Section 301, One Year In: Where 2026 Trade Policy Actually Stands

The Legal Foundation Didn’t Move

On February 20, 2026, the Supreme Court struck down the reciprocal tariffs President Trump had imposed under the International Emergency Economic Powers Act, or IEEPA. That ruling made headlines, and for good reason. It didn’t touch Section 301. Section 301 tariffs run on a different legal track entirely, authorized under the Trade Act of 1974 rather than emergency powers, and the U.S. Court of Appeals for the Federal Circuit had already upheld their legality on two major product lists back in September 2025. While the IEEPA tariffs got knocked out, Section 301 kept running in the background the entire time. IEEPA-based tariffs can disappear with a single court ruling. Section 301 tariffs, grounded in a different statute and already tested in court, don’t work that way.

Section 122 Expired. Something Else Took Its Place.

After the IEEPA ruling, President Trump moved fast. On February 24, 2026, he invoked Section 122 of the Trade Act of 1974 to impose a temporary 10 percent tariff on most imports. Section 122 has a hard statutory ceiling: 150 days, capped at 15 percent. That clock ran out on July 24, 2026. In May, the Court of International Trade had separately ruled the Section 122 tariff unlawful on other grounds, though the point was largely academic by then. The tariff was set to expire on its own schedule regardless of how that case turned out.

USTR didn’t let the rate drop when Section 122 expired. It replaced it the same day with a new Section 301 duty tied to a forced-labor finding against 60 trading partners. For a buyer who was tracking Section 122’s expiration as a cost relief date, the actual result was a rate increase covered by a different legal mechanism. The lesson isn’t about this specific swap. It’s that tariff relief on paper doesn’t always translate to tariff relief on your invoice, especially when multiple overlapping authorities are all live at once.

The Forced-Labor Tariffs, by the Numbers

USTR opened this investigation on March 12, 2026, examining whether 60 economies, accounting for well over 90 percent of U.S. import volume, were failing to prohibit or enforce prohibitions on goods made with forced labor. On June 2, USTR determined all 60 economies came up short and proposed tariffs. After a second comment period and a three-day public hearing in early July, the tariffs took effect July 24, 2026: a 12.5 percent duty on 46 trading partners, including China, and a 10 percent duty on the remaining 14, mostly countries that had already made commitments on forced-labor enforcement. This is not a flat rate across all 60 countries, and it’s worth checking which bucket your country of origin actually falls into. Legal analysts at the Thomson Reuters Institute have noted these tariffs carry more staying power than the IEEPA tariffs they replaced, since the underlying justification, forced-labor enforcement, has bipartisan support in Washington that a straight tariff dispute doesn’t.

Where the Older Section 301 Rates Still Sit

None of this replaced the Section 301 tariffs that have applied to Chinese goods since 2018. Lists 1 through 3 still carry a 25 percent rate, List 4A sits at 7.5 percent, and both stack on top of your base HTS duty rather than replacing it. Strategic sectors carry higher rates still: electric vehicles at 100 percent, semiconductors phased up to 50 percent as of January 2025. Section 232 duties on steel, aluminum, copper, and vehicles run on their own separate track and layer on top of all of it. If you haven’t checked your specific ten-digit HTS classification against the current list this year, the rate you’re quoting internally is probably stale.

The Exclusions Clock Is Running

178 product exclusions, covering categories like solar manufacturing equipment, certain machinery components, plastic films, electric motors, and medical devices, are currently active. They were extended through November 10, 2026, as part of the trade agreement reached at the Trump-Xi summit on November 1, 2025. USTR has already signaled these exclusions won’t all be renewed. If your sourcing plan depends on an exclusion-protected HTS code, November 10 is the date to build around, and the time to have a parallel sourcing plan ready is now, not in October.

The Investigation Still to Come

The forced-labor tariffs aren’t the only Section 301 action in motion. A day before that investigation opened, on March 11, 2026, USTR launched a separate investigation into structural excess manufacturing capacity across 16 economies, including China, the EU, Japan, Korea, Mexico, and Vietnam. That investigation has been working through comment periods and hearings since May. No tariff proposal has been published as of this writing, but trade attorneys at Holland & Knight told Sourcing Journal in early August that they expect USTR to issue a proposal within weeks, with final tariffs likely stacking on top of the forced-labor duties toward the end of 2026. Unlike Section 122, Section 301 tariffs carry no built-in expiration or rate cap. Whatever comes out of this investigation is likely to stay for a while.

What Manufacturers Are Saying

This isn’t an abstract policy fight for the manufacturing sector. The National Tooling and Machining Association has flagged that machine tools and equipment, key inputs for precision machining shops, are directly exposed to these tariff actions. The National Association of Manufacturers has spent much of 2026 pushing USTR for a clearer, more accessible exclusion process, arguing that without one, tariffs stifle the same domestic production the policy is meant to protect. Neither group is arguing the tariffs will disappear. Both are arguing for a way to manage them.

What This Means for Your Next Quote

None of this changes the core sourcing question: does the total landed cost, tariffs included, still make sense against your alternatives. What’s changed is how often that answer needs rechecking. A rate that was accurate in January wasn’t accurate by July, and it may not be accurate by December if the excess capacity tariffs land as expected. If your sourcing strategy depends on a single vendor relationship or a single country of origin, this is the kind of environment where that concentration gets expensive fast.

We track this because our customers ask us to, not because we sell tariff advice. What we can do is give you options across a vetted network of domestic and offshore vendors, so a rate change doesn’t leave you stuck. Send us the drawings and we’ll walk you through where your part can be sourced today, tariffs and all.

Sources

• U.S. Trade Representative, “Initiation of Section 301 Investigations Relating to Structural Excess Capacity and Production in Manufacturing Sectors,” March 11, 2026 (ustr.gov)
• Congressional Research Service, “Legal Authority for Section 301 Tariffs to Address Forced Labor and Excess Manufacturing Capacity,” Legal Sidebar LSB11460, July 21, 2026
• Holland & Knight, “And the (Tariff) Beat Goes On: New Section 301 Forced-Labor Tariffs Imposed on 60 Countries,” July 2026
• Holland & Knight via WWD/Sourcing Journal, “More Section 301 Tariffs Are Coming. What Should Businesses Do to Prepare?,” August 2026
• Thomson Reuters Institute, “Why Section 301 Tariffs Won’t Go Away So Fast,” July 2026
• National Tooling and Machining Association, “Section 301, the Tariff Changes Coming This Summer,” June 2026
• National Association of Manufacturers, trade policy statements and USTR comment filings, 2026
• Great Lakes Customs Law, Section 301 exclusions tracker, updated April 2026
• White & Case LLP, “USTR Initiates Section 301 Investigations of 16 U.S. Trade Partners Targeting Industrial Excess Capacity,” March 2026
• Covington & Burling LLP, “USTR Announces Findings and Calls for Comments in Section 301 Forced Labor Investigation,” June 2026