Published on: 2026-07-29
Updated on: 2026-07-29
Listed energy products, specified fertilisers, tropical agricultural goods, qualifying pharmaceutical inputs, civil-aircraft articles and USMCA duty-free goods from Canada and Mexico all avoid the new US Section 301 duties that took effect at 12:01 a.m. Eastern Time on 24 July 2026.
The Office of the United States Trade Representative applied additional duties of 10% or 12.5% to imports from 60 economies covering 99.4% of US imports, citing their failure to impose and effectively enforce prohibitions on goods produced with forced labour.
Exposure now turns on three questions: whether a product appears in the exemption annexes, whether the duty is added in full or only fills a gap to a threshold, and how it combines with charges already in force.
USTR initiated 60 investigations on 12 March 2026, held hearings on 28 and 29 April, published findings on 2 June, ran a second round of hearings on proposed remedies from 7 to 9 July, and announced final action on 23 July under Ambassador Jamieson Greer.
The timing followed a legal reset. On 20 February 2026, the Supreme Court held in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act does not authorise tariffs.
The administration applied a temporary 10% surcharge under Section 122 of the Trade Act, capped at 150 days, and the new Section 301 duties began as that period ended. Section 301 has become one of the administration’s main replacement authorities for imposing tariffs.
Goods loaded onto a vessel and already in transit on their final mode of transport before implementation escaped the duty if entered for consumption before 12:01 a.m. on 28 July.
Four treatments sit inside a headline range that looks uniform.
| Treatment | Economies | Mechanism |
|---|---|---|
| Additional 10% | 17, including the UK, India, Canada, Mexico, Indonesia and Malaysia | Added to the normal column-one MFN duty |
| MFN plus new duty capped at 10% | European Union, Taiwan | New duty covers only the difference between the MFN rate and 10% |
| MFN plus new duty capped at 12.5% | Japan, South Korea, Switzerland | New duty covers only the difference between the MFN rate and 12.5% |
| Additional 12.5% | Remaining 38, including China, Vietnam, Brazil and Russia | Added to the normal column-one MFN duty |
A European good carrying a 9% MFN rate picks up a 1% Section 301 duty. Where the MFN rate already reaches the threshold, the new component is zero. An equivalent good from a stacked-rate economy absorbs the full 12.5% above its existing duty.
The cap covers the MFN duty and this Section 301 charge alone. US Note 52 preserves other duties, taxes, fees and charges, so a capped rate is not a ceiling on total tariff cost.
Applicable charges are cumulative rather than alternative, so landed-cost models generally need to account for the MFN rate, any legacy Section 301 duties, the new forced-labour duty and any anti-dumping or countervailing duties. The precise calculation depends on the relevant HTSUS and Chapter 99 headings, valuation rules and any AD/CVD orders in force.
Chinese goods carry the new charge in addition to relevant legacy Section 301 duties. Brazil sits in the 12.5% group while facing a separate 25% Section 301 action effective 22 July. The worldwide suspension of the $800 de minimis exemption, in force since 29 August 2025, means low-value parcels receive no general relief.
Steel, aluminium, copper, named vehicle and vehicle-part categories, wood products and semiconductor articles covered by Section 232 measures sit outside the new duty. That prevents the charge being applied above those sectoral measures rather than granting cheaper access, and it works through specified HTSUS and Chapter 99 headings rather than by industry. Liability attaches to the entry date, which is the trigger for accruals and customer pricing notices.
Annex II, Part A lists more than 2,100 tariff lines available to all 60 economies, with 471 additional products exempted following public comments. Of those, 541 apply only to goods entered for civil-aircraft use and 700 only to goods entered for pharmaceutical use.
| Exempt category | Examples | Cost relief reaches |
|---|---|---|
| Energy | Crude oil, refined products, LNG, propane, coal | Refiners, utilities, chemicals, transport |
| Fertiliser | Nitrogen, phosphate, potash | Farmers, food processors |
| Tropical agriculture | Coffee, cocoa, tea, spices, bananas | Food and beverage groups, grocers |
| Pharmaceutical use only | Active ingredients, excipients, intermediates | Drug makers, healthcare distributors |
| Civil aircraft use only | Engines, parts, subassemblies, simulators | Aerospace manufacturers, airlines |
| Critical minerals | Nickel, cobalt, manganese, rare earths | Industrial and battery supply chains |
None of these categories is a blanket sector-wide exemption. Relief applies only to listed HTSUS classifications and any stated end-use conditions. USTR narrowed the pharmaceutical designation after public comment, so a chemical on the list may remain dutiable when imported for a non-pharmaceutical purpose.
Aircraft goods must satisfy General Note 6. A further exemption for patented pharmaceutical articles took effect for entries on or after 12:01 a.m. on 31 July, a staggered date worth checking against entry records.
The Tax Policy Center estimates that more than 4,000 items and just over half of imports from the targeted economies are exempt, and puts the revenue effect at around $581 billion over the budget window. Those are independent projections rather than official revenue figures.
The clearest global tariff winners in 2026 are importers of exempt goods and exporters facing capped rates. Listed energy, fertiliser, tropical agriculture, qualifying pharmaceutical inputs and civil-aircraft articles avoid the new US Section 301 duty, while EU, Taiwanese, Japanese, Korean and Swiss goods face a capped combined rate rather than a full addition.
Beyond that summary, any assessment of global tariff winners in 2026 has to separate exporters that gained relative cost advantage from those that merely avoided a larger increase. A supplier holding the 10% band can still lose share if its baseline duties are high, if an anti-dumping order applies, or if buyers can source domestically.
The energy and fertiliser exemptions illustrate the point. They protect US buyers and downstream users from a new cost, while denying domestic producers the additional protection a tariff on competing imports would have created.
Domestic manufacturers stand to gain most where import rivals are tariffed, their own inputs are exempt or locally sourced, and spare capacity exists to lift output.
Companies dependent on tariffed components while selling into price-sensitive markets gain little. These are relative advantages rather than guaranteed outcomes.
Canadian and Mexican goods entered duty-free under USMCA are excluded, favouring US manufacturers sourcing compliant components and suppliers able to document rules of origin. Goods failing the applicable origin or documentation requirements remain exposed to the 10% treatment.
Annex II Part O covers 1,737 textile and apparel lines for Jordan and qualifying goods from El Salvador and Guatemala. Annex I separately exempts textile and apparel products entered duty-free under CAFTA-DR from Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua, strengthening Central American apparel chains against Asian competitors.
USTR has directed the establishment of three-year tariff-rate quotas, as soon as feasible, for selected textiles from Bangladesh, Cambodia, Indonesia and Malaysia, linked to purchases of US cotton. No structure or effective date was published, leaving this a planned rather than operational mechanism.
Two suits were filed at the Court of International Trade on 24 July, one involving Learning Resources and other businesses from the earlier litigation, and one brought by Burlap & Barrel and Collective Horology with the Liberty Justice Center.
Both question whether USTR made sufficiently economy-specific findings and whether near-uniform remedies are permissible. These remain allegations, not judicial findings.
Earlier China litigation in HMTX Industries upheld USTR’s authority under Section 307 to modify an existing Section 301 action. It does not automatically validate the initial findings or standardised remedies in these 60 new investigations, and the court has not answered that question.
At 12:01 a.m. Eastern Time on 24 July 2026, as the temporary Section 122 surcharge reached the end of its 150-day period.
Seventeen economies face an additional 10% and 38 an additional 12.5%. For the EU and Taiwan, the MFN duty plus new duty is capped at 10%. For Japan, South Korea and Switzerland, the cap is 12.5%.
No. Exemption applies to this Section 301 action only. MFN duties, Section 232 measures, anti-dumping and countervailing duties, and legacy China duties still apply where relevant.
There is no 150-day sunset. A Section 301 action may terminate after four years if no qualifying continuation request is made. If continued, USTR conducts a statutory review and may modify or end it earlier.
