a compliance runway that the flat tiers do not.
What changed between the proposal and the final action
Three material shifts from the June 2 proposal:
- Structural expansion from two tiers to three. The variable Tier 3 is new and reflects lobbying and comment-cycle input.
- Country reassignments. A small number of Tier 2 countries in the June draft moved down to Tier 1 based on evidence of newly enacted forced-labor legislation. The reverse also happened for a couple of Tier 1 candidates.
- The 471-subheading exemption annex. The final action carved out 471 HTSUS subheadings, mostly for raw materials, industrial inputs USTR classified as supply-chain-critical, and products where domestic production is either zero or too small to meet demand. This is broader than the Annex A categories in the proposal.
Exemptions at the entry level
Regardless of origin tier, the following are exempt:
- USMCA-qualifying imports from Canada and Mexico (chapter 99 exemption line).
- CAFTA-DR textiles and apparel meeting yarn-forward rules.
- Goods already covered by Section 232 (steel, aluminum, copper, and derivatives; autos and auto parts; semiconductors; wood products; medium and heavy-duty vehicles). This is critical: it prevents stacking of 232 and 301 forced-labor on the same line.
- Civil aircraft and civil aircraft parts.
- Pharmaceutical goods (as scheduled in the exemption annex).
- Informational materials protected under Section 1702(b) of Title 50.
- Donations, personal-use accompanied baggage.
Duty stack examples by origin
China origin: HTSUS 8517.62 smart-home device, 100k USD CIF
| Layer | Rate | Amount (USD) |
|---|---|---|
| MFN | 0% | 0 |
| Section 301 List 4A (existing) | 7.5% | 7,500 |
| Section 301 forced labor (Tier 2) | 12.5% | 12,500 |
| MPF (capped) | 0.3464% | 346.40 |
| HMF | 0.125% | 125 |
| Total | 20,471.40 |
Compare pre-July 24 (with Section 122 at 10 percent): 30,471.40 USD. Net reduction post-sunset: 10,000 USD on 100k CIF, offset by the new forced-labor layer.
India origin: HTSUS 8479.89 industrial machinery, 100k USD CIF
| Layer | Rate | Amount (USD) |
|---|---|---|
| MFN | 0% | 0 |
| Section 301 forced labor (Tier 2) | 12.5% | 12,500 |
| MPF (capped) | 0.3464% | 346.40 |
| HMF | 0.125% | 125 |
| Total | 12,971.40 |
India shipments now sit only 500 USD below their pre-sunset stack (which was 12,500 forced labor equivalent baked into Section 122 layer). The reshoring arbitrage from China to India is partially clawed back.
Vietnam origin: HTSUS 6203.42 mens cotton trousers, 100k USD CIF
| Layer | Rate | Amount (USD) |
|---|---|---|
| MFN | 16.6% | 16,600 |
| Section 301 forced labor (Tier 2) | 12.5% | 12,500 |
| MPF (capped) | 0.3464% | 346.40 |
| HMF | 0.125% | 125 |
| Total | 29,571.40 |
Vietnam apparel sees a net increase of 2,500 USD versus pre-sunset (where Section 122 at 10 percent added 10,000). The 12.5 percent forced-labor layer more than replaces the 10 percent Section 122 layer.
Tier 1 origin: 100k USD CIF industrial goods
At 10 percent flat, Tier 1 origins pay 10,000 USD in forced-labor duty on the new layer. Roughly matches the departing Section 122 layer, so the net landed cost change is near zero.
The in-transit grace period post-mortem
The grace window closed 12:01 AM ET July 28 2026. The rule was strict: laden on the final mode of transit before 12:01 AM ET July 24 AND entered for consumption before 12:01 AM ET July 28. Both conditions required. Physical arrival was not the operative test; the entry date was.
For entries filed at LAX, Long Beach, or NY-NJ within a few minutes of the cutoff, the ACE timestamp is the definitive determinant. Manual retrieval of the entry filing timestamp from the entry summary is the audit trail if any dispute surfaces on the 7501.
What to do this week
- Pull entry summaries filed July 24 through July 27 and confirm the forced-labor line is not present on grace-eligible shipments.
- Verify Chapter 99 heading assignment matches origin tier on the first post-cutoff entries. Broker error at cutover is the highest-frequency issue in a rate-change event.
- Check the 471-subheading exemption annex against your HS lines before September 30 2026. Any exemption that lands on your top-10 HS codes is worth a formal PSC if broker filed the layer defensively.
- Model Q4 2026 landed cost with the new layer locked in. Financial forecasting that still shows the Section 122 line item is stale by Aug 1.
- Consider USMCA re-qualification for lines that used to flow through non-preferred pathways. A 12.5 percent Tier 2 layer on a China-origin good makes even a marginal Mexico-origin substitution more attractive than under the old Section 122 regime.
Citations
- USTR final action Federal Register notice July 24 2026: https://ustr.gov/about/policy-offices/press-office/press-releases/2026/july/ustr-final-action-section-301-forced-labor
- CBP CSMS 69326983 (entry filing instructions): https://content.govdelivery.com/accounts/USDHSCBP/bulletins/csms/69326983
- HTSUS Chapter 99 headings 9903.05.20 through 9903.06.19: https://hts.usitc.gov/reststop/exportList?from=9903.05.20&to=9903.06.21&format=JSON
- Baker McKenzie analysis: https://globalimportblog.bakermckenzie.com/2026/07/24/united-states-new-10-to-12-5-section-301-forced-labor-tariffs-on-over-60-countries-take-effect-july-24-2026-replacing-current-10-section-122-duties/
- Troutman Pepper Locke analysis: https://www.troutman.com/insights/forced-labor-meet-section-301-new-tariffs-target-60-of-americas-biggest-trading-partners/
Frequently asked questions
How many countries are actually covered?
60 economies covering roughly 99.4 percent of US imports by dollar value. The final USTR notice split those 60 into three enforcement tiers: 17 at a flat 10 percent, 38 (including China) at a flat 12.5 percent, and 5 with a variable structure that tracks a country-specific compliance index.
Which countries fell into the 10 percent tier?
17 economies that operate a domestic forced-labor import prohibition, have a reciprocal trade agreement carrying an enforceable forced-labor clause, or have implemented a partial regime that USTR credits. The list is codified in Chapter 99 heading 9903.05.20 through 9903.05.36 of the HTSUS.
Which countries face the 12.5 percent tier?
38 economies including China, India, Vietnam, Indonesia, Bangladesh, Thailand, and most other major manufacturing origins that USTR found did not adopt or effectively enforce a forced-labor import ban. Chapter 99 headings 9903.05.37 through 9903.06.14 codify the list.
What is the variable tier?
5 economies where USTR set an initial rate but reserved authority to adjust the rate downward if the country demonstrates ratchet-up enforcement within a defined review window. Chapter 99 headings 9903.06.15 through 9903.06.19.
Did the in-transit grace period actually save any shipments?
Yes. Goods laden on the final mode of transit before 12:01 AM ET July 24 2026 AND entered for consumption or withdrawn from warehouse before 12:01 AM ET July 28 2026 avoided the new layer. Every entry filed 12:01 AM ET July 28 or later pays the full 10 or 12.5 percent, no exceptions on grace timing.
What are the entry-level exemptions?
USMCA-qualifying imports from Canada and Mexico, CAFTA-DR textiles and apparel, goods already covered by Section 232 (steel, aluminum, copper derivatives, autos, semiconductors, wood products), civil aircraft and parts, pharmaceuticals, informational materials, and donations. The 471-HTSUS-subheading exemption annex adds a further layer, mostly on raw materials, critical inputs, and domestic-shortage products.
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