Section 301 Tariffs Explained: What US Importers Need to Know in 2026

What Are Section 301 Tariffs?

Section 301 of the Trade Act of 1974 gives the Office of the United States Trade Representative (USTR) authority to impose tariffs on countries that engage in unfair trade practices — including intellectual property theft, forced technology transfer, and discriminatory treatment of US companies. Unlike base HTS duties that apply to all countries equally, Section 301 tariffs are country-specific penalties designed to pressure a trading partner into changing its behavior.

In practice, Section 301 has been used almost exclusively against China since 2018. The tariffs were imposed following a USTR investigation that concluded China was conducting or supporting theft of US intellectual property through cyber intrusions, requiring foreign companies to transfer technology as a condition of market access, and directing state-backed acquisition of US technology companies.

How We Got Here: The 2017–2018 Investigation

In August 2017, the USTR initiated an investigation under Section 301 into China's acts, policies, and practices related to technology transfer, intellectual property, and innovation. The investigation concluded in March 2018 with a finding that China's practices were "unreasonable or discriminatory and burden or restrict US commerce."

The response came in waves. Between July 2018 and September 2019, the administration published four lists of Chinese products subject to additional tariffs. Each list covered more products at varying rates. Negotiations between the US and China led to partial rollbacks under the Phase One trade deal in early 2020, but most tariffs remained in place. The Biden administration maintained the tariffs, conducted a statutory review in 2024, and actually increased rates on strategic sectors. The current administration has kept these elevated rates and added further surcharges under Section 122.

Section 301 Tariff Rates by List

Section 301 tariffs were rolled out in four tranches, commonly referred to as Lists 1 through 4. Each list covers a different set of HTS codes at different rates.

Tranche	Effective Date	Goods Covered	Current Rate
List 1	Jul 6, 2018	$34B (818 HTS lines)	25%
List 2	Aug 23, 2018	$16B (279 HTS lines)	25%
List 3	Sep 24, 2018	$200B (5,745 HTS lines)	25%
List 4A	Sep 1, 2019	~$120B (3,800+ HTS lines)	7.5%

List 1 targeted industrial machinery, aerospace parts, and technology components. List 2 expanded to semiconductors, chemicals, and plastics. List 3 was the broadest wave, covering consumer electronics, furniture, auto parts, and thousands of other product categories. List 4A originally carried a 15% rate but was reduced to 7.5% under the Phase One trade agreement in February 2020.

2024–2025 Strategic Rate Increases

Following the statutory four-year review of Section 301 tariffs, USTR announced targeted rate increases on strategically important sectors. These increases went into effect between September 2024 and January 2025 and represent the highest Section 301 rates ever imposed:

Product Category	Previous Rate	New Rate
Electric vehicles	25%	100%
Semiconductors	25%	50%
Solar cells & modules	25%	50%
Steel & aluminum	0–7.5%	25%
Lithium-ion batteries	7.5%	25%
Critical minerals	0%	25%
Ship-to-shore cranes	0%	25%
Syringes & needles	0%	50%
PPE (masks, gloves)	0–7.5%	25%

How Section 301 Stacks with Other Tariffs

Section 301 is rarely the only tariff you pay. US import duties are additive — your total rate is the sum of every applicable program. For goods from China, this is the full tariff stack:

• Base HTS duty — the standard MFN rate for all imports of that product, typically 0–15%
• Section 301 — China-specific surcharge, 7.5% to 100% depending on the list and product
• Section 232 — applies to steel (50%), aluminum (50%), and copper (25%) from all countries
• Section 122 — the 10% global baseline tariff on all imports, effective April 2025
• AD/CVD — anti-dumping and countervailing duties on specific products, often 50–200%+

Worked Example: Steel from China

Consider importing $100,000 worth of hot-rolled steel flat products (HTS 7208.27) from China. With a 0% base duty, Section 301 adds $25,000 (25%), Section 232 adds $50,000 (50%), and Section 122 adds $10,000 (10%) — putting total tariffs at $85,000 before freight and fees. Total landed cost: approximately $193,800. Calculate the full landed cost for your product →

The Section 301 Exclusion Process

USTR has periodically offered a product exclusion process that allows importers to request temporary relief from Section 301 tariffs on specific products. When granted, the exclusion retroactively removes the Section 301 surcharge for that HTS code for a defined period (typically 12 months).

The process has been inconsistent. USTR received over 50,000 exclusion requests in the first round alone, with an approval rate of roughly 30–35%. Many exclusions that were granted subsequently expired and were not renewed.

As of early 2026, the exclusion process is largely dormant. USTR has not announced new exclusion windows for the 2024–2025 rate increases. For most importers, the practical reality is that Section 301 tariffs are a fixed cost of doing business with China. You can set up tariff alerts on your key HTS codes to stay informed when rates or exclusion statuses change.

Six Strategies to Minimize Section 301 Exposure

1. Country-of-Origin Diversification

Section 301 tariffs apply exclusively to goods with China as the country of origin. Moving production to Vietnam, India, Thailand, Mexico, or other countries eliminates the Section 301 surcharge entirely. Use our country comparison tool to see the cost difference side by side. Important caveat: CBP scrutinizes "transshipment" — routing Chinese goods through a third country to avoid tariffs. The product must undergo a substantial transformation in the new country to qualify for a different country of origin.

2. Tariff Engineering / Reclassification

Section 301 tariffs are tied to specific 8-digit HTS codes. In some cases, minor product modifications can shift the product to a different HTS classification that carries a lower or zero Section 301 rate. This is legal and well-established in customs practice, but it must be done carefully to avoid CBP penalties. Search your current HTS code to see whether nearby classifications carry different Section 301 exposure.

3. Foreign Trade Zones (FTZs)

Foreign Trade Zones are designated areas within the US where imported goods can be stored, assembled, manufactured, or processed without immediately paying duties. While FTZs do not eliminate Section 301 tariffs, they offer timing benefits and in some manufacturing scenarios, the "inverted tariff" benefit.

4. First Sale Valuation

If your supply chain involves a middleman — for example, a Hong Kong trading company that buys from the Chinese factory and sells to you — you may be able to use "first sale" valuation. This means customs duties are calculated on the price the middleman paid the factory (the first sale), not the price you paid the middleman. This requires proper documentation showing the transactions are arm's length.

5. FTA Utilization for Alternative Sources

The US has free trade agreements with 20 countries. If you're moving sourcing out of China, choosing an FTA partner country can reduce your base HTS duty to 0% in addition to eliminating Section 301. Check eligibility with our FTA checker.

6. Model Scenarios Before Committing

Before making supply chain changes, model the financial impact. Our tariff simulator lets you adjust Section 301 rates, add or remove Section 232 exposure, and compare landed costs across different sourcing scenarios.

The Bottom Line

Section 301 tariffs have fundamentally changed the economics of importing from China. What started as a temporary trade negotiation tool in 2018 has become a permanent feature of the US tariff landscape, with rates moving only upward. For importers, the path forward requires accurate classification, realistic cost modeling, and proactive diversification planning.

For deeper background on the full tariff stack affecting Chinese imports, including AD/CVD duties and Section 232 overlap, see our China Tariffs 2026: Complete Guide.