Administration replaces expired 10% global tariff with Section 301 regime across 60 countries, sets new rates

The Trump administration’s temporary 10% global tariff did not simply lapse on July 24. At 12:01 a.m. Eastern on Friday, July 24, it was replaced by a new Section 301 tariff system that applies rates of 10% or 12.5% to 60 trading partners, according to the Office of the U.S. Trade Representative. USTR said the action covers the top 60 U.S. trade partners and 99.4% of U.S. imports. The new duties are tied to a months-long investigation into whether those economies prohibit imports made with forced labor. ### If the 10% tariff expired, why are importers still paying new duties? Section 122 tariffs expired on July 24, but USTR finalized a replacement under Section 301 on July 23, with the new rates taking effect immediately as the old ones ended. EY said the change established a new Section 301-based framework as the temporary Section 122 duties expired. Yahoo Finance reported the administration said the shift was meant to avoid added complexity from a gap between tariff regimes. (ustr.gov) Ambassador Jamieson Greer took the final action at President Donald Trump’s direction, USTR said in its fact sheet. The agency said 19 covered trading partners face a 10% additional ad valorem rate and 41 face a 12.5% rate, with five partner economies subject to blended and capped treatment described in the formal tariff schedule. (finance.yahoo.com) ### Why are some countries at 10% and others at 12.5%? USTR said the tariff split is based on whether a trading partner has made commitments to adopt and effectively enforce forced-labor import prohibitions. Countries that have made those commitments receive the 10% rate, while countries that have not adopted such a prohibition face the 12.5% rate, according to the USTR fact sheet and EY’s summary of the final action. (ustr.gov) Yahoo Finance reported that the 12.5% group includes economies ranging from China to Australia to Egypt, while the 10% group includes the European Union, Indonesia and Mexico. USTR framed the policy as a response to what it called the failure of covered economies to impose and enforce bans on goods produced with forced labor. (ustr.gov) ### Does this apply to everything coming into the United States? The new tariffs are broad, but they are not universal. Yahoo Finance reported that goods already covered by separate Section 232 national security tariffs, including steel and aluminum, are exempt from the new Section 301 action, preventing those duties from stacking. EY said the measure also contains specified product exclusions and other carveouts. (finance.yahoo.com) USTR and Yahoo Finance said goods covered by the U.S.-Mexico-Canada Agreement remain largely tariff-free, and the administration also exempted some products to limit economic disruption. Yahoo Finance cited examples including oil, natural gas and some goods not produced in the United States, such as cork from Europe. (finance.yahoo.com) ### Why did copper traders rush metal into U.S. ports? More than 200,000 tonnes of copper were shipped into U.S. ports in July as traders rushed to get ahead of anticipated levies, according to the South China Morning Post. The report said the inflow reflected efforts to front-load shipments before tariff terms became clearer and before any further policy changes. That movement shows how importers responded not only to the tariff level but to uncertainty over timing, exemptions and durability. (finance.yahoo.com) Yahoo Finance reported a senior administration official said the government was implementing the new system “to avoid complexity” and argued that steady tariff rates would be better for businesses. (scmp.com) ### What should companies watch next? USTR said the action is set out in the agency’s fact sheet and formal notices covering country treatment, exemptions and tariff classifications. EY said the additional duties are assessed under new Harmonized Tariff Schedule subheadings 9903.05.20 through 9903.05.84, with the operative date beginning at 12:01 a.m. Eastern on July 24. Importers now have to match country-specific rates, product exclusions and existing trade-program treatment to individual shipments. (finance.yahoo.com) (ustr.gov)