USTR Proposes New Section 301 Tariffs on 60 Countries as Section 122 Duties Near Expiration

Why It Matters

The proposal could raise import costs across multiple sectors and create compliance complexity, especially if future Section 301 investigations stack with the new tariffs.

Key Takeaways

• USTR proposes 10% or 12.5% tariffs on 60 nations.
• Section 122 10% tariffs expire late July, prompting new measures.
• Refunds for $166 billion IEEPA duties now processed via CAPE.
• Retailers argue tariffs aren’t effective tool against forced labor.
• Potential stacking of Section 301 duties could push rates above 20%.

Pulse Analysis

The United States’ 10 percent Section 122 duties, imposed after the Supreme Court struck down the Trump‑era IEEPA tariffs, are set to lapse in late July. Those duties were justified as a short‑term fix for a widening balance‑of‑payments gap and to curb fentanyl flows. In April, Customs and Border Protection launched the CAPE portal, allowing more than 330,000 importers to claim refunds on roughly $166 billion of IEEPA‑collected duties—the largest recovery effort in recent memory. The refund timeline remains uncertain, prompting firms to hedge against possible cash shortfalls.

USTR’s latest proposal would extend Section 301 authority to 60 additional economies, targeting goods produced with forced labor. Countries that have enacted or committed to a forced‑labor import ban would face a 10 percent levy, while all others would be hit with a 12.5 percent duty. The agency also floated a textile‑specific mechanism that could lower rates for a limited volume of apparel and fabric imports. Analysts warn that if the parallel structural‑excess‑capacity investigations result in separate Section 301 actions, duties could stack, potentially pushing effective tariffs above 20 percent for some products.

Retail groups such as the NRF argue that tariffs are a blunt instrument for eradicating forced labor, preferring collaborative compliance programs with suppliers. Importers, however, are being urged to treat any duty—whether under Section 122, IEEPA or the forthcoming Section 301—as a permanent cost of doing business, adjusting pricing and supply‑chain strategies accordingly. The uncertainty around potential duty stacking adds pressure on manufacturers to certify labor practices, while the looming refund delay could tie up tens of billions in working capital, reshaping cash‑flow planning for U.S. importers.