Effective 24 July 2026 (12:01 a.m. U.S. Eastern Time), the United States introduced new Section 301 tariffs of either 10% or 12.5% on imports from 60 economies. The measures follow investigations into whether those economies have adequately prohibited the importation of goods produced with forced labour. These tariffs replace the temporary Section 122 tariffs, which expired the same day and establish a new country-specific tariff structure under Section 301 of the Trade Act of 1974. Unlike the previous Section 122 measures, there is no statutory cap on the tariff rates or automatic expiry.

For businesses importing into the United States, this is another layer to consider when assessing the total duty payable on a product. Companies should review how these tariffs interact with existing duties and other trade measures that may already apply. It is also worth noting that two additional Section 301 investigations are still ongoing and could result in further tariff increases.

1. Background: From IEEPA to Section 301

In February 2026, the U.S. Supreme Court held that the Trump Administration’s 2025 “reciprocal” tariffs, imposed under the International Emergency Economic Powers Act (“IEEPA”), exceeded presidential authority. The Administration responded with a temporary 10% global import surcharge under Section 122 of the Trade Act (capped at 15% and limited to 150 days), while the Office of the US Trade Representative (“USTR”) opened a suite of Section 301 investigations in March 2026 designed to rebuild the tariff structure on more durable legal ground.

The forced-labour investigations – 60 in parallel, covering economies responsible for 99.4% of U.S. imports – concluded on 23 July 2026 with a final determination, a presidential memorandum and a Federal Register Notice – Notice of Actions in Section 301 Investigations of Acts, Policies, and Practices of Various Economies Related to the Failure of Each Economy to Impose and Effectively Enforce a Prohibition on the Importation of Goods Produced with Forced Labor [FLIP 301 Investigation Final Action FRN 7-23-26 FINAL.pdf]  (“Notice”) – modifying the Harmonized Tariff Schedule of the United States (“HTSUS”).

Section 301 duties differ from their predecessors in three commercially significant respects: (a) they have no statutory rate ceiling; (b) they have no expiry date (subject to four-yearly reviews); and (c) the statute has repeatedly withstood litigation. Importers should therefore treat the new rates as a structural feature of U.S. market access rather than a negotiating posture.

2. Architecture of the Forced-Labour Section 301 Action

2.1       Three rate tiers

The action applies one of three treatments to each of the 60 economies, calibrated to its conduct during the investigation:

• 10% additional duty for economies that have enacted a forced-labour import prohibition, committed to one under an Agreement on Reciprocal Trade (“ART”), or imposed a partial regime such as Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, and the United Kingdom.
• MFN-capped duty for the European Union and Taiwan whereby the Section 301 duty is set so that the sum of the MFN duty and the Section 301 duty does not exceed 10% (falling to zero where MFN is already 10% or more). For Japan, South Korea and Switzerland, the same mechanic applies with a 12.5% cap.
• 5% additional duty for all other investigated economies, including Singapore, China, Hong Kong, Vietnam, Thailand, the Philippines, Australia and New Zealand.

Cambodia, Guatemala, Honduras, India, Sri Lanka and Trinidad and Tobago each enacted forced-labour import prohibitions between the June 2026 proposed action and the final determination and were moved to the 10% tier as a result. The path from 12.5% to 10% therefore remains open to other economies through domestic forced-labour legislation.

2.2       The exemption architecture

There are two types of exemptions available to the new Section 301 tariffs.

Annex I of the Notice inserts new Chapter 99 headings into the HTSUS (headings 9903.05.20–9903.05.84 which impose the country rates) together with a new U.S. Note 52, which sets out exemptions for:

• goods in transit before 24 July and entered by 28 July;
• informational materials;
• donations;
• accompanied baggage;
• civil aircraft articles;
• articles for use in pharmaceutical applications;
• all articles subject to Section 232 tariffs;
• United States-Mexico-Canada Agreement (“USMCA”)-compliant goods of Canada and Mexico origin; and
• certain Dominican Republic-Central America Free Trade Agreement (“CAFTA-DR”) textiles.

Annex II of the Notice lists product-level exclusions by HTSUS subheading.

Part A (approximately 2,120 subheadings) applies to goods of any investigated economy and covers, among others, tropical agriculture, coffee, tea and spices, critical minerals and ores, the full energy complex, fertilisers, pharmaceutical products, computers and automatic data processing machines, semiconductor manufacturing and test equipment, and selected polymers and metals.

Parts B to O grant additional country-specific exclusion lists to economies that made forced-labour commitments.  In Asia, these include Malaysia, Cambodia, Bangladesh, Taiwan and Indonesia and the exemption covers predominantly agricultural and natural products, tropical timber and oleochemicals.

Please note that many Part A lines carry scope limitations. Roughly 700 chemical subheadings are marked “Pharma”, confining the exclusion to articles for pharmaceutical use. Some 540 machinery and instrument lines are marked “Aircraft”, limiting the exclusion to civil aircraft articles. An industrial chemical that appears on the exclusion list may therefore still be fully dutiable – i.e., the scope-limitation is as important as the subheading itself.

2.3       Textile tariff-rate quotas

For Bangladesh, Cambodia, Indonesia and Malaysia, USTR is directed to establish three-year tariff-rate quotas (“TRQs”) permitting defined volumes of textiles and apparel to enter free of the Section 301 duty.  The TRQ are sized by reference to each economy’s purchases of U.S. textile inputs and cotton. Until the TRQs are established, the 10% country rate applies.

3. Interaction with Other Tariff Measures

The new duties are an overlay, not a replacement. Note 52 makes the interactions explicit, and the drafting rewards close reading:

• MFN duties: the Section 301 duty applies in addition to the ordinary Chapter 1–97 rate. For the EU, Taiwan, Japan, Korea and Switzerland the MFN rate is netted against the cap described above. For all other economies it is stacked.
• Section 232: goods subject to Section 232 national-security tariffs (i.e., steel, aluminium, copper and derivatives, passenger and medium/heavy-duty vehicles and parts, wood products, and semiconductors) are exempt from the new Section 301 duties. The Section 232 rate applies alone (i.e., 50% for steel, aluminium and copper).
• Legacy China Section 301 duties: Goods subject to the new duties remain subject to any additional duty under subchapters III and IV of Chapter 99, which is where the 2018 China List 1–4 duties (7.5% to 100%) reside. The new 12.5% duty therefore stacks on top of the legacy China rates.
• Antidumping and countervailing duties (“AD/CVD”): Note 52 expressly preserves AD/CVD, which apply cumulatively with all of the above.
• Free trade agreements (“FTAs”) and preference programmes: FTA-preferential and General System of Preference (“GSP”)-type treatment reduces only the MFN component. Goods eligible for special tariff treatment remain subject to the new Section 301 duty, except USMCA-compliant goods of Canada and Mexico and the CAFTA-DR textile carve-outs.
• Chapter 98 provisions: goods properly entered under most Chapter 98 provisions are exempt. For repairs, alterations and assembly provisions (HTSUS 9802.00.40/50/60/80), the duty applies only to the value of the foreign processing or assembly.

4. Methodology: Determining the Duty on a Given Import

For any product entering the United States on or after 24 July 2026, we recommend the following sequence:

• Classify the goods to its ten-digit HTSUS subheading

Accurate classification of the products is essential as adjacent subheadings can produce materially different outcomes under Annex II.

• Determine the applicable country of origin

Determine the country of origin under the U.S. non-preferential rules of origin using the substantial-transformation standard which applies to Section 301 duties (as well as Section 232 duties and AD/CVD). Preferential FTA rules of origin are not relevant to whether the Section 301 duty applies, they matter only for claiming a preferential MFN rate and for the specific USMCA and CAFTA-DR exemptions written into Note 52. Origin, not shipment routing, drives the country rate – and minimal processing in a lower-tier country will not confer its origin.

• Check the MFN rate and determine whether any FTA preference applies

Establish the base MFN rate, and any FTA preference for which the good qualifies.

• Check for Section 232 coverage

If the good falls within the headings enumerated in Note 52, the Section 232 rate applies and the new Section 301 rate does not.

• Apply the relevant country tier

Apply the country tier: 10%, 12.5%, or the MFN-capped rate for the EU, Taiwan, Japan, Korea and Switzerland.

• Check for exemptions

Consider whether any of the Note 52 exemptions apply.  This includes checking against product specific exemptions in Annex II Part A of the Notice (also check against the scope-limitation column, in particular “Pharma” and “Aircraft” conditions) as well as any country-specific exemptions in Parts B to O of the Notice.

• Add legacy tariff rates where applicable

For China-origin goods, the applicable 2018-vintage Section 301 rates apply on top of the current Section 301 tariffs.  For all origins, any AD/CVD rates will also apply. The sum of the stacked duty rates must be included when calculating the landed duty burden of goods imported into the U.S.

Illustrations

1. Semiconductor manufacturing equipment (heading 8486) – Singapore vs Malaysia vs Japan. Every 8486 subheading is excluded in Annex II Part A without limitation, and semiconductor articles covered by the Section 232 action (heading 9903.79.01) are separately exempt under Note 52. The result is identical across all three origins: no new Section 301 duty applies, whether the origin sits in the 12.5% tier (Singapore), the 10% tier (Malaysia) or the capped tier (Japan). Where a product carve-out applies, tier differences are irrelevant – any duty exposure arises, if at all, under the Section 232 semiconductor action on its own terms.
2. Oleic acid (3823.12.00) – Malaysia vs Indonesia vs Thailand. The subheading does not appear in Part A, so the general exclusions give no relief. It does, however, appear in both Malaysia’s Part E and Indonesia’s Part L country lists. Therefore, Malaysian- and Indonesian-origin oleic acid enters free of the new Section 301 duty, while Thai-origin oleic acid, Thailand having no country list, bears the full 12.5%. Country-specific carve-outs thus create a 12.5-point differential on an identical product, with obvious consequences for regional oleochemicals sourcing.
3. Rice (heading 1006) – Thailand, Vietnam, Japan and China. Rice takes no exclusion at any level, reflecting U.S. domestic production. Thai and Vietnamese rice each bear MFN + 12.5%. Japanese rice benefits from the cap mechanism – i.e., the Section 301 duty is reduced so that MFN plus Section 301 does not exceed 12.5% in total. Chinese rice bears MFN + 12.5% + the legacy China Section 301 rate (25%) – the heaviest outcome of the four. One product, four origins, four different landed-duty results.

5. Rate Comparison Across Asia Pacific

The table below summarises the position for the principal Asia Pacific economies as of 24 July 2026.

Economy	New Section 301 rate	Country-specific product carve-out (Annex II)	US AD/CVD orders in force (indicative)	Observations
Australia	12.5%	None (Part A only)	Limited – hot-rolled steel flat products (2016); corrosion-resistant steel products (2025)
Bangladesh	10%	Part J (~87 lines)	Limited – cotton shop towels (longstanding order)	Textile/apparel TRQs to be established; 10% applies in the interim
Cambodia	10%	Part F (~157 lines)	Several – e.g., crystalline silicon solar cells/modules, paper shopping bags, mattresses	Enacted forced-labour import prohibition post-consultation; TRQs pending
China	12.5%	None (Part A only)	Extensive – well over 200 orders spanning steel and aluminium products, chemicals, solar, furniture, tyres, paper, seafood and many other categories	Legacy Section 301 List duties also stack – see note below. Four-year review pending; truce expires Nov 2026
Hong Kong	12.5%	None (Part A only)	None in force at present	Treated as a separate economy from mainland China
India	10%	None (Part A only)	Numerous – 50+ orders, e.g., steel pipe and tube, frozen shrimp, quartz surface products, various chemicals	Moved to the 10% tier after enacting forced-labour import prohibition
Indonesia	10%	Part L (~148 lines, incl. palm oil derivatives and oleochemicals)	Several – e.g., biodiesel, common alloy aluminium sheet, polyethylene retail carrier bags, mattresses	Textile/apparel TRQs to be established; 10% applies in the interim
Japan	12.5% net of MFN (capped)	None (Part A only)	Numerous – predominantly steel (e.g., hot-rolled, cold-rolled and corrosion-resistant flat products) and certain chemicals	301 duty reduced so that MFN + 301 does not exceed 12.5%; if MFN is higher than 12.5%, MFN applies
Malaysia	10%	Part E (~104 lines, incl. palm oil and oleochemicals)	Several – e.g., crystalline silicon solar cells/modules, stainless steel butt-weld pipe fittings, polyethylene retail carrier bags, paper shopping bags	Textile/apparel TRQs to be established; 10% applies in the interim
New Zealand	12.5%	None (Part A only)	None in force at present
Philippines	12.5%	None (Part A only)	Limited – stainless steel butt-weld pipe fittings (longstanding order)
Singapore	12.5%	None (Part A only)	None in force at present
South Korea	12.5% net of MFN (capped)	None	Numerous – 30+ orders, predominantly steel (e.g., corrosion-resistant and cold-rolled products) and certain chemicals	301 duty reduced so that MFN + 301 does not exceed 12.5%; if MFN is higher than 12.5%, MFN applies
Sri Lanka	10%	None	Limited – paper file folders (AD, 2025); certain new pneumatic off-the-road tyres (CVD, 2017)	Moved to the 10% tier after enacting forced-labour import prohibition
Taiwan	10% net of MFN (capped)	Part K (~118 lines)	Numerous – 20+ orders, e.g., corrosion-resistant and cold-rolled steel, solar cells, common alloy aluminium sheet, acrylate/methacrylate monomers (2026)	ART commitment recognised; 301 duty reduced so that MFN + 301 does not exceed 10%; if MFN is higher than 10%, MFN applies
Thailand	12.5%	None (Part A only)	Several – e.g., crystalline silicon solar cells/modules, circular welded steel pipe, citric acid, rubber bands
Vietnam	12.5%	None (Part A only)	Numerous – 25+ orders, e.g., solar cells/modules, corrosion-resistant steel (2025), thermoformed moulded fibre products (2026), frozen shrimp, frozen fish fillets, honey, passenger tyres, mattresses

China legacy Section 301 rates

In addition to the new 12.5% Section 301 duty, China-origin goods remain subject to the 2018-vintage Section 301 actions, whose principal rates by product category are:

• Lists 1, 2 and 3 (industrial machinery and components, electronics, chemicals and plastics, and a broad range of intermediate and consumer goods) at 25%;
• List 4A (apparel, footwear and certain consumer electronics) at 7.5%; and
• Following the 2024 four-year review, targeted increases including electric vehicles (100%), syringes and needles (100%), semiconductors (50%), solar cells (50%), lithium-ion EV batteries, certain critical minerals, ship-to-shore cranes and certain steel and aluminium products (25%), and certain medical products (e.g., gloves, respirators) (25% or higher on a staged basis).

The applicable legacy rate is line-specific and must be confirmed against the HTSUS Chapter 99 subchapter III notes for the ten-digit code in question.

6. Key Developments to Watch

6.1       The excess-capacity Section 301 investigation

Initiated on 11 March 2026 alongside the forced-labour probes, this investigation targets sixteen economies: China, the EU, Mexico, Japan, India, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan and Bangladesh.  The investigation is for alleged structural overcapacity, with flagged sectors including chemicals, semiconductors, electronics, machinery, steel, batteries, solar and shipbuilding.

Findings and proposed remedies are expected imminently. As it is sector-focused, any resulting duties are likely to be product-targeted and could stack on top of the forced-labour rates. For Singapore-based manufacturers, particularly in chemicals, this remains the larger exposure.

6.2       The Vietnam intellectual property investigation

On 29 May 2026, USTR opened a further Section 301 investigation into Vietnam’s intellectual property protection and enforcement. An adverse determination would add a third layer of Vietnam-specific duties, relevant to any China-plus-one manufacturing footprint.

6.3       Other upcoming developments

Other developments to keep a look out for include: China four-year review: the 2018-vintage China Section 301 actions passed their second four-year anniversaries in mid-2026.  The statutory review could modify the legacy List rates in either direction.

• S.–China truce: the current arrangement runs to November 2026. Its expiry may prompt further China-specific action, including under the proposed U.S.–China Board of Trade framework.
• Bilateral carve-outs: the Trump Administration has indicated it is negotiating product carve-outs with trading partners for goods critical to the U.S. economy, and the tier structure rewards enactment of forced-labour import prohibitions. There may be further revisions to the applicable tiered rates as more bilateral agreements are finalised.
• Exclusion and modification requests: while the comment period has closed, Section 307 modification remains available, and the Note 52 exemption categories (inadequate domestic availability, economy-wide disruption) provide the analytical template for any request.

7. Implications for Businesses

For businesses with U.S.-bound supply chains, we recommend four immediate workstreams:

1. Assess the impact. Map U.S.-bound product lines by ten-digit HTSUS code and non-preferential origin against the methodology in section 4 above and quantify the landed-cost impact against current contract terms, with particular attention to DDP commitments priced against the expired Section 122 rate.
2. Consider duty-mitigation strategies. As the Section 301 duty is ad valorem on customs value, established valuation and entry structures can reduce the burden lawfully. These include (a) the first-sale rule (declaring the price in the first sale of a multi-tiered transaction as the customs value); (b) non-resident importer-of-record structures; (c) unbundling of non-dutiable elements from the invoice price (e.g., certain royalties, post-importation services); (d) duty drawback on re-exports (available for Section 301, unlike Section 232 duties); and (e) foreign-trade-zone or bonded strategies for goods pending re-export. Each strategy requires careful structuring and documentation to withstand scrutiny by the U.S. Customs and Border Protection (“CBP”).
3. Engage with your government and industry association. The tier structure and the country-specific carve-out lists were shaped by government commitments, and the Trump Administration has indicated that bilateral discussions on product carve-outs for goods critical to the U.S. economy are ongoing. Businesses should ascertain from their home governments and relevant industry associations whether products of importance to them are within the scope of any such discussions, and make their interests known while the lists remain in negotiation.
4. Strengthen origin compliance across the supply chain. The steep differentials created by the tiers – and by the China legacy stack – sharply increase the incentive for, and enforcement focus on, illegal transshipment and origin fraud. Businesses should verify that their own origin determinations rest on genuine substantial transformation and extend that discipline to their suppliers by requiring supplier declarations and audit rights, traceability of key inputs (particularly Chinese-origin inputs processed in Southeast Asia), and readiness for CBP requests for information and Enforce and Protect Act allegations.

8. How We Can Assist

Taxise Asia advises multinational and regional clients on US and Asia Pacific trade measures, including tariff classification and origin analysis, supply chain and siting reviews in light of the tiered Section 301 structure, exclusion and modification strategies, and representations in the pending excess-capacity proceedings. Please contact your usual Taxise Asia adviser to discuss the implications for your business.

This alert is provided for general information only and does not constitute legal advice. Duty outcomes depend on precise tariff classification, origin and entry facts, which should be confirmed on a product-specific basis.

Contact Us 
Eugene Lim
Founding Principal
T +65 6304 7972
eugene.lim@TaxiseAsia.com