This Presidential Memorandum issued by President Donald J. Trump directs the United States Trade Representative (USTR) to implement Section 301 tariffs on 60 economies due to their failure to enact or effectively enforce import prohibitions on goods produced with forced labor.
1. Background & Findings
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Investigation: In March 2026, the USTR launched investigations into 60 trading partners to determine whether their lack of forced labor import bans (or weak enforcement) burdened or restricted U.S. commerce.
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Official Determination: In June 2026, the USTR formally concluded that these practices were unreasonable and actionable under Section 301 of the Trade Act of 1974.
2. Tariff Structure
The memorandum outlines a tiered ad valorem tariff structure based on each trading partner’s legal framework or commitment level:
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10% Tariff Rate: Applied to economies that have already enacted forced labor bans, signed reciprocal trade agreements committing to bans, or established partial enforcement regimes. Countries in this tier include Canada, Mexico, Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Pakistan, Sri Lanka, Trinidad and Tobago, and the United Kingdom.
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Capped Net-of-MFN Tariffs: For certain key trading partners, the tariff rate is calculated by subtracting the Most-Favored-Nation (MFN) rate:
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European Union & Taiwan: Capped so the sum of MFN and Section 301 tariffs equals 10% (zero if MFN is already $\ge 10\%$).
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Japan, South Korea, & Switzerland: Capped so the combined total equals 12.5% (zero if MFN is already $\ge 12.5\%$).
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12.5% Tariff Rate: Applied to all other investigated economies that lack formal forced labor regimes or commitments.
3. Product Exemptions & Textile TRQs
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Targeted Exemptions: Specific goods identified in the Annex are exempt from these tariffs. This includes critical raw materials facing domestic shortages, items that would cause economy-wide disruptions, goods that cannot be produced in sufficient quantities in the U.S., and products from countries taking active steps toward anti-forced-labor commitments.
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Textile & Cotton Tariff-Rate Quotas (TRQs): The memorandum authorizes 3-year TRQs for Bangladesh, Cambodia, Indonesia, and Malaysia. These quotas allow a designated volume of apparel and textile imports into the U.S. tariff-free if those countries import U.S. cotton and textile inputs, encouraging them to shift away from forced-labor-tainted supply chains.
4. Strategic Goal
The primary objective of these measures is to pressure international trading partners to pass and rigorously enforce their own import prohibitions on goods made with forced labor, effectively isolating forced labor practices out of global supply chains.
Based on the Presidential Memorandum and official announcements regarding this action, here are the details regarding the effective date and how these tariffs stack up.
Effective Date
The Section 301 forced labor tariffs officially went into effect at 12:01 a.m. Eastern Time on Friday, July 24, 2026.
Note on the Grace Period: There was a limited "in-transit" exception. Goods that were already loaded onto a vessel and in final transit before 12:01 a.m. ET on July 24 were not subject to these new duties, provided they formally entered the U.S. for consumption before 12:01 a.m. ET on Tuesday, July 28, 2026.
Are the Tariffs Cumulative?
For most of the 60 economies on the list, yes, the tariffs are cumulative. They act as additional duties applied on top of standard Most-Favored-Nation (MFN) rates (also known as Column 1 rates) and any other existing trade remedies.
However, the Memorandum establishes a specific "Net of MFN" exception for five trading partners. For these economies, the tariff is capped rather than strictly cumulative:
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European Union and Taiwan: The combined tariff is capped at 10%. If an imported product's existing MFN duty is less than 10%, the Section 301 duty makes up the difference so the total equals 10%. If the MFN duty is already 10% or higher, the Section 301 duty is 0%.
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Japan, South Korea, and Switzerland: The combined tariff is capped at 12.5%. If the existing MFN duty is less than 12.5%, the Section 301 duty bridges the gap to reach exactly 12.5%. If the MFN duty is 12.5% or higher, the Section 301 duty is 0%.
