Section 301 Tariffs: 5 Things Importers Should Review

Executive Summary

Here are the key takeaways from this article and a quick summary of what importers impacted by Section 301 tariffs should be reviewing:

• Move beyond passive absorption: Too many businesses treat tariffs, including Section 301 tariffs, as an unavoidable “cost of doing business.” While you can’t legally get around import duties, you don’t have to passively absorb increased expenses.
• Understand where your tariff exposure is coming from: Review the classifications, countries of origin, and Section 301 measures affecting your imported products so you have a clear picture of where additional duties are impacting costs.
• Treat exclusions as targeted relief, not an operating strategy: Section 301 exclusions can provide meaningful relief when they apply, but they tend to be narrow, product-specific, and time-limited. Importers should monitor them without building long-term financial strategies around anticipated exclusions.
• Look at both current costs and potential recovery opportunities: An effective tariff strategy should address what you are paying today while also examining whether historical import and export activity may create opportunities to recover eligible duties.
• Make sure your customs data reflects your current compliance strategy: Periodically review ACE entry data, classifications, and filing instructions to confirm that current decisions and internal records are being carried through accurately at the entry level.

Section 301 tariffs remain a central concern for U.S. importers navigating a rapidly changing trade environment. Earlier this year, the international trade community was also closely following the legal battle over tariffs imposed under the International Emergency Economic Powers Act (IEEPA). On February 20, 2026, the Supreme Court held that IEEPA does not authorize the President to impose tariffs.

But that decision did not eliminate tariff exposure for U.S. importers. Section 301 of the Trade Act of 1974 remains an active trade-remedy authority, and its use has expanded significantly in 2026.

Two recent actions illustrate the changing landscape. Effective July 22, USTR imposed a 25% additional Section 301 duty on imports from Brazil, subject to specified exemptions. Effective July 24, another Section 301 action imposed additional duties of 10% or 12.5% on imports from 60 economies in response to USTR’s forced-labor investigations, with special rate calculations applying to certain products from several economies.

The overlap can make tariff analysis even more complicated. Brazil, for example, is also included in the forced-labor action at a 12.5% rate for covered merchandise. Depending on the merchandise and applicable exemptions, Brazilian-origin goods may therefore be subject to multiple Section 301 measures.

With costs rising and so much on the line, trade compliance can no longer be treated strictly as a back-office function. Profit margins increasingly depend on how importers manage tariff exposure, classification, origin, compliance, and available recovery opportunities.

At J.M. Rodgers Co., we see too many organizations respond passively, accepting duty increases as inescapable operational overhead, or simply “the cost of doing business.” But while you cannot control tariff policy, you can control your organization’s exposure, compliance policies, and duty recovery programs.

Here are five things we observe leading trade professionals reviewing and acting on now to minimize the impact of Section 301 tariffs.

1. Audit Your Section 301 Tariff Exposure

Customs summaries don’t always show the full business impact of Section 301 tariffs. An importer looking to understand its exposure and the effect on its bottom line should conduct a thorough landed cost audit.

This audit can’t be limited to a standard landed cost calculation that simply adds base duties, international freight, insurance, and an estimated tariff markup. When you’re dealing with substantial additional duties, such a simple calculation can leave too many blind spots.

Instead, map each imported SKU to its HTSUS classification, country of origin, applicable Chapter 99 provisions, exclusions or exemptions, and any special rate calculation that may apply. Looking only at a product’s standard duty rate may not reveal its actual tariff exposure.

And then there are additional factors to consider:

• Different Section 301 rate structures: Section 301 is not a single uniform tariff program. Under the 2026 forced-labor action, for example, many covered economies face additional duties of 10% or 12.5%. Certain products from the European Union, Taiwan, Japan, Korea, and Switzerland are subject to special calculations based on the applicable Most-Favored-Nation (MFN) rate. The specific action, country of origin, HTSUS classification, Chapter 99 provision, and available exemptions must all be evaluated.
• Contractual terms: Review purchase agreements and Incoterms such as Delivered Duty Paid (DDP) to understand how duty costs are allocated commercially. Separately confirm who is acting as the Importer of Record and how the merchandise is actually being entered with CBP.

Our perspective: One of the most common mistakes we see is conducting tariff reviews at the product-category level rather than the SKU level. An aggregate view can conceal the fact that a handful of high-volume SKUs may be quietly eroding the profit margin of an entire product line. A landed cost audit should drill down to individual part numbers to reveal where Section 301 duties are having the greatest financial impact.

2. Re-Evaluate Country of Origin

When duties become unsustainable, companies often seek to shift sourcing away from nations targeted by tariffs. However, simply “adjusting” or “changing” a country of origin by rerouting logistics or performing superficial secondary processing does not necessarily change the legal origin of the merchandise and may create substantial compliance risk.

When determining country of origin for purposes of Section 301 trade remedies, CBP applies a substantial-transformation analysis. The central question is generally whether the processing results in a new and different article with a new name, character, or use, based on the totality of the evidence.

It’s not simply a matter of finding a new supplier headquartered in a different jurisdiction.

When experienced trade compliance teams evaluate changes to country of origin, they do so with caution, keeping these factors in mind:

• The transshipment risk: Rerouting goods through a third country, or performing processing that does not result in substantial transformation, does not by itself change the country of origin. Declaring that third country as the origin under those circumstances can create serious tariff-evasion and enforcement exposure.
• Substantial transformation rules: Assembly, processing, or alteration must be evaluated based on the specific facts and circumstances. CBP considers the nature and extent of the operations and whether they produce a new article with a different name, character, or use. No single factor is necessarily determinative.

Our perspective: Before deploying significant capital to alter manufacturing footprints, organizations should consider seeking experienced trade counsel or appropriate administrative guidance, such as a CBP Binding Ruling under 19 C.F.R. Part 177 when appropriate. Relying solely on an overseas supplier’s assurance that a product “now originates” in an untargeted country can create significant compliance risk.

3. Monitor Section 301 Exclusions Without Relying on Them

Every supply chain manager would welcome having imported goods qualify for a tariff exclusion. And when an exclusion applies, the financial impact can be significant.

However, exclusions are generally narrow, product-specific, and time-limited. They should be monitored carefully, but they should not be assumed when developing long-term sourcing, pricing, or inventory strategies.

For example, 178 exclusions from the China Section 301 tariffs currently remain in effect through 11:59 p.m. Eastern time on November 9, 2026.

Importers also need to monitor technical changes to existing exclusions, not just announcements of new ones. In September 2026, USTR made conforming amendments to four China Section 301 product exclusions after changes to 10-digit HTSUS statistical reporting categories took effect July 1. CBP implemented the updated exclusion treatment in ACE on September 23.

That is an important example of why exclusion monitoring cannot stop after determining that a product qualifies. Changes to HTSUS reporting numbers or CBP implementation instructions can affect how relief must actually be claimed.

• Automated monitoring: Use available tools and internal processes to monitor the Federal Register, USTR announcements, CBP guidance, and relevant trade bulletins. New exclusions, extensions, exemptions, technical amendments, or other forms of relief can have a meaningful effect on landed costs.
• Retroactive recovery: When an exclusion or amendment applies to previously entered merchandise, eligible refunds may be pursued through a Post Summary Correction if the entry remains within the PSC filing timeframe or through a protest if the liquidation remains within the applicable protest period. CBP specifically provided those options in its September guidance concerning the conforming amendments.

Our perspective: Importers should monitor available exclusions closely, but financial planning should be built around the duties that actually apply today. If additional relief becomes available, it can then be incorporated into the broader tariff strategy.

4. Review HTS Classifications and Entry Data

Using a licensed customs broker does not transfer the Importer of Record’s ultimate responsibility for entry accuracy and compliance. That makes alignment between the importer’s approved product data, internal compliance procedures, and actual entry filings especially important.

Incorrect classification data can result in duty overpayments, underpayments, or other compliance problems. To ensure Section 301 duties are being applied correctly, importers should periodically review HTS classification data and compare that information with actual entry filings.

Every product must be classified according to the General Rules of Interpretation (GRIs), applicable Section and Chapter Notes of the Harmonized Tariff Schedule, and other relevant legal authority, including CBP rulings where applicable.

Make corrections where necessary, but avoid the temptation to approach classification with a predetermined duty outcome in mind. Legitimate savings can result when a review identifies a product that has been consistently classified under an incorrect or higher-duty provision. The goal should always be a classification that is accurate, supportable, and defensible.

Our perspective: We often see situations where internal product data, classification records, and day-to-day entry instructions have fallen out of alignment over time. Approved classifications may have changed, product matrices may be outdated, or legacy instructions may still be appearing in entry data. Reviewing ACE data against current internal records is one of the most effective ways to identify discrepancies and potential duty overpayments.

5. Balance Tariff Mitigation With Duty Recovery

When goods are unambiguously classified within the scope of Section 301, and they can’t reasonably be sourced elsewhere without creating other business or compliance issues, it’s time to consider more sophisticated tariff mitigation and recovery strategies.

For many importers, this requires a fundamental shift in approach.

Instead of focusing only on reducing the cost of future entries, businesses should also examine whether historical duty payments may be recoverable. A dual-track program focused on both future mitigation and historical recovery can provide a more complete Section 301 strategy.

Duty Drawback and Section 301 Tariffs

Duty drawback is a federal statutory program under 19 U.S.C. § 1313 that can refund up to 99% of eligible duties, taxes, and fees when the applicable import, export or destruction, substitution, manufacturing, and recordkeeping requirements are satisfied.

Section 301 duties are eligible for duty drawback.

More importantly for the current tariff environment, CBP issued a correction on August 18, 2026, explicitly confirming that HTSUS 9903.05.01, associated with the Brazil Section 301 duties, and HTSUS 9903.05.20 through 9903.05.84, associated with the forced-labor Section 301 duties, are drawback eligible. CBP also corrected its ACE drawback validations to permit drawback for those classifications.

Depending on the movement and use of the merchandise, two of the primary drawback provisions that may apply are:

• Unused merchandise drawback, 19 U.S.C. § 1313(j): If imported merchandise subject to Section 301 duties is subsequently exported or destroyed without being used in the United States, and the applicable statutory requirements are met, up to 99% of eligible duties may be recovered. This includes direct identification under § 1313(j)(1) and substitution under § 1313(j)(2).
• Manufacturing drawback, 19 U.S.C. § 1313(a) and (b): When imported merchandise subject to Section 301 duties is used in qualifying U.S. manufacturing and the resulting articles are subsequently exported or destroyed, up to 99% of eligible duties may be recoverable under direct identification or substitution manufacturing drawback, depending on the circumstances.

Our perspective: Executive teams understandably devote considerable attention to planning next quarter’s sourcing, pricing, and supply chain strategy. At the same time, historical customs and export data may contain recoverable duties that have never been claimed. For importers with substantial duty payments and qualifying exports, drawback can provide an important source of cash recovery that helps offset the broader impact of Section 301 tariffs.

Section 301 Tariffs: Your Next Steps

Here’s the reality of today’s Section 301 environment: traditional, reactive customs practices are increasingly inadequate in an environment of changing tariff actions and significant additional duties. But importers still have options available.

You can run a thorough audit to determine your true landed costs. You can validate countries of origin and HTS classifications, provided those reviews are grounded in the applicable law and supported by appropriate documentation. You can review entry data against approved classifications and commercial records. And you can build a dual-track tariff strategy that addresses both future mitigation and historical duty recovery.

Taken together, these activities can help businesses better understand their exposure, strengthen compliance, identify legitimate savings opportunities, and reduce the financial impact of continued trade volatility.

Review Your Section 301 Exposure

Section 301 tariffs can affect more than landed cost. They can also create compliance considerations and potential duty recovery opportunities. J.M. Rodgers can help you evaluate your current tariff exposure, review your import and export activity, and determine whether duty drawback may be available. Request a quote to discuss your program with our team.