On July 24, 2026, the United States imposed a fresh round of tariffs on goods from 60 trading partners, citing Section 301 of the Trade Act of 1974. Imported goods are subject to a baseline duty of 10% or 12.5%, depending on the trading partner’s efforts to address alleged forced labor practices. A temporary 10% global tariff that was applied as a stopgap expired on July 24.1
Tariffs are taxes on imported goods, which the current administration has focused on to raise revenue, support domestic industries, coax manufacturers to invest in U.S. facilities, and to use as a bargaining chip in trade negotiations. Article I of the Constitution gives Congress the “power of the purse”— exclusive authority to tax and spend. However, some tariff-setting power has since been delegated to the President through laws such as the 1977 International Emergency Economic Powers Act (IEEPA), the 1974 Trade Act, and the 1962 Trade Expansion Act, among others.
Under Section 301 of the Trade Act of 1974, tariffs may be imposed on specific countries following an investigation by the U.S. Trade Representative (USTR) and a finding of trade practices or policies deemed unfair or discriminatory. Since 2018, China has been subject to tariffs on thousands of products due to unfair technology transfers and intellectual property practices. In March 2026, the USTR initiated investigations into forced labor practices and excess capacity involving dozens of U.S. trading partners, laying the groundwork to replace the IEEPA tariffs imposed by Trump in early 2025 that were later struck down by the U.S. Supreme Court.2
Section 301 rates and exemptions
The USTR found that 41 trading partners have failed to adopt forced labor import prohibitions, making them subject to a 12.5% tariff rate (including China, Japan, South Korea, Vietnam, Australia, Norway, and Switzerland). A 10% tariff rate applies to 19 trading partners that have made commitments to adopt and effectively enforce forced labor bans (including the European Union, United Kingdom, Mexico, Canada, Taiwan, and India).
For five U.S. trading partners with existing reciprocal trade arrangements (the European Union, Taiwan, Japan, South Korea, and Switzerland), the Section 301 tariff is calculated so that the combined most favored nation tariff and Section 301 tariff is set at and does not exceed the specified 10% or 12.5% ceiling. For the other 55 trading partners, the applicable tariff is imposed as a flat additional rate.
These 60 trading partners cover about 99% of all U.S. imports. However, the forced labor tariffs will not apply to a wide range of goods. Products that are already subject to tariffs under Section 232 of the Trade Expansion Act of 1962, which authorizes tariffs on imports that threaten U.S. national security, are fully exempt, along with goods covered by free-trade agreements such as the United States–Mexico-Canada Agreement (USMCA).
Informational materials and humanitarian donations are exempted, as are goods for personal use in the accompanied baggage of persons entering the United States.
The USTR identified the following types of specific products that might also qualify for exemptions:
- Products (including raw materials) for which the tariff might cause domestic supply shortages or broader economic disruption
- Products that cannot be grown or produced in sufficient quantities in the United States or sourced from other suppliers
- Products for which the tariff would not meaningfully advance the elimination of forced labor practices
- Products for which an exemption from tariffs would encourage countries/economies to enact and enforce forced labor prohibitions 3
Hundreds of specific products were added to the USTR’s final list of exemptions after public comments were considered. One trade economist estimates that about half of all U.S. imports have been exempted from the forced labor tariffs.4
On July 22, 2026, a Section 301 tariff of 25% was placed on a wide array of Brazilian goods after the USTR concluded that certain Brazilian regulations and policies are unreasonable and burden U.S. commerce. (Key exemptions include coffee and beef.)5
Another Section 301 investigation into policies and practices that contribute to structural excess capacity, and covering 16 trading partners, is ongoing.6
Beyond the onslaught of new forced labor tariffs, there are others that could take effect in the coming weeks and months.
Unprecedented Section 338 tariff threat
On July 20, 2026, President Trump invoked Section 338 of the 1930 Tariff Act to place a 50% tariff on roughly $20 billion worth of Canadian goods in response to what he describes as Canada’s unfair treatment of U.S. dairy, alcohol, and cars. Section 338 — which no president has utilized before — allows the president to impose duties up to 50% on imports from countries that directly or indirectly discriminate against U.S. products. Beginning August 19, 2026, hundreds of Canadian products could face the costly 50% levy, including plywood, cement, beer, wine, and hockey sticks.7
Old and new Section 232 tariffs
In 2025, the United States imposed tariffs on products for which imports were found to pose a threat to national security, including the following: cars and parts (25%); medium-heavy trucks (25%); buses (10%); steel, aluminum, and copper products (up to 50%, depending on metal content); and lumber and wood products (10% to 25%).8
Effective January 2026, a 25% tariff applies to a narrow set of advanced semiconductors, or computing chips.9
A 100% tariff applies to patented pharmaceuticals, designed as a “structural reset” to force onshoring. These duties took effect on July 31, 2026, for designated major drugmakers and will take effect September 29, 2026, for other importers. There are key exceptions for orphan drugs, biosimilars, generics, and voluntary deals.10
However, on July 21, 2026, Trump announced that a 100% tariff will be placed on generic pharmaceuticals starting in August 2028, allowing time for drugmakers to move production to the United States. The tariff rate would increase to 200% after one year.11
Potential impact on consumers and businesses
A major concern for the U.S. economy is whether tariffs will cause prices to rise more than consumers can bear, forcing them to pull back on spending. The June 2026 inflation report showed that the personal consumption expenditures (PCE) price index climbed 3.7% over the previous year, well above the Fed’s 2.0% target.12 Under current law, tariffs are projected to cost U.S. households an average of $1,100 annually, according to the Budget Lab at Yale.13
If U.S. companies must pay a 10% tariff on imported goods, their actual costs may not increase by the full 10%, because foreign exporters may lower their prices to remain competitive. Still, it could cost substantially more for U.S. businesses to import foreign products or the widely used raw materials (such as metal and lumber) needed for domestic production.
Healthy corporate profits suggest that large companies have been able to adjust their operations and/or pass tariff costs on to consumers, while many smaller companies that rely on imports likely had more trouble coping with cascading tariffs. It’s still unknown whether the forced labor tariffs will withstand legal challenges, although the overall framework is generally viewed as more resilient than the invalidated IEEPA tariffs.14
Projections are based on current conditions, subject to change, and may not come to pass.
1–3, 5–6) U.S. Trade Representative, 2018 and 2026
4) The New York Times, July 30, 2026
7) Reuters, July 20, 2026
8, 13) The Budget Lab at Yale, 2026
9–10) The White House, 2025–2026
11) The Wall Street Journal, July 21, 2026
12) U.S. Bureau of Economic Analysis, 2026
14) The Wall Street Journal, July 24, 2026
Prepared by Broadridge Advisor Solutions. © 2026 Broadridge Financial Services, Inc.