Tariff & Trade Compliance Update: Section 301, Brazil, Canada & IEEPA Refunds

U.S. importers are facing several significant tariff and customs developments, including the implementation of new Section 301 duties, additional tariffs on imports from Brazil, upcoming Section 338 tariffs affecting certain Canadian goods, and new uncertainty surrounding the recovery of IEEPA tariff refunds. Importers should review the potential impact of these changes on their products and closely monitor developments as implementation continues.

New Section 301 Tariffs Take Effect

The Section 122 tariffs implemented in February 2026 expired on July 24, 2026, and were immediately followed by a new Section 301 tariff program. The new tariffs resulted from a U.S. Trade Representative investigation into foreign policies and enforcement related to forced labor and the movement of goods produced with forced labor.

The investigation identified 60 U.S. trading partners as failing to sufficiently inhibit or enforce bans on forced-labor goods. Collectively, these markets represent approximately 99.4% of U.S. imports.

Under the new tariff structure, 17 countries are subject to an additional 10% duty, while 38 countries are subject to a 12.5% duty. Imports from the European Union and Taiwan are subject to a combined Column 1 and Section 301 duty rate of up to 10%, while imports from Japan, South Korea and Switzerland are subject to a combined rate of up to 12.5%. If the normal Column 1 duty already meets or exceeds the applicable threshold, no additional Section 301 duty is added.

Several exemptions apply, including certain goods entered duty-free under USMCA, qualifying CAFTA-DR textiles and apparel, Section 232 articles, civil aircraft, pharmaceutical products, informational materials and certain other specifically excluded products.

For imports from China, the new Section 301 tariffs may apply in addition to existing Section 301 duties established during the first Trump administration.

Additional Tariffs on Imports from Brazil

Effective July 22, 2026, the United States imposed an additional 25% tariff on imports from Brazil, subject to specified exceptions. The action followed a USTR investigation into several Brazilian policies and practices involving digital trade, tariffs, anti-corruption enforcement, intellectual property protection, ethanol market access and illegal deforestation.

Importantly, the new 25% Brazil tariff may apply in addition to the 12.5% Section 301 duty, potentially creating significant additional duty exposure.

Exceptions are available for certain raw materials, products where tariffs could create broader economic disruption, goods that cannot be produced or sourced domestically in sufficient quantities or at reasonable prices, and other specifically identified articles.

Section 338 Tariffs on Certain Canadian Products

Three presidential proclamations issued July 20, 2026, call for a 50% tariff on certain Canadian products beginning August 19, 2026. The affected products represent approximately 5% of U.S. imports from Canada.

The actions address Canadian policies involving dairy import quotas, retaliatory tariffs on U.S. motor vehicles, and provincial or territorial restrictions on U.S. alcoholic beverages. Goods already subject to Section 232 duties and certain civil aircraft and aircraft parts are exempt.

Importers sourcing affected Canadian products should review the applicable product list and prepare for the potential additional duty before the August 19 effective date.

IEEPA Refunds: Additional Uncertainty for Liquidated Entries

The IEEPA tariff refund process continues to advance. Phase 1 has resulted in approximately $86.3 billion in refunds, while Phase 2, launched June 29, addresses reconciliation entries. Phase 3 is expected to address additional duties, including potentially those associated with already-liquidated entries.

However, a dispute between U.S. Customs and Border Protection and the U.S. Court of International Trade has created uncertainty regarding those entries. CBP maintains that the CIT cannot require it to reliquidate entries that have already become final. As a result, importers with finally liquidated entries may ultimately need to pursue recovery through litigation in the CIT.

A potential class action is also pending that could provide another avenue for affected importers. Importers with significant unrecovered IEEPA duties should consider consulting qualified trade counsel regarding available options and applicable filing deadlines.

CVI’s Customs & Compliance Team continues to monitor these developments and can assist importers in evaluating tariff applicability, available exemptions and potential duty exposure.

John Boomhover
Director of Compliance & Customs Services
CV International, Inc.