US forced-labor tariffs hit 60 trading partners as Section 122 expires — apparel sourcing teams must audit supplier countries

This article is for informational purposes only and does not constitute legal, compliance, or sourcing advice. Verify certification and regulatory requirements with the relevant standards body or counsel.

Editorial note: Reported by The Sourcing Desk editorial team. We cross-reference claims against standards-body publications, regulatory filings, and primary sourcing data. Published 2026-07-24.

The United States will apply new Section 301 forced-labor tariffs of either 10% or 12.5% to imports from 60 trading partners starting 25 July 2026, the same date the temporary Section 122 global duty expires, according to a Federal Register filing published by the Office of the US Trade Representative (USTR) on 23 July 2026.

The affected countries include China, the European Union member states, Mexico, Canada, and Brazil. The tariffs cover 99.4% of US imports by value, per a USTR fact sheet released alongside the filing. Goods loaded onto a vessel before 25 July and entered for consumption before 28 July are exempt. Everything else is subject to the new rates from the effective date.

The tariffs follow a Section 301 investigation launched in March 2026 into the forced-labor enforcement records of key US trading partners. USTR Jamieson Greer proposed the levies in June after concluding that the 60 countries had failed "to impose and effectively enforce" prohibitions on goods made with forced labor. The USTR fact sheet released Thursday stated that "the prevalence of forced labor persists worldwide and has even escalated in recent years."

For apparel brands and retailers sourcing from countries that hold Most-Favored Nation (MFN) status with the US, including the EU, Japan, and South Korea, the tariff is calculated net of the existing MFN duty rate. In practice, the combination of the Section 301 charge and the MFN rate will not exceed either 10% or 12.5%, whichever applies to that country, unless the MFN duty already exceeds that ceiling. Pete Mento, director of global trade advisory services at Baker Tilly, described this "net of MFN" mechanism as potentially the most consequential detail in the entire announcement, noting it could fundamentally change how the Section 301 duty is calculated for MFN-eligible products rather than simply stacking on top of existing duties.

Several product categories are exempt from the new tariffs. These include a range of agricultural goods, products already subject to Section 232 levies such as steel and aluminum, and certain country-specific carve-outs. The filing lists, for example, certain textiles from Malaysia and whiskey from the United Kingdom among the exemptions. Apparel teams sourcing from Malaysia should check the filing directly to confirm whether their specific product categories qualify.

What this means for sourcing teams

The immediate priority is country mapping. Sourcing and compliance leads should pull their full supplier list and cross-reference each country against the USTR Federal Register filing to confirm the applicable rate (10% or 12.5%) and whether any product-level or country-level exemptions apply. This is not a uniform tariff: the rate varies by country, and the MFN netting mechanism means the landed-cost impact differs significantly depending on where goods originate.

For shipments already in transit, the vessel-loading date is the operative threshold. Goods loaded before 25 July and entered for consumption before 28 July are not subject to the new tariffs. Sourcing teams should collect bill-of-lading dates and entry documentation for any in-transit orders now, before US Customs and Border Protection (CBP) begins processing entries under the new schedule.

On the compliance side, the Uyghur Forced Labor Prevention Act (UFLPA) remains in force alongside these new tariffs. UFLPA establishes a rebuttable presumption that goods produced in whole or in part in the Xinjiang Uyghur Autonomous Region of China are made with forced labor and are therefore prohibited from US import unless the importer can demonstrate otherwise to CBP. The new Section 301 tariffs do not replace or modify UFLPA. Brands sourcing from China, particularly those with cotton, yarn, or fabric in their supply chain, need current UFLPA documentation: supply-chain traceability records that trace finished garments back through spinning and ginning to the farm of origin, transaction records, and any third-party audit reports accepted by CBP.

For suppliers in countries now subject to the 12.5% rate, sourcing teams should request updated cost sheets and assess whether the duty exposure changes the commercial viability of existing purchase orders. Where contracts include duty-escalation clauses, those should be reviewed against the new rates. Where they do not, the exposure sits with the importer of record.

Canada and Brazil present a specific complication. Both countries are on the forced-labor tariff list, and both have also been subject to separate new US levies imposed in the past week. The 23 July filing did not specify how the forced-labor tariffs interact with those additional duties. Until USTR or CBP publishes clarifying guidance, sourcing teams with Canadian or Brazilian suppliers should model worst-case stacking scenarios and seek customs counsel before making sourcing decisions based on assumed rates.

What changed

The Section 122 tariff, a temporary 10% global duty installed earlier in 2026 after a Supreme Court ruling invalidated previous duties imposed under the International Emergency Economic Powers Act (IEEPA), expires on 25 July. The Trump administration is replacing it with the Section 301 forced-labor tariffs, which carry a different legal basis and a different rate structure.

Section 301 of the Trade Act of 1974 gives the USTR authority to impose tariffs in response to foreign government practices that are "unreasonable or discriminatory" and burden US commerce. Using it to target forced-labor enforcement failures is a broader application of the statute than its more common use against specific trade practices such as intellectual property theft. The USTR's March investigation and June proposal followed that same week's launch of a separate Section 301 probe into global manufacturing capacity, which has not yet produced findings.

The scale of the action is notable. Sixty countries and 99.4% of US imports by value is a near-universal tariff regime, even if the rates are lower than some of the IEEPA-era duties that preceded the Supreme Court ruling.

Limitations and open questions

Several material questions remain unanswered. The USTR filing does not explain how the forced-labor tariffs interact with the new Canada and Brazil-specific duties imposed in the past week. That gap creates real uncertainty for sourcing teams with North American or South American supply chains.

The separate Section 301 investigation into global manufacturing capacity is still open. USTR has not published findings or proposed rates. If that investigation produces additional tariffs, they would layer onto the forced-labor duties, though whether the MFN-netting logic would apply there is not yet clear.

Country-specific exemptions in the filing are narrow and product-specific. The Malaysia textile carve-out, for instance, applies to certain categories and not others. The filing should be read at the HTS-code level, not assumed to cover entire industries. USTR has not published a plain-language product-by-product guide as of the time of writing.

Finally, the legal durability of Section 301 tariffs at this scale has not been tested in court following the Supreme Court's IEEPA ruling. Legal challenges are possible, though no timeline for any such action is known.

This article is for informational purposes only and does not constitute legal, compliance, or sourcing advice. Verify certification and regulatory requirements with the relevant standards body or counsel.