On July 24, 2026, a new set of Section 301 tariffs took effect that few supply chains can sidestep. Following investigations opened on March 12, 2026, the Office of the U.S. Trade Representative asserted that dozens of trading partners were failing to impose or enforce bans on goods made with forced labor.
The response was sweeping. The action covers all products from roughly 60 economies, including Canada, Mexico, the European Union, United Kingdom, China, India, Japan and Switzerland, at an added rate of either 10% or 12.5% depending on the country of origin.
For importers, the immediate concern is cost. These are additional duties, and for most goods they’re layered on top of the rates that importers already owe. There are exemptions, and USTR added hundreds of products to that list before the effective date, covering items such as certain seeds, fertilizer and pesticide inputs, semiconductor manufacturing equipment, pharmaceuticals and used clothing. Even so, the majority of goods from the listed economies now carry the extra charge.
It’s worth being precise about what these tariffs are. They’re trade-remedy duties assessed under Section 301 of the Trade Act of 1974. They’re not the same as the forced-labor import prohibitions enforced under Section 307 of the Tariff Act or the Uyghur Forced Labor Prevention Act, which stop non-compliant goods at the border entirely. The Section 301 tariffs apply to goods that are admissible and lawfully entered. That distinction matters, because duties paid on lawfully entered goods can often be recovered later. Goods barred from entry cannot.
The recovery mechanism is duty drawback, which refunds up to 99% of the duties, taxes and fees paid on imported merchandise when that merchandise, or a qualifying substitute, is later exported or destroyed. It’s one of the oldest programs in U.S. trade law, created so that goods passing through the U.S. on their way to a foreign market aren’t permanently burdened by U.S. import duties.
Section 301 duties are eligible for drawback. This sets them apart from Section 232 steel and aluminum duties and Section 201 safeguard duties, which are not recoverable through drawback, and from antidumping and countervailing duties, which are also excluded. Because the new forced-labor tariffs are Section 301 duties, importers who export can pursue a refund on the portion of their goods that leaves the country.
The most direct route is unused merchandise drawback. If a company imports a product, pays the Section 301 duty, and then exports or destroys that product without using it in the U.S., it can claim back up to 99% of the duty. The goods don’t have to be the exact ones imported. Substitution rules let a company match imports and exports that share the same eight- or 10-digit Harmonized Tariff System classification, which adds flexibility for busy operations.
The second route is manufacturing drawback. Here, a company imports components or raw materials, uses them to produce a finished article, and exports that article. The duties paid on the imported inputs, including the Section 301 charge, become recoverable once the finished product is exported. This is common in industries that bring in parts and ship out assembled goods.
Both paths reach back further than many importers expect. A drawback claim can generally cover imports from the previous five years, so duties already paid on past entries aren’t necessarily lost.
Many companies affected by the forced-labor tariffs aren’t simply selling into the U.S. market. They re-export, supply foreign customers, and run global manufacturing that moves goods back out of the country. For those flows, drawback turns a portion of the new tariff from a sunk cost into a refund. It doesn’t erase the tariff, and doesn’t apply to goods consumed domestically, but on the exported share it can return nearly the full amount.
A few practical points. Documentation is everything. Customs and Border Protection reviews drawback claims tied to Section 301 duties closely, and clean records that link specific imports to specific exports are what carry a claim. Antidumping and countervailing duties on the same goods remain off the table. And, because eligibility turns on specifics such as classification, export evidence and timing, a review of your own import and export history is the only reliable way to assess the opportunity.
The forced-labor tariffs are broad, and will remain in force while the legal challenges filed against them work through the courts. Classification review and exemption checks belong in any response. So does drawback, which for exporters is often the single largest lever available to recover what these new duties add at the border.
Tony Nogueras is founder and chief information officer of Alliance Drawback Services.