What Are Section 301 Trade Investigations, and How Could New USTR Tariffs Affect U.S. Importers?

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What Is Section 301 and How Does It Give the USTR Authority to Impose Tariffs?

Section 301 of the Trade Act of 1974 gives the U.S. Trade Representative authority to investigate foreign government acts, policies, or practices that may be unjustifiable, unreasonable, discriminatory, or burdensome to U.S. commerce. A section 301 investigation may begin from a petition or be self-initiated by USTR. The agency seeks consultations, gathers public comments, may hold hearings, and determines whether the conduct is actionable. If it is, USTR can impose duties or other import restrictions, suspend trade concessions, or negotiate a binding remedy. In non-trade-agreement cases, USTR generally makes its determination within 12 months. That process is the legal path from investigation to a tariff action affecting U.S. importers.

How Have the Section 301 Tariffs on Chinese Goods Evolved Since 2018?

The China section 301 tariffs began in four rounds. List 1 imposed 25% duties on about $34 billion of imports on July 6, 2018. List 2 added 25% on about $16 billion on August 23, 2018. List 3 imposed 10% on about $200 billion beginning September 24, 2018, then rose to 25% on May 10, 2019. List 4A took effect September 1, 2019 at 15% and fell to 7.5% on February 14, 2020; List 4B was suspended. Most of these trade war tariffs remain. A 2024 review kept most tariffs and raised selected strategic products, including electric vehicles to 100%, semiconductors and solar cells to 50%, and many batteries, critical minerals, steel and aluminum products to 25%.

How Do Importers Determine Whether Their Products Are Subject to Section 301 Tariffs?

Importers start with the Harmonized Tariff Schedule of the United States, or HTSUS. Imported products are classified under HTSUS provisions, with tariff treatment generally identified at the eight-digit subheading level and statistical reporting generally using 10-digit numbers. USTR’s China tariff search tool allows an importer to enter an eight-digit HTS subheading and see whether the product is covered by a Section 301 action and the additional duty rate. Classification alone is not enough. Country of origin matters because Section 301 duties can depend on where the product legally originates, not simply where it was shipped from. Importers should also check applicable Chapter 99 provisions, exclusions, and product-specific exemptions before entry.

What Options Do US Importers Have to Reduce Their Section 301 Tariff Exposure?

Importers have several legitimate ways to reduce exposure. First, confirm that the HTS classification and country of origin are correct. A mistaken code or unsupported origin position can create either overpayments or compliance risk. Second, review available exclusions and exemptions. Third, consider supply-chain changes that create a genuine change in origin under U.S. customs rules rather than merely routing goods through another country. Duty drawback may recover eligible Section 301 duties when imported merchandise is later exported or destroyed, and Foreign-Trade Zones (FTZs) can defer duty payments in some circumstances. Customs valuation also matters. Companies using related-party pricing should coordinate customs planning with Transfer Pricing because CBP has specific rules governing whether related-party transaction values and later adjustments are acceptable.

How Should Companies Be Planning for Further Tariff Changes?

Companies should treat tariff planning as a recurring finance and supply-chain process, not a one-time customs exercise. The July 2026 Forced-Labor USTR Section 301 action imposed 10% or 12.5% tariffs on 60 economies, subject to exemptions and special MFN-offset rules for the European Union, Taiwan, Japan, Korea, and Switzerland. Separately, USTR initiated structural Excess-Capacity investigations covering China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India. Companies should map imports by HTS code and origin, model multiple tariff scenarios, identify alternative suppliers, and review contracts for tariff allocation, price-adjustment rights, Incoterms, and change-in-law provisions.

How BT Can Help

For more than four decades, Bennett Thrasher has provided businesses and individuals with strategic business guidance and solutions through professional tax, audit, advisory, and business process outsourcing services. Contact Matt Pellegrom, partner in Bennett Thrasher’s International Tax practice, or call us at 770.396.2200.

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