Section 301 Forced Labor Tariffs: Rates, Exemptions and Stacking

Since 12:01 a.m. eastern time on July 24, 2026, goods that are products of 60 economies pay an additional Section 301 duty of 10% or 12.5% on top of the column 1 rate, unless an exemption heading applies. USTR imposed the action in a notice published on July 28, 2026 at 91 FR 47318. It had found on June 2, 2026 that 54 economies failed to impose and effectively enforce a prohibition on imports made with forced labor and 6 (Canada, Ecuador, the European Union, Indonesia, Mexico and Pakistan) failed to enforce one effectively.

The section 301 forced labor tariffs are not one rate. They are 65 Chapter 99 country headings, a combined-duty cap for five economies, a block of exemption headings from 9903.05.85 to 9903.06.21, and a stacking rule that reads cumulatively against most other additional duties. What follows covers the rates by economy, the cap mechanism, the exemptions that actually work, how the duty interacts with the legacy China lists, AD/CVD and Section 338, and the separate excess-capacity investigation still pending. Rates checked against the Federal Register and HTS Revision 19 as of September 23, 2026.

What the Forced Labor Action Covers and When It Started

The action rests on two dockets, USTR-2026-0265 and USTR-2026-0266. USTR initiated the investigations on March 12, 2026 (91 FR 12884), published actionability determinations and a proposed action on June 5, 2026 (91 FR 34272), received more than 1,600 comments and heard over 100 witnesses on July 7 to 9. A Presidential Memorandum of July 23, 2026 then directed the rates and the exemptions, and the duty took effect the next day.

Legally, the duty lives in a new U.S. note 52 to subchapter III of Chapter 99, with country headings 9903.05.20 to 9903.05.84 and exemption headings 9903.05.85 to 9903.06.21. The duty attaches to products of the listed economies, so the working question for every line is the same one that drives any country of origin determination, not where the goods were shipped from.

The duty applies to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. ET on July 24, 2026. The in-transit relief under 9903.05.85 is narrow: goods must have been loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. ET on July 24, and entered or withdrawn before 12:01 a.m. ET on July 28, 2026. The text speaks only of a vessel, and none of the published guidance addresses air or land shipments, so do not assume they qualify. CBP set out the filing instructions in CSMS #69326983 on July 23, 2026.

Rates by Economy and the Chapter 99 Headings to Declare

Economies fall into four groups. Seventeen pay a flat additional 10%, thirty-eight pay a flat additional 12.5%, and five (the EU, Japan, South Korea, Switzerland and Taiwan) pay whatever tops the column 1 rate up to a fixed total. According to the notice, the 10% tier is for economies that have a forced-labor import ban, committed to one in an Agreement on Reciprocal Trade, or run a partial regime. Cambodia, Guatemala, Honduras, India, Sri Lanka and Trinidad and Tobago adopted bans, and Jordan made an Agreement on Reciprocal Trade commitment, after the June proposal.

The table lists each economy with the last two digits of its 9903.05 heading. The heading is declared alongside the Chapter 1 to 97 classification, which still carries the entered value, so a classification error flows straight into the wrong Chapter 99 treatment for the five capped economies.

The Combined-Duty Cap for the EU, Japan, Korea, Switzerland and Taiwan

The Presidential Memorandum sets the rule in plain terms. For a product of the EU or Taiwan whose MFN tariff is below 10%, the Section 301 tariff is whatever makes the sum of the two equal 10%; where the MFN tariff is 10% or more, the Section 301 tariff is zero. Japan, Korea and Switzerland work the same way with a 12.5% ceiling. USTR describes the cap as consistent with the Agreements on Reciprocal Trade or similar arrangements with those partners.

Expressed as a formula, the Section 301 rate equals the cap minus the column 1 rate, never below zero, and the total duty equals the higher of the column 1 rate and the cap. A German good with a 2.5% MFN rate is declared under 9903.05.39 and pays 7.5% under Section 301, 10% in total. A Japanese good that is duty-free at column 1 pays the full 12.5%. A Swiss good with a 15% MFN rate goes under 9903.05.73 and pays no Section 301 duty at all, so its total stays at 15%. CBP confirmed the at-or-above and below split in CSMS #69326983.

Specific and compound rates need an extra step. Note 52(k) converts the column 1 duty into an ad valorem equivalent by dividing the duty payable by the customs value. The note’s own example is 50 cents per kilogram on 1 kilogram valued at $10, which is a 5% ad valorem equivalent; for an EU good that leaves a 5% Section 301 duty to reach the 10% total.

One point is open: note 52(k) adds a column 1-Special clause for South Korea only, and CBP has not said how KORUS-qualifying goods are measured against the cap. Get written confirmation before settling on a filing position.

Exemptions: USMCA, CAFTA-DR Textiles, Section 232 Goods and Chapter 98

Free trade agreements do not exempt goods by default. Note 52(a) keeps goods eligible for special tariff treatment under general note 3(c)(i) subject to the duty except as the note provides otherwise, so preference claims for Australia, Chile, Colombia, Peru or Korea reduce the column 1 duty but do not remove the forced labor duty. Only two agreement-based carve-outs exist.

USMCA is the first. Products of Canada entered free of duty under USMCA go under 9903.05.93 and products of Mexico under 9903.05.94, regardless of whether the S or S+ indicator appears. Non-qualifying Canadian and Mexican goods pay the 10%. The exemption therefore turns on a valid preference claim, which is a USMCA rules of origin question answered at the bill-of-materials level. CAFTA-DR is the second, and it is limited to textile and apparel goods of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua entered free under the agreement (9903.05.95). El Salvador and Guatemala also have their own textile headings, and CBP allows a good that qualifies under more than one exemption to be entered under either. Non-originating apparel from those countries pays the full rate.

Section 232 goods are exempt through 9903.05.90. The list covers articles of aluminum, steel and copper and the derivative articles in 9903.82.02 and 9903.82.04 to .26, passenger vehicles and light trucks and their parts, wood products, medium and heavy-duty vehicles and buses and their parts, semiconductor articles under 9903.79.01, and, from July 31, 2026, patented pharmaceutical articles in 9903.04.60 to .66. A covered steel derivative therefore pays its sectoral rate under the steel and aluminum tariffs and not the forced labor rate on top.

Chapter 98 entries are exempt when properly claimed and accepted by CBP, with one important exception. Goods entered under 9802.00.40, 9802.00.50, 9802.00.60 or 9802.00.80 remain subject: the first three pay on the value of the repairs, alterations or processing performed abroad, and 9802.00.80 pays on the value of the assembled article less the cost or value of the US-origin components.

• 9903.05.85: in-transit goods meeting the July 24 loading and July 28 entry deadlines.
• 9903.05.86 and .87: a general list of HTS provisions plus 16 named articles, such as sowing seeds, açaí products and certain eucalyptus plywood.
• 9903.05.88 and .89: civil aircraft and parts meeting general note 6, and articles for use in pharmaceutical applications in listed provisions.
• 9903.05.91 and .92: humanitarian donations and informational materials. Personal-use goods in accompanied baggage are also outside the duty.
• 9903.05.96 to 9903.06.21: country-specific lists for the UK, EU, Switzerland, Malaysia, Cambodia, Guatemala, El Salvador, Argentina, Bangladesh, Taiwan, Indonesia, Ecuador and Jordan. Check the tariff line against Annex II of the notice before filing.

How the Duty Stacks With China 301, AD/CVD and Section 338

Note 52(a) states that, except as provided in its own subdivisions, products subject to headings 9903.05.20 to 9903.05.84 are also subject to any additional duty provided for in subchapter III or subchapter IV of Chapter 99. That wording is the basis for every stacking question, and apart from AD/CVD, CBP has not yet published guidance on the specific combinations below.

Antidumping and countervailing duties stack without ambiguity. The note says covered products continue to be subject to antidumping, countervailing or other duties, taxes, fees, exactions and charges. A product inside an order pays the forced labor duty and its antidumping and countervailing duties as separate layers.

The legacy China lists sit in subchapter III as well, so on the note’s wording a Chinese good on Lists 1 to 4A would carry the 12.5% under 9903.05.31 in addition to its existing Section 301 tariffs. Brazil faces the same question, because a separate Brazil Section 301 action at 9903.05.01 (91 FR 45516, July 20, 2026) runs alongside the 12.5% under 9903.05.27. Section 338 on Canada, which added 50% under 9903.03.12 to .14 from 12:01 a.m. ET on August 22, 2026, is also in subchapter III, so a Canadian good on that list that does not enter duty-free under USMCA reads as subject to both. None of these combinations has been confirmed by CBP, and total-rate figures built on them should be treated as provisional until CBP confirms them.

CSMS #69326983 sets the reporting order: Chapter 98 where used, then Chapter 99 trade remedies with Section 301 first, then the Chapter 1 to 97 line carrying the entered value.

Drawback, FTZ Admission and the Absence of Exclusions

The duty is drawback eligible. CSMS #69567203 of August 18, 2026 states that 9903.05.01 and 9903.05.20 to 9903.05.84 are drawback eligible, correcting an August 12 ACE change to the FD07 edit that had wrongly blocked them. For importers that re-export, duty drawback is the main recovery route, and any claim blocked by that edit should be checked and resubmitted.

Foreign-trade zones do not defer the choice. Covered products admitted to a zone on or after the effective date may only be admitted in privileged foreign status under 19 CFR 146.41, unless they qualify for domestic status under 19 CFR 146.43. The duty is locked at admission, so a foreign-trade zone still helps with cash flow and with goods that are re-exported, but it cannot be used to wait for a lower rate.

There is no product exclusion process. USTR stated that an exclusion process lowering tariffs on additional products would be inconsistent with the President’s direction, and pointed to modification under Section 307 of the Trade Act (19 U.S.C. 2417) as the route for periodic review. Each economy’s action and each exemption is severable, so a court ruling against one would leave the others in force.

For Bangladesh, Cambodia, Indonesia and Malaysia, USTR said it would establish tariff-rate quotas when feasible, with an initial three-year term, allowing set volumes of textiles and apparel to enter free of the duty based on each country’s imports of US cotton or textile inputs. No Federal Register notice setting them up had been published as of September 23, 2026, so the 10% applies in full until one appears.

The Pending Excess-Capacity Investigation

A second set of Section 301 investigations, on structural excess capacity and production in manufacturing sectors, was initiated on March 11, 2026 and published at 91 FR 12886 on March 17, 2026 (dockets USTR-2026-0067 and USTR-2026-0068). It covers 16 economies: China, the EU, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan and India. The Section 301 Committee held public hearings from May 5, 2026.

As of September 23, 2026, USTR has published no determination and no proposed action; its investigation page shows only the initiation notice and the hearing transcripts. Sourcing models for those origins should carry a scenario line for a further Section 301 duty rather than treat today’s rate as the settled one.

What Trade Teams Should Check Before the Next Entry

First, map every active supplier to its economy and heading, and for the five capped economies rerun the column 1 rate line by line, because the same supplier can land in both headings depending on the product.

Second, audit exemption claims. USMCA and CAFTA-DR relief depends on a preference claim that would survive a CBP request for information, and the Section 232 exemption depends on the good actually falling under one of the listed 232 headings. A 9903.05.90 claim on a good outside those headings is an underpayment.

Third, rebuild duty accruals for China, Brazil and Canadian goods under Section 338 with the stacking question flagged as open, and move drawback and FTZ status decisions into the landed-cost model instead of handling them after the fact. Where the exposure spans dozens of origins, managing it through a structured trade compliance management programme is cheaper than correcting entries one post-summary correction at a time.

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