Forced-labor tariffs replace the expired global surcharge

Summary

On July 23, 2026, President Trump directed Section 301 tariffs of 10% or 12.5% on 60 trading partners, citing each economy's failure to ban or effectively enforce a ban on imports made with forced labor. The tariffs took effect July 24, 2026, the day the temporary 10% Section 122 global surcharge expired. USTR says the 60 economies account for 99.4% of US imports.

What happened

USTR opened the 60 forced-labor investigations on March 12, 2026 and finalized action on July 23. Economies that ban forced-labor imports, have committed to do so in an Agreement on Reciprocal Trade, or have a partial regime pay 10%; all others pay 12.5%. For the EU, Japan, South Korea, Switzerland and Taiwan the rate is set net of the MFN duty. Exemptions cover goods under Section 232 tariffs, certain raw materials and supply-critical products, and, per trade press, Canadian and Mexican goods entered duty-free under USMCA. A senior administration official called it 'the most sweeping international labor rights action the United States has ever taken.' USTR Jamieson Greer told the Senate the administration would keep using tariffs to support 'the reindustrialization of our economy.' The tariffs took effect at 12:01 a.m. on July 24, when the 150-day Section 122 surcharge lapsed. A parallel Section 301 excess-capacity investigation of 16 economies was still pending.

Impact on the United States

The duties are paid by US importers on goods from economies that supply 99.4% of US imports, subject to exemptions. Yale Budget Lab puts the average statutory tariff rate at 11.0% after the switch and estimates that current-law tariffs (all authorities) cost households about $1,100 a year. Tax Foundation estimates this action will collect $805.6 billion in direct customs duties over 2026-2035 before income- and payroll-tax offsets, and projects long-run GDP 0.1% lower and 123,000 fewer full-time-equivalent jobs.

Documented effects

1. Jul 24, 202610% or 12.5% Section 301 tariffs on goods from 60 economies (which USTR says supply 99.4% of US imports) took effect 12:01 a.m. July 24, 2026, replacing the expired Section 122 surcharge[1][3][5][6]
2. Aug 24, 2026Yale Budget Lab: average statutory tariff rate at 11.0% after the Section 122-to-Section 301 switch; current-law tariffs cost about $1,100 per household annually and raise about $1.9 trillion over 10 years[7]
3. Sep 10, 2026Tax Foundation: the forced-labor tariffs will collect $805.6 billion in direct customs duties over 2026-2035 before income- and payroll-tax offsets ($571.6 billion in net revenue on a conventional basis), and will reduce long-run GDP 0.1% and hours worked by the equivalent of 123,000 full-time jobs[8]
4. Jul 24, 2026Importers including Burlap & Barrel and Learning Resources sued in the Court of International Trade on July 24, arguing USTR set rates first to replicate the invalidated IEEPA tariffs[10]
5. Aug 3, 202625 states sued in the Court of International Trade on August 3, calling the forced-labor rationale a pretext to revive tariffs the Supreme Court struck down; the White House defended the action as a lawful response to unfair trade practices[9]

Why this is rated severe

A 10-12.5% tariff on goods from 60 economies that supply 99.4% of US imports puts a broad, ongoing tax on US importers and consumers. It is the third successive global tariff regime, after the IEEPA tariffs were struck down and the Section 122 surcharge expired.

took effect July 24, 2026; challenged at the Court of International Trade by importers and 25 states

Sources [10]