When will the new Section 301 forced-labor tariffs take effect, and what products are exempted?

Flexport expects implementation before July 24, 2025, when Section 122 duties expire. The new tariffs would exempt natural resources, critical minerals, pharmaceuticals, chemicals, civil aircraft products, goods already subject to Section 232 tariffs, and USMCA- and DR-CAFTA-qualified products. Public comments close July 6 and a hearing is scheduled for July 7.

What tariff rates are proposed under the new Section 301 program?

The proposal includes a 10% tariff on 13 countries plus the European Union, and a 12.5% tariff on 46 additional countries. Most countries with existing U.S. trade agreements would fall into the lower 10% tier. A tariff-rate quota system for textiles is also under consideration, allowing a specified volume to enter at reduced rates before higher duties apply.

Why might the new forced-labor tariffs face legal challenges?

Opponents argue that imposing tariffs on products representing approximately 99% of U.S. import value exceeds congressional intent under Section 301 and may violate the Supreme Court's 'major questions' doctrine. Additionally, unlike the 2018 China tariffs based on intellectual property theft and industrial subsidies, the forced-labor proposal may face scrutiny over whether tariffs are an appropriate remedy for the stated concern.

What is the status of USMCA negotiations and Section 232 metal tariff relief?

A major USMCA review is scheduled for July 1, but Flexport's Marcus Eeman indicated a comprehensive deal is unlikely. However, USMCA preferences will remain in effect. Meanwhile, the U.S. has recently lowered the threshold for duty-free status on mobile industrial products from 95% U.S. content to 85%, and created new reductions for agricultural equipment and HVAC systems. Trade partners like the EU, Japan, and South Korea may qualify for capped 15% rates on certain products.

How much has been refunded so far through the CAPE tariff refund system?

CBP has accepted nearly $95 billion in refund claims and transmitted $23.68 billion to the Treasury Department for processing. More than 10.6 million entries have been liquidated or reliquidated. Phase 2 launches June 29 for reconciliation entries, with Phase 3 for finally liquidated entries expected later in summer, though ongoing litigation complicates the scope of refunds.

Trade Policy & Tariffs

High Impact

New Tariff Wave Could Hit Before July Expiration, Extending Trade Pressure

Jun 18, 2026

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The signal

Flexport's trade experts warn that a fresh wave of tariffs targeting forced labor practices could arrive before existing Section 122 duties expire on July 24, potentially maintaining the tariff pressure that has disrupted global supply chains throughout 2024 and into 2025. S. import value—a scope that invites legal challenges similar to those already challenging current IEEPA tariffs.

The tariff timing creates a critical compliance window for importers, with public comments closing July 6 and implementation expected before July 24. Additionally, uncertainty around USMCA's July 1 review milestone, unresolved negotiations over metal tariffs, and ongoing court battles over tariff refunds through the CAPE system suggest importers face months of elevated operational risk and costs. The proposed tariff-rate quota system for textiles introduces new complexity for apparel sourcing strategies.

For supply chain professionals, this development signals the need for immediate scenario planning around duty rates, sourcing diversification within and outside tariff-affected geographies, and engagement with trade compliance teams to track both the forced-labor tariff proposal and ongoing litigation that could alter the competitive landscape.

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Frequently Asked Questions

What This Means for Your Supply Chain

Simulation Suggestion

immediate

What if Section 301 forced-labor tariffs impose an average 11.5% duty on your sourced products?

Model the cost impact if a new Section 301 tariff targeting forced labor enforcement goes into effect July 15, 2025, adding an average 11.5% duty on your primary import categories (excluding USMCA-qualified goods and exempted products). Assume current sourcing maintains today's geographic distribution and shipping volumes. What is the gross cost increase over Q3-Q4 2025, and which product categories face the largest duty burden?

Run this scenario

Simulation Suggestion

this week

What if you shift 15% of non-exempt sourcing to USMCA-qualified suppliers?

Evaluate the feasibility and cost-benefit of redirecting 15% of your current imports from non-tariff-agreement countries to USMCA-qualified suppliers (Mexico, Canada) to avoid the proposed Section 301 forced-labor tariffs. Model the sourcing change including any increased freight costs, lead time changes, and supplier qualification lead times. What is the net tariff savings versus logistics cost premium, and which SKUs are easiest to reroute?

Run this scenario

Simulation Suggestion

this month

What if CAPE refund litigation stalls and you only recover 60% of expected IEEPA tariff duties?

Assume ongoing litigation over the CAPE refund system results in a narrower refund scope than initially expected, and your company recovers only 60% of anticipated refunds on finally liquidated entries. Model the cash flow impact on your Q3 2025 working capital if the government appeal succeeds and Phase 3 refunds are delayed or reduced. What contingency funding is needed, and how should this affect your tariff reserve accrual strategy?

Run this scenario

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Supply Chain Digital Twin: The 2026 Guide

How operators model end-to-end supply chains to see how tariffs, supplier shocks, and regulatory changes ripple across cost, service, risk, and time.

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