ALA Tariff Alert: New Section 301 Tariffs Now in Effect

• New tariff rates: Imports from the 60 covered economies will generally face either a 10% or 12.5% Section 301 tariff, depending on whether the exporting country has adopted or committed to stronger forced labor import prohibitions through Agreements on Reciprocal Trade (ARTs) or similar measures. Countries without those commitments generally fall into the 12.5% category.
• Effective date: The tariffs apply to goods entered for consumption beginning 12:01 a.m. ET on July 24, with limited relief for qualifying shipments already in transit before the deadline.
• Products excluded from the new tariffs: Items already subject to Section 232 duties, qualifying USMCA goods, Chapter 98 entries, and exempted products identified by USTR will not be subject to these additional Section 301 duties.

Many lighting products, LED fixtures, portable lamps, ceiling fans, fan accessories, and related electrical components imported from major sourcing countries, including China, Vietnam, Cambodia, Malaysia, Taiwan, and other Asian manufacturing hubs, will continue to face additional import duties if sourced from countries covered by the new Section 301 action. The exact duty will depend on the country of origin, applicable Most Favor Nations (MFN) rate, and whether the product qualifies for any listed exemption.

For lighting manufacturers and importers, the announcement largely maintains the elevated cost environment rather than creating a significant new increase. Companies should anticipate a continuation of broad-based tariff exposure under different legal authorities.

• With today’s expiration of the 150-day Section 122 tariffs (initially put in place to replace the struck down IEEPA tariffs), USTR is now moving towards utilizing the more well-established Section 301 and Section 232 authorities.
• Existing tariff planning strategies remain important, as broad duties continue on imports from many key sourcing countries.
• Product classification and country-of-origin reviews remain critical to determine whether any product-specific exclusions apply.
• Businesses importing qualifying products from USMCA partners or products already covered under Section 232 or Chapter 98 provisions should review eligibility, as those goods are not subject to these new Section 301 duties.

The USTR is still conducting ongoing Section 301 investigations into manufacturing overcapacity involving key manufacturing economies, including China and several other major exporters. These investigations are examining whether government policies have created unfair production advantages in sectors that compete with U.S. manufacturing. While much of the public discussion has centered on steel, semiconductors, batteries, solar products, and electric vehicles, the investigations could ultimately affect additional manufactured goods depending on the final determinations. 

In addition, the administration recently threatened to impose up to 50 percent tariffs under Section 338 on roughly $20 billion in Canadian goods, scheduled to go into effect on August 19th unless the administration determines that trade negotiations between the countries have improved. Although residential lighting fixtures and ceiling fans have not been targeted in either the 301 overcapacity investigations or proposed Canadian Section 338 tariffs, the U.S. trade landscape continues to rapidly evolve. Companies should stay engaged as additional tariff actions may influence sourcing costs and supply chain strategies into the fall. Lighting manufacturers should consult with their brokers and suppliers about price changes to their specific imported products. 

Additional Resources: CBP Guidance, USTR Fact Sheet, USTR Announcement