Toronto, July 31, 2026
On July 23, 2026, the Office of the US Trade Representative (USTR) issued its notice of final action in the Section 301 investigations into 60 economies over their failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labour. The tariffs took effect at 12:01 a.m. ET on Friday, July 24, 2026, and apply to goods entered for consumption or withdrawn from warehouse for consumption on or after that time.
USTR states the action covers the top 60 US trading partners, representing 99.4 percent of US imports. Because the European Union is counted as a single economy, the measure reaches more than 80 countries in practice.
The timing is significant. The Section 122 baseline global tariffs (10 percent) expired on July 24, 2026, and these Section 301 duties took effect immediately afterward, effectively replacing them.
The Rates
A 10 percent additional duty applies to imports from Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, the United Kingdom, and Trinidad and Tobago.
A 12.5 percent additional duty applies to a further 38 economies, including Australia, Brazil, Chile, China, Colombia, Hong Kong, Israel, New Zealand, Norway, the Philippines, Saudi Arabia, Singapore, South Africa, Thailand, Türkiye, the UAE, and Vietnam.
The EU and Taiwan are handled differently: where the Most-Favoured Nation (MFN) rate is below 10 percent, the Section 301 duty tops it up to 10 percent, and where MFN is 10 percent or more, the Section 301 rate is zero. Japan, South Korea, and Switzerland follow the same formula against a 12.5 percent ceiling.
What This Means for Canadian Shippers
Canada was assigned the lower 10 percent rate, and the critical carve-out holds. Products of Canada or Mexico that qualify for duty-free entry under CUSMA/USMCA are exempt. Articles already subject to Section 232 tariffs, including steel and aluminum, are also excluded.
The exposure sits with goods that are not CUSMA/USMCA-qualifying. If your shipments to US customers have been moving without a certification of origin, or if origin claims have never been formally validated, those entries may now be subject to the 10 percent duty if the goods do not qualify for preferential treatment under CUSMA/USMCA.
Minister Dominic LeBlanc noted that the measure was not unexpected given the signalled replacement of the Section 122 baseline tariffs, and pointed to the CUSMA/USMCA exemption and the 10 percent rate applied to Canada rather than the 12.5 percent applied to most other economies. He also confirmed Canada introduced new legislation last month to further strengthen forced labour enforcement mechanisms.
Immediate Action Items
- Confirm CUSMA/USMCA eligibility on every U.S.-bound shipment and ensure certifications of origin are on file and defensible.
- Check in-transit relief. Goods loaded at the port of loading and in transit on the final mode of transit before 12:01 a.m. ET July 24, 2026, are exempt if entered before 12:01 a.m. ET July 28, 2026.
- Review the Annex HS tariff exemptions before assuming exposure.
- If you import into the U.S. from Asia, Europe, or Latin America, model the new landed cost. Imports from countries such as Vietnam now generally face an additional 12.5 percent duty, while many Chinese imports may see the new tariff layered on top of existing duties, subject to applicable exclusions.
- Revisit tariff stacking. Section 232 goods are excluded from this action but other tariffs, included other Section 301 tariffs, will stack on top of one another.
- Tighten supply chain visibility documentation. Under these Section 301 actions, a country’s forced labour enforcement regime now affects tariff treatment in addition to longstanding import admissibility requirements.
One Caution
Eligibility for a preference program alone does not exempt goods from these duties. For Canada and Mexico, the exemption applies only where the goods actually qualify for preferential treatment under CUSMA/USMCA and a valid claim is made.
Section 301 exposure comes down to origin, classification, and documentation. If you would like a review of your CUSMA qualification or a landed cost assessment under the new rates, reach out to Brian Rowe, Director, Customs Compliance and Regulatory Affairs, or ask us about a SMART Customs Review.
