US forced-labour tariffs hit 60 trading partners at 10–12.5% before Section 122 expires

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 2026-07-25.

The United States Trade Representative (USTR) published a Federal Register filing on 23 July 2026 imposing Section 301 forced-labour tariffs of either 10% or 12.5% on imports from 60 trading partners, with the duties taking effect on 25 July 2026, the same date the temporary Section 122 global tariff expires. For apparel sourcing teams, the filing is not an abstraction: Bangladesh, Cambodia, China, Mexico, Vietnam, India, and the European Union are all on the list, covering the majority of global garment production capacity.

The tariffs are the direct output of a Section 301 investigation launched by USTR in March 2026 into the forced-labour enforcement practices of key US trading partners. USTR Jamieson Greer first proposed the levies in June 2026 after finding that all 60 countries had failed "to impose and effectively enforce" prohibitions on goods made with forced labour. A USTR fact sheet released alongside the filing states the tariffs cover 99.4% of US imports by value. The timing is deliberate: the Section 122 global 10% tariff, installed after the Supreme Court invalidated previous International Emergency Economic Powers Act (IEEPA)-based duties in February 2026, expires on the same Friday. The forced-labour tariffs are the administration's mechanism for maintaining duty pressure without the legal authority it lost.

Rates split along two tiers. Countries with Most-Favored Nation (MFN) status, including the European Union, Japan, and South Korea, face a tariff calculated net of their existing MFN duty rate, meaning the combined charge will not exceed 10% or 12.5% unless the MFN rate already surpasses that ceiling. Pete Mento, director of global trade advisory services at Baker Tilly, noted on LinkedIn that the "net of MFN" language could fundamentally alter how the Section 301 duty is calculated for those products, a point that customs counsel will need to work through quickly. Goods loaded on a vessel before 25 July and entered for consumption before 28 July are exempt. Steel, aluminum, and other goods already subject to Section 232 levies are also excluded, as are certain country-specific carve-outs such as particular textiles from Malaysia and whiskey from the United Kingdom.

What this means for sourcing teams

The first task is a country-of-origin audit against the 60-nation list. For most apparel brands, several tier-1 and tier-2 supplier countries will appear on it. Bangladesh faces a 10% rate; China and Cambodia are at 10% and 10% respectively; Vietnam's rate has not been confirmed in the filing excerpt available, so teams should pull the full Federal Register document directly. The practical definition of landed duty cost has changed overnight for any purchase order not yet on the water.

Second, teams must model the duty impact on open orders and forward contracts. The "net of MFN" provision for EU and other MFN-status countries requires a line-by-line review of HTS codes rather than a blanket percentage applied to invoice value. Customs brokers should be asked to confirm the effective rate for each origin-HTS combination before shipments clear.

Third, the Uyghur Forced Labor Prevention Act (UFLPA) documentation stack remains a separate and parallel obligation. The UFLPA, administered by US Customs and Border Protection (CBP), creates a rebuttable presumption that goods with any nexus to the Xinjiang Uyghur Autonomous Region are made with forced labour and are therefore inadmissible. The new Section 301 tariffs do not replace or satisfy UFLPA requirements. Sourcing teams should confirm that supplier-level UFLPA documentation, including supply chain traceability records back to raw material origin, is current and on file before Friday's effective date. CBP has not signalled any grace period.

Fourth, for suppliers in countries also subject to recently announced bilateral tariffs, such as Canada (which faces separate levies announced in July 2026) and Brazil (subject to a 25% tariff imposed on 16 July 2026), the interaction between the forced-labour tariff and those bilateral rates is not yet clarified in the filing. The USTR fact sheet does not address stacking. Compliance teams should seek written guidance from customs counsel before assuming the lower rate applies.

Finally, supplier contracts that include duty-escalation clauses should be reviewed. Where no such clause exists, brands absorbing the cost increase on existing purchase orders will need to decide quickly whether to renegotiate, delay shipment, or accept the margin hit.

What changed

The Section 301 authority used here is distinct from the IEEPA authority the Supreme Court struck down in February 2026. Section 301 of the Trade Act of 1974 grants the USTR broad power to act against foreign practices that are "unreasonable or discriminatory" and burden US commerce. Forced-labour enforcement failures by trading partners fall within that definition as the administration has framed it. The investigation ran from March to July 2026, a compressed timeline by historical standards.

The Section 122 tariff it replaces was itself a stopgap. After the Supreme Court ruling, the Trump administration installed a flat 10% global tariff under Section 122 of the Trade Act of 1974, a provision designed for balance-of-payments emergencies with a statutory 150-day limit. That limit expires 25 July. The forced-labour Section 301 tariffs carry no equivalent statutory expiration, which means they are structurally more durable, though they remain subject to legal challenge.

For the apparel sector specifically, the geographic breadth is the defining feature. Unlike the UFLPA, which targets a specific region and supply chain nexus, these tariffs apply at the country level regardless of product type or labour certification status. A factory in Bangladesh holding a Fair Trade USA or Global Organic Textile Standard (GOTS) certification is not exempt. The tariff is a trade measure, not a labour-standards verification mechanism.

Limitations and open questions

Several material questions remain unanswered in the current filing.

The interaction between the forced-labour Section 301 tariff and the separate bilateral tariffs on Canada and Brazil has not been addressed. The filing is silent on whether the rates stack, net, or operate independently. USTR has not published guidance on this point as of 25 July 2026.

The full country-rate table in the Federal Register filing runs to 60 entries. The Supply Chain Dive report published 23 July 2026 shows a partial table; sourcing teams should not rely on secondary reporting for rate confirmation and should pull the primary filing directly from the USTR website.

A parallel Section 301 investigation into global manufacturing capacity, launched the same week as the forced-labour probe in March 2026, has not yet published findings. If that investigation results in additional tariffs, the cumulative duty burden on apparel imports from major production countries could increase further. USTR has not indicated a timeline for those findings.

Country-specific exemptions listed in the filing, such as the Malaysian textile carve-out, have not been fully itemised in public reporting. Teams sourcing from Malaysia should verify whether their specific product categories fall within or outside the exemption before assuming relief.

Finally, the legal durability of Section 301 tariffs applied on this basis has not been tested in court. Importers challenged previous tariff actions under IEEPA successfully. Whether the Section 301 forced-labour rationale survives judicial review is an open question that trade counsel are likely already assessing.

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.