New U.S. Tariffs Replace Expiring Section 122 Tariffs

By LES GLICK, CO- CHAIR INTERNATIONAL TRADE PRACTICE GROUP, LGLICK@FENNEMORELAW.COM WASHINGTON, D.C. tel-; 240-447-7796

With the expiration of President Trump’s 10% tariff imposed under Section 122 of the Trade Act of 1974 on July 24, 2026, U.S. Trade Representative Ambassador Jamieson Greer, at the direction of President Trump, took final action in the Office of the U.S. Trade Representative’s (USTR) existing Section 301 Investigations into the acts, policies, and practices of various economies related to the failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor. As a result, the USTR imposed new tariffs of either 10% or 12.5% on imports from 60 trading partners, subject to certain product-specific exemptions. Over 60 countries or over 99% of US imports are potentially affected. While these tariffs are similar percentages as previous ones, they represent a move to more established and legally limited tariffs from the emergency and more easily imposed tariffs represented by earlier actions in 2025 and 2026 and invalidated by the courts.

The Section 122 tariff had itself been declared unconstitutional by the Court of International Trade on May 7, 2026, in a 2-1 decision, now on appeal. Section 122, which was not technically described as an “emergency” tariff, was designed to deal with urgent balance of payments disruptions and was hastily implemented by President Trump after his even broader tariff under the International Emergency Economic Powers Act (IEEPA) was struck down by a 6-3 vote by the United States Supreme Court on February 20, 2026. Section 122 itself was a temporary tariff only authorized to be in effect for 150 days. Its use required the declaration of a national balance of payments crisis, making President Trump the first president to invoke Section 122 in the 52 years since its enactment. The tariffs included several exemptions, including certain agricultural products, critical minerals, and specified pharmaceutical, energy, and petroleum products. Depending on the outcome of the current appeal, companies that paid those duties when the law was in effect could be eligible for refunds.

Unlike the earlier tariffs that were struck down by the courts, the new tariffs are grounded in an established trade policy objective shared by both the Trump and Biden administrations: preventing goods produced with forced labor from entering U.S. supply chains. President Trump first advanced this policy during his first term. As part of replacing the North American Free Trade Agreement (NAFTA) with the United States-Mexico-Canada Agreement (USMCA), his administration secured commitments from Canada and Mexico to adopt their own prohibitions on imports of goods produced with forced labor.

In his second term, President Trump has included adoption of a forced labor import prohibition as a critical component of the Agreements on Reciprocal Trade. To date, 10 trading partners have agreed to enact such a ban in their Agreements on Reciprocal Trade, and other countries have enacted such bans in response to specific investigations in recent weeks.

On December 23, 2021, President Biden signed into law the Uyghur Forced Labor Prevention Act, a bipartisan bill to ensure that goods made with forced labor in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China do not enter the United States market. 

Trading partners that have already committed to adopting and effectively enforcing prohibitions on imports produced with forced labor will be subject to a 10% tariff. These countries include Argentina, Bangladesh, Britain, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, and Trinidad and Tobago.

By contrast, 38 other trading partners, including China, which has been a principal focus of U.S. forced labor enforcement because of its treatment of the Uyghur minority, have not adopted comparable import prohibitions. As a result, imports from those countries will be subject to a 12.5% tariff.

These tariffs will apply to most imports from the covered countries. The following categories of goods are currently exempt:

*Informational materials, donations, and accompanied baggage;

*All articles and parts of articles subject to section 232 tariffs; and

*Certain products which include (i) raw materials that if subject to the proposed additional tariffs could lead to the unavailability of domestic supply; (ii) products that could cause economy-wide disruptions if subject to the proposed additional tariffs; (iii) certain products that cannot be grown or produced in sufficient quantities in the United States or obtained from other sources; (iv) products that if exempted from these tariffs would encourage economies to enact and effectively enforce a forced labor import prohibition; and (v) articles for which additional tariffs may not contribute substantially to the elimination of the acts, policies, and practices determined to be actionable in the investigations.

A complete list of the exempted products and the possible method to obtain new exemptions can be obtained by contacting the author, Les Glick: lglick@fennemorelaw.com.