Policy Update: U.S. Section 301 (12.5%) and Section 232 Measures 2026 — Who Bears the Cost on China-Origin Goods 

Issued by: Global Vertical Officer

Category: Global Trade & Compliance

1. Background​

Following the U.S. Supreme Court’s February 2026 decision limiting the use of IEEPA-based tariffs, the U.S. administration restructured its trade measures against China-origin and other imported goods.

Two tools now matter most for buyers importing from China:

· New Section 301 “forced-labor” action: announced by USTR on July 23, 2026; effective 12:01 a.m. ET, July 24, 2026.

For China-mainland and Hong Kong-origin goods not otherwise exempted, this adds up to 12.5%​ on top of existing duties.

It stacks with legacy Section 301 tariffs but does not stack​ with Section 232 where 232 already applies.

· Section 232 national-security tariffs: revised effective April 6, 2026, with further adjustments from June 8, 2026.

These cover steel, aluminum, copper, autos/parts, semiconductors and related derivatives, generally at 25%–50%​ of customs value.

The prior Section 122 10% global surcharge​ expired on July 24, 2026​ and was effectively replaced by the new Section 301 framework for affected economies.

2. Key transition dates

· Feb 24, 2026​ – Section 122 10% global surcharge took effect.

· Apr 6, 2026​ – Section 232 recalculated on full customs value of covered metal/auto/semiconductor goods.

· Jul 24, 2026, 12:01 a.m. ET​ – New Section 301 12.5% measure on China/HK-origin goods takes effect.

· Jul 28, 2026, 12:01 a.m. ET​ – cutoff for in-transit relief: goods laden before Jul 24 and entered before Jul 28 avoided the new 301 surcharge.

· Dec 31, 2027​ – current transitional Section 232 rates for certain industrial/grid equipment expire (standard 232 authorities otherwise remain in force).

3. Who actually pays the new 12.5% Section 301 / Section 232 duty?​

Under U.S. customs law, the U.S. Importer of Record pays duties to CBP​ — not the Chinese factory, not the freight forwarder.

In commercial terms:

· The statutory payer​ is the U.S. importer.

· The economic burden​ is negotiated: it can sit with the supplier (via lower FOB price), the U.S. buyer (higher landed cost / lower margin), or the end customer (higher resale price).

· Our standard position:

· EXW / FOB China: supplier is not the duty payer; U.S. importer bears the customs liability.

· DDP to U.S.: the China-side exporter quotes inclusive of estimated U.S. duties, but the Importer of Record still owns compliance and any CBP reassessment risk.

· Section 232 goods​ (steel/aluminum/copper/autos/semis): new 301 12.5% generally does not​ add on top; the 232 layer is the dominant cost.

· Non-232 Chinese goods: typical stack is MFN + legacy 301 + new 301 12.5%.

4. What this means for our customers

· U.S. buyers should re-check landed-cost models for China-origin SKUs.

· HTS classification, country-of-origin evidence, and 232/301 exemption lists must be validated before PO release.

· Products already under Section 232 are not “getting an extra 12.5%” — but they are not getting relief either.

· Pharma preparations / specified APIs may be exempt from the new 301 layer; steel/aluminum/copper/auto parts are generally inside the 232 layer.

5. Our commitment​

As Global Vertical Organization, we are updating category playbooks, origin-documentation checklists, and customer quotations so that:

1. duty responsibility is stated explicitly in each contract,

2. China-to-U.S. quotes show base price, estimated U.S. duty, and Incoterm,

3. no customer is surprised by Section 301 / Section 232 stacking rules after July 24, 2026.

For HS-code-level impact on your category, contact your vertical account lead.

— Global Vertical Officer