U.S. Adds 12.5% Section 301 Tariff on Chinese Goods

The tariff landscape for goods entering the United States has changed again.

 

 

Just before the temporary 10% Section 122 import surcharge reached its scheduled expiration, U.S. Customs and Border Protection issued implementation guidance for a new Section 301 forced labor tariff covering imports from 60 economies.

 

Effective July 24, 2026, many products originating in China are subject to an additional 12.5% duty. For importers and cross-border sellers, this development adds another layer to already complex China import tariffs and makes accurate classification, landed-cost calculations, and U.S. customs compliance more important than ever.

 

According to CBP, the new duties apply to covered goods entered for consumption, or withdrawn from a bonded warehouse for consumption, on or after 12:01 a.m. Eastern Time on July 24, 2026. China and Hong Kong are among the economies subject to the 12.5% additional rate.

 

Part 1: CBP Implementation Guidance—What Sellers Need to Know

1. When Did the New Tariff Take Effect?

The new duty became effective at 12:01 a.m. Eastern Time on July 24, 2026.

Covered merchandise entered for consumption or withdrawn from a bonded warehouse for consumption on or after that time is subject to the applicable additional duty.

The temporary 10% Section 122 import surcharge had been imposed for a maximum period of 150 days, beginning February 24, 2026, and remained effective through July 24, 2026.

 

2. How Have the Duty Rates Changed?

The new measure is an additional trade-remedy duty. It generally does not replace a product’s normal customs duty, existing China Section 301 duties, antidumping or countervailing duties, or other applicable taxes and fees.

 

For a covered China-origin product, the potential duty structure may include:

Normal MFN duty + existing China Section 301 duty of 7.5% or 25% + new 12.5% Section 301 forced labor duty

However, products covered by designated exemptions—including qualifying products subject to Section 232 measures—may not be required to pay the new 12.5% duty.

The actual duty rate must therefore be determined using the product’s complete HTSUS classification and all applicable Chapter 99 provisions.

 

Tariff Rates by Economy

The following are examples of the rate categories announced by CBP:

12.5% additional duty

China, Hong Kong, Vietnam, Thailand, the Philippines, Türkiye, South Africa, Brazil, Australia, Singapore, and many other investigated economies.

10% additional duty

Argentina, Bangladesh, Cambodia, Canada, India, Indonesia, Malaysia, Mexico, Pakistan, Sri Lanka, the United Kingdom, and several other economies.

MFN-inclusive capped rates

Special calculations apply to certain goods originating in the European Union, Taiwan, Japan, South Korea, and Switzerland.

For products from the European Union or Taiwan, the combined MFN and new Section 301 rate is generally capped at 10%.

For products from Japan, South Korea, or Switzerland, the combined MFN and new Section 301 rate is generally capped at 12.5%.

This means that the new duty may be reduced to zero when a product’s existing MFN rate is already equal to or higher than the applicable cap.

 

3. What Happens to Cargo Already in Transit?

CBP has established a narrow in-transit exemption for qualifying ocean shipments.

Eligible merchandise may be entered under HTSUS 9903.05.85 and exempted from the new duty only when both of the following requirements are satisfied:

• The merchandise was loaded onto a vessel at the port of loading and was already in transit on its final mode of transportation before 12:01 a.m. ET on July 24, 2026.
• The merchandise was entered for consumption or withdrawn from a bonded warehouse for consumption before 12:01 a.m. ET on July 28, 2026.

Both conditions must be met.

A shipment that was loaded before July 24 but was not entered for consumption before the July 28 deadline generally cannot use the in-transit exemption.

Importers should also note that the exemption language specifically applies to merchandise “loaded onto a vessel.” As a result, air freight shipments do not qualify for this transition provision.

Arrival at a U.S. port alone is not sufficient. Importers should confirm with their customs broker whether the entry was formally filed within the required time window.

 

4. Are Any Products Exempt?

Yes. Certain goods may qualify for exemption based on their HTSUS classification, intended use, industry, or other conditions established in the official notice.

Major exemption categories include:

• Products covered by designated HTSUS classifications under headings 9903.05.86 and 9903.05.87
• Civil aircraft, engines, components, subassemblies, and certain flight simulators
• Products intended for pharmaceutical applications
• Qualifying steel, aluminum, copper, and derivative products
• Passenger vehicles, light trucks, medium- and heavy-duty vehicles, and certain vehicle parts
• Certain wood products
• Semiconductor products
• Humanitarian donations intended to relieve human suffering
• Books, films, photographs, artwork, publications, and other informational materials
• Certain economy-specific products and trade-agreement-eligible goods

CBP has published a detailed Section 301 Forced Labor HTS List. Importers should search the list using the full HTSUS classification rather than relying only on the first six digits of an HS code.

Because eligibility may depend on both the tariff number and the legal description of the goods, sellers should confirm any exemption with a licensed customs broker before filing an entry.

 

Part 2: How Much Could Your Import Duty Increase?

For many China-origin products previously subject to the temporary 10% Section 122 surcharge, the change to a 12.5% Section 301 forced labor tariff may result in a net increase of approximately 2.5 percentage points.

However, the increase is not universal.

The final amount depends on whether the product is already subject to the original China Section 301 duties, Section 232 duties, antidumping and countervailing duties, or one of the new exemptions.

The following examples provide a general framework.

U.S. Tariffs on Chinese Imports at a Glance

Tariff Category	Covered Products / Scope	Tariff Rate	Explanation
Base Tariff (MFN)	All China-origin goods imported into the United States	0%–15% for most products	The standard customs duty applied to imported goods. The rate varies by product category and HTSUS classification.
Existing Section 301 Tariffs	Certain China-origin products imported into the United States	7.5% or 25%; a limited number of products are subject to 100%	Most products on the Section 301 tariff lists are subject to an additional duty of 7.5% or 25%. A small number of sensitive products, including electric vehicles and certain medical supplies, are subject to a 100% tariff.
New Section 301 Tariff (Forced Labor)	Covered products originating from the affected economies	12.5%	Generally imposed in addition to existing Section 301 tariffs, unless a specific exemption applies.
Section 232 Tariffs	Steel, aluminum, copper, automobiles, and related parts	25%–50%	The new Section 301 forced labor tariff generally does not stack with applicable Section 232 tariffs. Section 232 treatment takes precedence for qualifying products.
Section 122 Import Surcharge	Products imported from all countries, including China	10%	A temporary import surcharge that expired on July 24, 2026, and was replaced by the new Section 301 forced labor tariff for covered products.
Section 122 Import Surcharge	Certain products, such as mattresses, wooden cabinets and vanities, electric blankets, and ceramic tiles	Varies by product and exporter	Additional duties imposed on specific products determined to have been dumped in the U.S. market or unfairly subsidized by a foreign government.

Actual duty rates depend on the product’s complete HTSUS classification, country of origin, manufacturer or exporter, and applicable trade-remedy measures. Importers should confirm the final tariff treatment with a licensed customs broker.

 

Scenario 1: Product Is Not Covered by the Original China Section 301 Lists or Section 232

The potential duty calculation is:

MFN duty + 12.5% new Section 301 forced labor duty

For example, if the normal MFN rate is 5%, the combined rate could be 17.5%, excluding merchandise processing fees and other applicable charges.

 

Scenario 2: Product Is Covered by the Original China Section 301 Lists

The potential calculation is:

MFN duty + 7.5% or 25% existing China Section 301 duty + 12.5% new Section 301 forced labor duty

This scenario may apply to a significant number of China-origin products.

For a product with a 5% MFN rate and an existing 25% Section 301 duty, the combined customs duty could reach 42.5% before considering any additional trade remedies.

 

Scenario 3: Product Is Covered by Section 232

The general calculation may be:

MFN duty + applicable 25% or 50% Section 232 duty

Qualifying goods covered by the relevant Section 232 exemption provisions generally do not have the new 12.5% forced labor duty added on top.

Products in this category may include certain steel, aluminum, copper, vehicle, automotive-component, wood, and semiconductor products, subject to their specific HTSUS classifications.

 

Scenario 4: Product Is Covered by Both an Existing China Section 301 Measure and Section 232

Depending on the applicable Chapter 99 provisions, the potential structure may be:

MFN duty + existing China Section 301 duty + applicable Section 232 duty

Where the product qualifies for the Section 232-related exemption under the new forced labor action, the additional 12.5% duty would not be added.

Because trade-remedy duties are highly classification-specific, importers should not rely on a simplified formula without reviewing the relevant HTSUS provisions.

 

Additional Warning: Antidumping and Countervailing Duties

Products subject to antidumping duties, countervailing duties, or both must continue to pay those duties in addition to other applicable charges.

AD/CVD rates may be significantly higher than ordinary customs duties and can vary according to the manufacturer, exporter, country of origin, and applicable Commerce Department order.

 

Part 3: What Should Sellers Do Now?

The growing complexity of China import tariffs is forcing importers and cross-border sellers to take a closer look at customs classifications, supply-chain design, and product-level profitability.

Three immediate actions should be prioritized.

1. Review Ocean Shipments That Were Already in Transit

Identify U.S.-bound ocean shipments loaded before July 24 and ask your freight forwarder and customs broker to confirm:

• The actual vessel loading date
• Whether the shipment was on its final mode of transportation before the cutoff
• The formal entry date
• Whether HTSUS 9903.05.85 was properly claimed
• Whether the merchandise met both in-transit exemption requirements

Do not assume that a shipment qualifies simply because it departed before July 24.

 

2. Verify the Product’s HTSUS Classification

Review the product’s full U.S. HTSUS code and compare it with the official exemption list.

An inaccurate classification can result in:

• Overpayment of duties
• Underpayment and later duty bills
• Entry delays
• CBP penalties
• Increased examination risk
• Problems during post-entry audits

Classification should be based on the product’s material, function, construction, technical specifications, and intended use—not solely on a supplier-provided HS code.

Strong U.S. customs compliance begins with an accurate tariff classification.

 

3. Recalculate Product-Level Profitability

For low-margin products, a net tariff increase of 2.5 percentage points can materially reduce profitability.

Sellers should recalculate:

• Manufacturing costs
• International freight charges
• Customs duties
• Customs brokerage fees
• Warehousing costs
• Amazon FBA or other marketplace fulfillment fees
• Last-mile delivery expenses
• Returns and inventory holding costs
• Final selling prices

Businesses operating supply chains across China, Southeast Asia, and other economies should also compare total landed costs by country of origin.

 

As more economies become subject to similar 10% or 12.5% rates, shifting production to another country may no longer deliver the same tariff advantage it once did. Origin changes must also reflect genuine manufacturing operations and comply with U.S. substantial-transformation rules.

 

Conclusion

The new Section 301 forced labor tariff adds a 12.5% duty to many China-origin products entering the United States from July 24, 2026.

While the expiration of the temporary Section 122 surcharge means the net increase may be approximately 2.5 percentage points for some goods, actual China import tariffs will depend on the product’s HTSUS classification, existing Section 301 duties, Section 232 coverage, exemptions, and any applicable antidumping or countervailing duties.

 

Importers should review in-transit shipments, verify tariff classifications, confirm exemption eligibility, and update landed-cost calculations as soon as possible. Careful documentation and accurate entry filing will be essential to maintaining U.S. customs compliance under the new tariff structure.

 

Forest Shipping will continue to monitor U.S. customs regulations and tariff developments closely. We provide professional, secure, and efficient cross-border shipping and customs-clearance solutions for businesses importing from China to the United States. For customs or freight assistance, contact us at digitalmarketing@forestshipping.com.

 

Duty calculations in this article are provided for general reference only. Final tariff treatment should be confirmed with a licensed customs broker or qualified trade professional based on the complete HTSUS classification and entry details.