Section 301 Forced-Labor Tariffs: Final Action Now in Effect
USTR published its final Section 301 forced-labor determination on July 23, and CBP confirmed implementation the same day (CSMS #69326983). The new duties apply to entries for consumption on or after 12:01am ET July 24, at precisely the same time the Section 122 tariffs expired. There is a narrow in-transit exception: goods already loaded and en route on the final vessel to the USA before 12:01am ET on July 24, and entered for consumption or withdrawn from warehouse for consumption before 12:01am ET on July 28, will not be subject to the added duty. The tariffs don’t apply to products subject to Section 232 or products eligible for USMCA. The tariffs apply to all 60 investigated economies, a reported 99% of all US imports. Countries that were not investigated will not be affected.
For beverage alcohol, industry efforts to secure an exemption were unsuccessful, other than the UK spirits exemption further highlighted below. The EU is hit with a tariff of 10% or the normal MFN rate, whichever is higher. The 10% on the EU is inclusive of the base rate — a slight improvement for most imports compared to Section 122, which was 10% on top of the base rate.
The breakdown of the tariffs is listed below:
Additional 10%: Argentina, Bangladesh, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, the United Kingdom, and Trinidad and Tobago
10% or the MFN rate, whichever is higher: the EU and Taiwan
Additional 12.5%: Algeria, Angola, Australia, Bahrain, Brazil, Chile, China, Colombia, Costa Rica, Dominican Republic, Egypt, Guyana, Hong Kong, Iraq, Israel, Kazakhstan, Kuwait, Libya, Morocco, New Zealand, Nicaragua, Nigeria, Norway, Oman, Peru, Philippines, Qatar, Russia, Saudi Arabia, Singapore, South Africa, Thailand, the Bahamas, Turkey, United Arab Emirates, Uruguay, Venezuela, and Vietnam.
There is good news for the UK, as whisky from the UK did obtain the exemption promised by President Trump. The other winner is cork and natural cork products from the EU, which also gained a specific exemption from the new 301 tariffs.
Canada: Section 338 Tariff Announcement
Earlier this week, the White House announced new tariffs on Canadian products via three separate proclamations (signed July 20) under Section 338 of the Tariff Act of 1930 — a 50% tariff on over 500 products, including alcoholic beverages. One of the issues is Canada’s ban on sales of US alcohol in most of the provinces. Since the July 20 announcement, trade talks have intensified between the USA and Canada, with Canada threatening retaliation should the two parties not reach an agreement. The tariffs are scheduled to take effect at 12:01am ET on August 19, with no exemption for USMCA-eligible goods in these categories. While we expect negotiation to lead to a more reasonable outcome, importers should evaluate advancing shipments ahead of the effective date.
USMCA Joint Review
The US and Mexico held their third bilateral negotiating round in Mexico City July 21–23, with primary focus on economic security, automotive rules of origin, export controls, agriculture, and concerns over Chinese investment being used to route goods through Mexican factories. No agreement has been announced yet, but the administration has indicated a goal of an interim deal by the end of 2026.
CAPE Phase 3 / IEEPA Refunds
We are still waiting for next steps on the process for “finally liquidated” entries. CBP has indicated that the next phase of CAPE is under development, but CBP is still arguing that they do not have the statutory authority to issue refunds for these types of entries, and this case is currently tied up in the Federal Circuit appeal. The Court of International Trade (CIT) issued an order on July 21 specifically covering the 3,700 plaintiff importers with formal cases, instructing CBP to reliquidate the entries and enable the IEEPA refunds to be paid. For those importers who have not filed a lawsuit, we will await further news on the options available, one of which could be a class action suit or filing individual lawsuits, but our hope is that there will be an avenue via CAPE. In terms of timing, legal action is available within two years of the IEEPA tariffs going into effect, so the deadline is still many months out.
Brazil Tariff Now in Effect
Brazil’s 25% Section 301 tariff took effect as scheduled on July 22, with limited exemptions (coffee, beef, oranges/OJ, some oil/energy products, aerospace parts) but no exemption for beverage alcohol. Brazil also remains part of the broader forced-labor investigation above and faces an additional 12.5% tariff on top.
Section 301 Excess Capacity Investigation
We are not done with new tariffs. USTR is continuing investigations into 16 economies that they believe manufacture too much product, thus creating a trade surplus that burdens the US economy and affects US domestic manufacturing. New tariffs could be levied based on the final results. The 16 countries/economies are: China, the EU, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India. The EU tariff should be capped at 15% based on the Turnberry EU-USA agreement, should the EU be hit with further tariffs based on the excess capacity decision.
Fuel Price Uptick
Oil jumped sharply this week after Iran-backed Houthi rebels in Yemen said they struck two Saudi Arabian oil tankers (the Encelia and the Layla) with missiles and drones in the Red Sea, enforcing a maritime blockade on Saudi ports declared July 20. Crude oil crossed $100 a barrel for the first time since May 26. This marks a new front: the Strait of Hormuz has been effectively shut since earlier this year, and Saudi Arabia had been routing 4–5 million barrels a day via the Red Sea/Bab al-Mandeb Strait to bypass it; the Houthi blockade and attacks now threaten that workaround too. At least a dozen vessels have reportedly been attacked in and around Hormuz since July 6, with casualties among crew. While we have not yet seen new Emergency Bunker Surcharges, we are keeping our eye on the situation, and shippers can expect to see fuel increases should the oil routes continue to be blocked.
Climate & Weather Disruptions
South America: Andes Crossing Closed, Chilean Ports Reopen
The Mendoza–Chile border crossing (Los Libertadores) remains closed due to high-mountain weather and is expected to stay closed until approximately next Wednesday, July 29. A new weather front is forecast to move into central Chile starting today, which could further affect Andes conditions. Separately, the ports of Valparaíso and San Antonio, closed since last Friday due to adverse weather and high waves, resumed operations and are expected to continue operating normally over the next few days.
Rhine Water Levels: Approaching Historic Lows, Rail Alternative Also Constrained
The Kaub gauge stood at approximately 63cm on July 23, per an Albatrans update, and is forecast to fall to around 25cm next week — below the historic low set in October 2018 — with no relief in sight from the weather. Compounding this, the Troisdorf–Wiesbaden rail line, a key alternative corridor, has been closed since July 10 for upgrades and won’t reopen until December, already causing delays and cancellations on rerouted rail traffic. At these levels, barges can only run at a fraction of capacity, and if this leads to a temporary suspension of regular service to the Upper Rhine, Middle Rhine, and Rhine-Main regions, shifting affected freight to rail or truck will be necessary. Carriers are using low-draught barges and Lower Rhine hub terminals with truck onward transport as stopgaps, and prioritizing time-critical shipments. Low-water surcharges are in effect and expected to continue indefinitely.
Other Port & Terminal Updates
Port of Oakland: Following our note this week on the Port of Oakland closure, the walkout was a solidarity action tied to a labor dispute at the C&H Sugar facility in Crockett; an arbitrator has since ordered the longshore workers back to work and terminal operations have resumed, though the underlying dispute remains unresolved.
Antwerp/MPET: The terminal appears to have reopened on schedule the afternoon of July 17 following last week’s hydrofluoric acid leak, and we’ve seen no further reports of disruption; Belgium’s labour inspectorate has since opened a criminal investigation into the cause.
Barcelona Rail: As a reminder, ADIF’s full rail suspension at the Port of Barcelona runs August 2–8 (partial restrictions continue August 9–24), now just over a week out — finalize bookings and road-transport contingency plans if you haven’t already.
LCL Services from France, Italy, and Spain/Portugal — Summer Update: Bi-monthly departures continue from each of these countries for small shipments, at a per-case rate to the Alba Wine and Spirits warehouse in Edison, New Jersey, with temperature-controlled containers through the summer. Shipments from other European countries can be added into the mix. Let us know if you need further information