Section 122 Expired on July 24. Section 301 Forced Labor Duties Replaced It the Same Minute
On 24 July 2026 the Section 122 global surcharge lapsed and Section 301 forced labor duties took over across 60 economies at 10 or 12.5 percent. Here's what changed for FBA importers.
The Section 122 global surcharge ended at 12:01 a.m. eastern time on 24 July 2026, when its 150 day statutory life ran out. Section 301 forced labor duties took effect at the same moment. There was no gap.
If you import into the United States and sell on Amazon, your duty line changed that minute, and for most sellers it changed by less than the headlines suggest.
What Section 122 was, and what it actually cost
Section 122 of the Trade Act of 1974 lets a president impose a temporary import surcharge to address a balance of payments problem, capped at 15 percent ad valorem and limited to 150 days without an act of Congress. Proclamation 11012 of 20 February 2026, published in the Federal Register at 91 FR 9339, used it to impose 10 percent on goods entered for consumption on or after 12:01 a.m. eastern standard time on 24 February 2026.
One correction, because we got this wrong ourselves and so did much of the trade press. The rate was 10 percent for the whole period, from 24 February to 24 July 2026, not 15 percent. The 15 percent figure is the ceiling written into the statute, not the rate that was applied. An increase was announced in early March 2026, but no proclamation ever implemented it, and when the Court of International Trade described the duty in its 7 May 2026 opinion, it described a 10 percent duty. If you've been reserving at 15 percent since February 2026, you've been over-reserving by a third.
Our April countdown to the expiry named a handover to Section 301 with no gap as its base case. That's what happened, though the rates came in lower than it expected.
What replaced it
The Office of the United States Trade Representative, or USTR, concluded a set of Section 301 investigations into whether trading partners were failing to prohibit and enforce against imports made with forced labor. The final action covers 60 economies and took effect for goods entered on or after 12:01 a.m. eastern time on 24 July 2026, under Harmonized Tariff Schedule of the United States (HTSUS) headings 9903.05.20 through 9903.05.84.
MFN means most favoured nation, the ordinary tariff rate the United States applies to trading partners it has normal trade relations with. It's the base rate on your tariff line before any additional layer.
The rate depends on which of four groups your sourcing country sits in, as of 24 July 2026.
| Group | Rate since 24 July 2026 | Economies |
|---|---|---|
| Flat 10 percent | 10 percent of customs value | 17, including India, Indonesia, Malaysia, Cambodia, Bangladesh, Pakistan, Sri Lanka, Mexico, Canada and the United Kingdom |
| Flat 12.5 percent | 12.5 percent of customs value | 38, including China, Vietnam, Brazil and Russia |
| 10 percent net of MFN | capped so MFN plus this duty equals 10 percent | European Union, Taiwan |
| 12.5 percent net of MFN | capped so MFN plus this duty equals 12.5 percent | Japan, Korea, Switzerland |
The cap is the part people get wrong
For the flat groups the arithmetic is simple. A product from China with a free on board, or FOB, price of 10.00 US dollars carries 10.00 times 12.5 percent, which is 1.25 dollars of forced labor duty per unit as of 24 July 2026. That sits on top of MFN and on top of any other layer.
For the five capped economies it's a ceiling rather than an addition. Say your product's MFN rate is 3.4 percent and you source from the European Union. Since 24 July 2026 the forced labor duty isn't 10 percent. It's 10 percent minus 3.4 percent, which is 6.6 percent. On the same 10.00 dollar unit you pay 0.34 dollars of MFN plus 0.66 dollars of forced labor duty, totalling 1.00 dollar, which is exactly 10 percent of customs value. If your MFN rate is already at or above 10 percent, the forced labor duty is zero.
The practical consequence: for European Union and Taiwanese goods, a high MFN line absorbs the new duty entirely while a low MFN line takes the full hit. Two products from the same supplier can move in opposite directions.
Three ways out
As of 24 July 2026 the duty doesn't apply at all in three situations, and they matter more than the rates do.
Your product already carries a Section 232 duty. Section 232 of the Trade Expansion Act of 1962 covers steel, aluminium and copper, their derivative articles, vehicles and vehicle parts, wood products, and semiconductors. Where one of those applies, the forced labor duty is switched off entirely rather than stacked on top, under US note 52(f), heading 9903.05.90. The effect is counter-intuitive: a stainless steel kitchen product from China can now land better against a plastic one from the same supplier than it did before 24 July 2026.
Your goods enter duty free under the United States Mexico Canada Agreement, or USMCA. Products of Canada or Mexico entered free of duty under USMCA are exempt under notes 52(g) and 52(h). That holds regardless of whether the line shows an S or S plus rate in the Special column.
You're entering under chapter 98. Goods properly claimed under a chapter 98 provision are exempt under note 52(a), with four carve outs: subheadings 9802.00.40, 9802.00.50 and 9802.00.60, and heading 9802.00.80, which are charged on the value of the repair or the value assembled abroad instead.
What still stacks on top
The forced labor duty is a new Section 301 action. It doesn't replace the older one; it stacks on top of it. If your product is on one of the 2018 China lists, you pay that too.
A full example on a 10.00 dollar unit from China, as of 24 July 2026, with an MFN rate of 3.4 percent and a legacy List 4 rate of 7.5 percent:
- MFN: 10.00 times 3.4 percent equals 0.34 dollars
- Legacy Section 301: 10.00 times 7.5 percent equals 0.75 dollars
- Forced labor Section 301: 10.00 times 12.5 percent equals 1.25 dollars
- Total duty: 2.34 dollars per unit, an effective rate of 23.4 percent on customs value
Remember that United States customs value is the FOB price alone. Ocean freight and insurance are excluded under 19 CFR 152.103 (CFR is the Code of Federal Regulations), which is different from most countries, where duty is assessed on cost, insurance and freight.
If your container was already on the water
There's an in transit carve out and it's narrow. Goods loaded onto a vessel and in transit on their final mode of transport before 12:01 a.m. eastern time on 24 July 2026, and entered for consumption before 12:01 a.m. eastern time on 28 July 2026, escape the duty. Both conditions have to hold. A container loaded on 20 July 2026 but cleared on 30 July 2026 pays.
One thing that hasn't happened yet
The action directs USTR to establish tariff rate quotas for textile goods from Bangladesh, Cambodia, Indonesia and Malaysia, running an initial three years in two tranches, letting a volume enter free of the forced labor duty. As of 25 July 2026 those quotas don't exist, and until they're established the full 10 percent applies to everything they'll eventually cover. A further Federal Register notice will announce them.
If you source apparel or home textiles from those four countries, that notice is the one to watch.
What to do this week
Pull your last three shipments and recompute them at the rate for your origin as of 24 July 2026. If you source from the European Union or Taiwan, check your MFN rate first, because the cap may mean your duty barely moves. If any of your products carry a Section 232 duty, your forced labor exposure on those lines is zero, and that changes the sourcing comparison you ran six months ago.
Run your numbers through the calculator with your origin and tariff code, and see the whole stack rather than one layer at a time.