On June 2, 2026, USTR proposed additional duties of 10% to 12.5% on imports from 60 economies — including China — under Section 301 of the Trade Act. Hearings start July 7. If you import from China, this changes your landed cost math.
Here’s what’s happening, what it means, and what to do right now.
The Tariff: 10% or 12.5%, Depending
The proposal splits countries into two tiers:
| Tier | Rate | Who |
|---|---|---|
| Tier 1 | 10% | Countries with partial or full bans on goods made with forced labour |
| Tier 2 | 12.5% | Everyone else |
China falls into the broader category. The USTR’s stated justification is that 60 countries have “failed to impose and effectively enforce a prohibition on the importation of goods produced with forced labour.”
This comes after the US Supreme Court struck down Trump’s earlier IEEPA-based tariffs in February 2025. Section 301 is a different legal pathway — harder to challenge.
Key timeline:
- June 2: Proposal published
- June 22: Stakeholder comments due
- July 7: Public hearings
- After hearings: Final determination (likely August–September 2026)
What This Actually Costs You
Let’s run the numbers. Say you import $50,000 worth of goods from China.
| Before | After 12.5% | |
|---|---|---|
| Product cost (FOB) | $50,000 | $50,000 |
| Ocean freight | $3,500 | $3,500 |
| Existing duties (avg 8%) | $4,000 | $4,000 |
| New Section 301 duty | $0 | $6,250 |
| Total landed cost | $57,500 | $63,750 |
That’s an extra $6,250 on a $50K order. On a container worth $150K, you’re looking at nearly $19,000 in new costs.
3 Things Importers Should Do Right Now
1. Audit Your HS Codes — Before July 7
Not all products will be covered equally. Some categories may be exempt. The deadline for stakeholder comments is June 22 — 12 days from now. If your product category has legitimate grounds for exemption, your industry association needs to file.
Pull every HS code you import under. Cross-reference with the USTR proposal. Flag anything that might qualify for exclusion.
2. Lock Supplier Pricing Now — Not Later
Chinese factories are watching this too. If tariffs go into effect, some will try to pass costs upstream — or hold inventory for domestic buyers to avoid export uncertainty.
The factories with excess capacity right now (see: China’s PMI just hit 50.0, export orders at 48.6) are more willing to negotiate. Lock in prices and production slots before the July hearings. Once tariffs are confirmed, leverage shifts.
3. Find Suppliers Who Can Absorb Part of the Hit
A 12.5% tariff doesn’t mean your margin shrinks by 12.5%. If your supplier drops their FOB price by 4-5% and you optimize freight by 2-3%, you’re only absorbing 4-6%. Multiplied across a year of orders, that’s real money.
This is where having someone on the ground matters. A supplier who tells you “no room on price” over email might find 5% when someone’s sitting across the table. Factory owners negotiate differently in person.
The Hidden Opportunity
Tariffs are bad for margins. But they’re also a filter — they kill the weakest importers and leave the serious ones standing.
While your competitors are panicking, you can:
- Renegotiate supplier contracts with longer terms
- Shift to factories in lower-cost cities (Shandong vs. Guangdong saves 15-20% on labor)
- Consolidate orders to hit volume discounts that offset the tariff
The importers who act in June will be the ones still standing in September.
Need help renegotiating with your Chinese suppliers before the July 7 hearings? Get in touch.