Tariff Watch: Section 232 Hits Polysilicon, TRQ Delays, and the Countdown to Section 338
This week’s Tariff Watch examines new Section 232 tariffs on polysilicon, delays to Section 301 textile tariff-rate quotas, CBP’s new enforcement strategy, and the approaching implementation of Section 338 tariffs on Canada.
Welcome to the latest edition of Tariff Watch. This is the weekly series from J.M. Rodgers that keeps busy importers, manufacturers, and supply chain leaders up to date on US trade policy.
In this week’s news, the Trump administration launches fresh national security tariffs targeting materials critical to the tech sector, importers hoping for relief on the Section 301 forced-labor duties will have to wait, and the implementation of Section 338 on Canada is right around the corner. Let’s get started by going over the latest happenings:
What’s New
Textile TRQs for Section 301 delayed until September: When the forced-labor Section 301 tariffs on 60 economies took effect late last month, the Office of the US Trade Representative had promised a tariff-rate quota (TRQ) system to provide relief for textile and apparel imports from nations such as Bangladesh and Indonesia. New reporting says the TRQ won’t be operational until at least September 1. Until then, importers must continue paying the full 10% duty.
Section 232 targets polysilicon with a 15% tariff and MIP program: On August 6, President Trump signed a Section 232 proclamation imposing a minimum import price (MIP) program and a 15% ad valorem tariff on imports of polysilicon and polysilicon derivatives. The tariffs, which are scheduled to take effect on December 4, are meant to encourage onshoring and protect domestic supply chains.
CBP launches five-year Field Operations strategy: On August 6, US Customs and Border Protection’s Office of Field Operations (OFO) announced a plan it calls OFO Strategy 2026-2030. The roadmap outlines the agency’s new enforcement priorities, which are framed as a response to national security concerns. OFO Strategy 2026-2030 calls for more rigorous border inspections and stricter trade compliance reviews over the coming years.
Who’s Impacted
This week’s developments bring immediate disruptions to some manufacturing sectors, while promising long-term changes for the broader import community:
All importers: CBP’s new OFO Strategy calls for escalated physical inspections and stronger trade enforcement at ports of entry, meaning all importers should expect heightened scrutiny.
Solar energy and semiconductor supply chains: The new Section 232 tariffs on polysilicon — a critical material in solar panel and microchip manufacturing — will directly impact tech businesses that rely on imported raw materials. They will have to navigate a highly complex structure that demands certification of a qualifying sale at or above the MIP, or face steep duties.
Apparel and textile importers: Companies sourcing clothing from the nations announced for the Section 301 TRQ are stuck in an expensive holding pattern. Paying the unmitigated 10% duty through (at least) the end of August threatens to erase margins on late-summer and early-fall inventory arrivals.
What We’re Seeing
Product-specific tariffs are on the horizon and promised relief has been delayed, but proactive supply chain leaders are still taking steps to protect their margins:
- Manufacturers preparing for the MIP program: The introduction of a minimum import price for polysilicon is a novel mechanism for many tech supply chains. We are seeing companies closely parse their purchasing contracts to determine if they will owe the 15% ad valorem tariff or be forced to cover the shortfall to the MIP when the rule goes into effect in December.
- Apparel importers are strategically slowing down freight: Because the USTR’s tariff-rate quotas for specific textile origins won’t launch until September 1 or later, apparel companies are holding non-urgent inventory in bonded warehouses or strategically delaying ocean freight arrivals to avoid the temporary 10% hit.
- Businesses are overhauling their trade software: With the realization that the new Section 301 forced-labor tariffs feature a highly complex two-tier rate structure (10% and 12.5%), compliance teams are planning updates to their automated duty-calculation software, so they can better manage the intricate web of product- and country-specific exemptions.
What We’re Monitoring
We’re keeping a close watch on these ongoing stories:
CAPE Phase 3 processing speeds: With the Phase 3 portal now live for finally liquidated IEEPA entries belonging to businesses that litigated the matter, we’re monitoring CBP’s processing times. In particular, we’re looking to see if CBP can reliably meet its promised 60-90 day refund window.
The countdown to Section 338 tariffs on Canada: The historic 50% Section 338 tariffs on $20 billion of imports from Canada will go into effect next week — 12:01 am on Wednesday, August 19. These duties have the potential to permanently alter cross-border automotive, dairy, and beverage supply chains. We’re closely monitoring diplomatic channels, looking for signs of any last-minute negotiations that might delay implementation.
The August 16 Jones Act waiver expiration: This current Jones Act waiver is set to expire this Sunday. If the Trump admin does allow the waiver to lapse, it would heavily restrict the use of foreign-flagged vessels in US waters — potentially disrupting domestic maritime logistics.
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- Tariff Update: Refunds for Finally Liquidated Entries Under Section 232 Proclamation Establishes MIP and a 15% Tariff, EY Tax News
- CBP OFO Launches New Strategy to Safeguard National Security, CBP.gov
- Is Your Trade Team Ready for the Next Wave?, Thomson Reuters, Snell & Wilmer