The temporary 10% surcharge expired, but broad landed-cost relief did not follow. A new Section 301 structure now reaches 60 economies, with materially different rate and exemption rules.
The most important U.S. import-cost change of the summer was not
simply a tariff increase. It was a change in legal authority, entry
codes and product treatment that occurred at the same minute.
At 12:01 a.m. Eastern time on July 24, 2026, the temporary 10% import
surcharge imposed under Section 122 reached its scheduled end. At that
same time, a new Section 301 tariff regime took effect across 60
investigated economies that the Office of the U.S. Trade Representative
says account for 99.4% of U.S. imports.
For many importers, the result was not a return to the pre-surcharge
duty structure. It was a replacement structure: generally 10% for 17
economies, generally 12.5% for 38, and combined-rate treatment for the
European Union, Taiwan, Japan, South Korea and Switzerland. Product
exemptions, Section 232 treatment and country-specific Harmonized Tariff
Schedule instructions can change the result at the line-item level.
That distinction is where the operational risk sits. A company can
understand the headline and still enter goods incorrectly, misstate
landed cost, misprice inventory or give a customs broker outdated
instructions.
What changed on July 24
The White House imposed the Section 122 surcharge in February for the
statutory maximum of 150 days. Its implementing proclamation stated that
the 10% duty would run through 12:01 a.m. Eastern time on July 24 unless
Congress extended it.
On July 23, USTR announced final action in 60 separate Section 301
investigations concerning whether trading partners had imposed and
effectively enforced prohibitions on imports made with forced labor. The
accompanying White House memorandum and 55-page tariff annex made the
new treatment effective for goods entered for consumption—or withdrawn
from warehouse for consumption—on or after 12:01 a.m. Eastern time on
July 24.
The default treatment is divided into three groups:
- Generally 10% additional Section 301 duty: 17
economies, including Canada, Mexico, India, Bangladesh, Cambodia,
Indonesia, Malaysia and the United Kingdom. - Generally 12.5% additional Section 301 duty: 38
economies, including China, Hong Kong, Vietnam, Thailand, the
Philippines, Singapore, Australia and Brazil. - Combined-rate treatment: Goods from the European
Union and Taiwan are generally brought to a combined most-favored-nation
and Section 301 rate of 10%; goods from Japan, South Korea and
Switzerland are generally brought to 12.5%. If the underlying MFN rate
already meets or exceeds the applicable threshold, the new Section 301
duty may be zero.
These are default rules, not a substitute for an entry review. USTR
expressly excluded informational materials, donations and accompanied
baggage; articles and parts already subject to Section 232 tariffs; and
numerous products identified in the annex. The exemption schedules
include certain raw materials, products that could create economy-wide
disruption, goods unavailable in adequate domestic supply and other
specified articles.
For textile and apparel imports from Bangladesh, Cambodia, Indonesia
and Malaysia, USTR also directed future tariff-rate quotas tied to the
use of U.S. textile or cotton inputs. The memorandum said the mechanism
should become feasible by September 1. Until USTR establishes those
quotas and publishes an effective date, the applicable 10% Section 301
tariff continues on the covered imports.
Why the
headline can mislead landed-cost planning
Much of the public discussion treated July 24 as either the
expiration of a global tariff or the beginning of a new forced-labor
tariff. Both descriptions are incomplete for an operating company.
The more useful question is: What changed for this country of
origin, this HTS line, this entry date and this exemption
status?
The old Section 122 surcharge and the new Section 301 duties do not
have identical legal foundations or implementing instructions. A product
exempted under one structure is not automatically exempted under the
other. Goods from China that fall under the new default treatment use a
different Chapter 99 provision than goods from Canada, Mexico or the
European Union. The five combined-rate economies require a calculation
rather than a simple flat addition.
That makes the transition more than an accounting issue. It can
affect:
- purchase-order economics and supplier negotiations;
- customs bonds and duty cash requirements;
- inventory valuation and margin forecasts;
- routing through foreign-trade zones or bonded facilities;
- the timing and viability of sourcing changes;
- customer price commitments made before July 24; and
- demand for ocean, air, drayage, intermodal and truckload capacity
when importers alter origin or timing.
Freight providers should expect the consequences to be uneven. A
tariff applied to most goods from an economy can reduce or accelerate
specific trade lanes without producing a uniform decline in total
freight. Exemptions and combined-rate treatment may preserve some flows
while sharply changing others.
The
legal challenge adds uncertainty—not an operating exemption
Two U.S. small businesses filed a challenge in the U.S. Court of
International Trade on July 24, arguing that the administration used
Section 301 to recreate a broad tariff program without the country- and
practice-specific findings the statute requires. The government
maintains that USTR completed 60 investigations, reviewed more than
1,600 written comments, held public hearings and selected remedies
designed to change the identified foreign practices.
That dispute matters, but it should not be confused with current
entry treatment. At the time of publication, the official Section 301
action and HTS modifications remain the operative instructions.
Importers should not stop paying or coding duties based solely on the
existence of litigation.
The prudent response is to preserve options: maintain entry-level
documentation, monitor liquidation dates, track the challenged duties
separately and obtain customs or trade counsel on protest and
refund-preservation strategy. Companies should neither assume the
tariffs are permanent nor budget as if a future refund is
guaranteed.
A seven-step importer audit
1. Build a SKU-country-HTS
matrix
List every active imported SKU with its country of origin, base HTS
classification, ordinary duty rate, applicable Chapter 99 provision,
Section 232 exposure and claimed exemption. Do not audit only by
supplier or purchase order.
2.
Reconcile broker instructions issued before July 24
Confirm that customs brokers removed expired Section 122 coding and
applied the correct Section 301 provision. Review actual entry summaries
rather than relying only on a written assurance.
3. Verify exemptions
against the annex
Broad descriptions such as “electronics,” “raw material” or “medical
product” are not enough. Match the precise HTS provision and any
conditions in the official annex.
4. Recalculate landed
cost at line level
Update duty, merchandise processing, harbor maintenance, brokerage,
bond, transportation and financing costs. For the five combined-rate
economies, model the underlying MFN rate before adding any Section 301
amount.
5. Review contracts
and price commitments
Identify who bears a tariff change under current purchase orders,
Incoterms and customer agreements. Escalate ambiguous provisions before
the next shipment, not after an invoice dispute.
6. Preserve the litigation
record
Track entry number, entry date, liquidation status, duty amount and
the specific Section 301 code used. Coordinate any protest strategy with
qualified customs counsel; do not rely on a generalized expectation of
refunds.
7.
Stress-test sourcing changes before moving freight
Compare total landed cost, supplier reliability, origin
substantiation, transit time, port and drayage capacity, minimum order
quantities and inventory exposure. A nominally lower tariff does not
automatically create a lower-risk supply lane.
What
shippers, brokers, carriers and executives should do
Importers and shippers should complete the entry
audit first and then update procurement, inventory and transportation
forecasts. Customs classification and freight planning should use the
same SKU-level assumptions.
Freight brokers and forwarders should prepare for
lane-specific volume changes, but avoid presenting transportation advice
as customs advice. When a customer changes origin or routing, validate
lead time, transload, drayage and final-mile capacity before pricing the
move.
Carriers should watch for shifts in port, border and
inland-market demand rather than assuming a uniform import slowdown. The
tariff structure can redirect freight as easily as it suppresses it.
Executives and finance teams should maintain at
least three scenarios: current duties remain in place; selected
exemptions or trading-partner treatment change; or litigation alters
collection or refund rights. Each scenario should connect duty exposure
to working capital, gross margin and transportation demand.
Executive takeaway
The July 24 event was a tariff reset, not a clean tariff expiration.
Broad import-cost exposure continued under a new statute, with different
country tiers, product exemptions and entry requirements—and with active
litigation creating a second layer of uncertainty.
The immediate management task is not to predict the court. It is to
make sure every affected entry, landed-cost model and freight plan is
using the correct rule today while preserving the records needed if the
rule changes tomorrow.
Discussion prompt: Has your organization completed a
post–July 24 entry audit, or are procurement, customs and transportation
teams still working from different tariff assumptions?
For independent, source-linked transportation intelligence built for
decisions, subscribe free to the Freight Intel Report.
Sources and dates
- Office
of the U.S. Trade Representative: Final Section 301 action, July 23,
2026. - USTR
fact sheet: rates, scope and exclusions, July 2026. - White
House memorandum directing the Section 301 actions, July 23,
2026. - Official
55-page HTS annex, effective July 24, 2026. - White
House proclamation imposing the temporary Section 122 surcharge,
February 20, 2026. - Liberty
Justice Center: Burlap & Barrel, Inc. et al. v. Greer, filed
July 24, 2026.
This analysis is for general informational purposes and is not
legal or customs advice. Importers should consult a licensed customs
broker or qualified trade counsel about specific entries.
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