How Duty Drawback Can Help Recover the Cost of Forced-Labor Tariffs

On July 24, 2026, a new set of Section 301 tariffs took effect that few supply chains can sidestep. Following investigations opened on March 12, 2026, the Office of the U.S. Trade Representative asserted that dozens of trading partners were failing to impose or enforce bans on goods made with forced labor.

The response was sweeping. The action covers all products from roughly 60 economies, including Canada, Mexico, the European Union, United Kingdom, China, India, Japan and Switzerland, at an added rate of either 10% or 12.5% depending on the country of origin.

For importers, the immediate concern is cost. These are additional duties, and for most goods they’re layered on top of the rates that importers already owe. There are exemptions, and USTR added hundreds of products to that list before the effective date, covering items such as certain seeds, fertilizer and pesticide inputs, semiconductor manufacturing equipment, pharmaceuticals and used clothing. Even so, the majority of goods from the listed economies now carry the extra charge.

It's worth being precise about what these tariffs are. They’re trade-remedy duties assessed under Section 301 of the Trade Act of 1974. They’re not the same as the forced-labor import prohibitions enforced under Section 307 of the Tariff Act or the Uyghur Forced Labor Prevention Act, which stop non-compliant goods at the border entirely. The Section 301 tariffs apply to goods that are admissible and lawfully entered. That distinction matters, because duties paid on lawfully entered goods can often be recovered later. Goods barred from entry cannot.

This story was originally published by SupplyChainBrain. Read the full story at SupplyChainBrain →