Friday, July 24, 2026

How Do New Section 301 Tariffs Impact Latin America?

By Khalea Robertson

New levies stemming from U.S. investigations into forced labor worldwide hit 19 countries in the Americas.

In a widely expected decision, U.S. Trade Representative Jamieson Greer on July 23 announced another round of sweeping tariffs, this time on 60 economies that together account for over 99 percent of U.S. imports. The Office of the U.S. Trade Representative (USTR) said the decision was based on findings that these countries do not enforce bans on the use of forced labor to produce goods exported to the United States, thereby violating Section 301 of the 1974 Trade Act, which addresses unfair trade practices. The tariffs serve to advance the “America First Trade Policy” pronounced by President Donald Trump on the first day of his second term to reduce trade deficits and promote domestic production.

The new Section 301 tariffs replace global tariffs based on Section 122 of the same trade act—dealing with balance-of-payments deficits—that had been in place since February and had a 150-day time limit that expired just after midnight on July 24. Section 122 tariffs stood at 10 percent, while the Section 301 duties stand at either 10 or 12.5 percent. The lower rate applies to countries Washington determined have made efforts or committed to reducing the use of forced labor while the higher rate applies to all others.

Trade experts expect these levies could be more durable than both the Section 122 tariffs and the Liberation Day tariffs that invoked the International Emergency Economic Powers Act, or IEEPA, in April 2025 only to be struck down by the Supreme Court in February 2026. Speaking on AS/COA Online’s Latin America in Focus podcast after that Supreme Court decision, CSIS’ Diego Marroquín Bitar highlighted the fact that the U.S. government is required to conduct investigations in order to enact Section 301 tariffs, providing “stronger guardrails” against possible legal challenges. Still, the Peterson Institute’s Alan Wm. Wolff argues that, much like in the IEEPA case, lawsuits against the 301 tariffs will be forthcoming, writing that: “Setting broad tariffs is the sole prerogative of the Congress, not the president.”

Section 301 actions automatically expire after four years unless a U.S. business sector representative requests a renewal, in which case the USTR will review it.

Which countries in the Americas face 301 tariffs?

Nineteen countries in the Americas are subject to Section 301 tariffs (see chart below). Among them are the North American neighbors and the largest U.S. trading partners, Mexico and Canada. Goods covered under the U.S.–Mexico–Canada Agreement (USMCA) are exempt from these new levies. Mexican Economy Secretary Marcelo Ebrard, who was in bilateral USMCA talks with Greer the day Section 301 tariffs were announced, noted that more than 80 percent of Mexico’s exports to the United States remain exempt from U.S. levies and the effective tariff rate on remaining goods did not change.

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However, Mexico is awaiting the results of another Section 301 investigation into economies accused of leveraging “excess capacity and production in manufacturing sectors,” which could yield another round of tariffs. Canada, meanwhile, faces the possibility of 50-percent tariffs on more than 550 products come August 19.

One country already dealing with multiple tariff regimes is Brazil. On July 15, the White House slapped 25-percent tariffs on about 4,000 Brazilian products following a separate Section 301 investigation into alleged unfair trade practices. Brazilian President Luiz Inácio Lula da Silva challenged the legal basis of the new round of Section 301 tariffs and said his government would move to implement its “Reciprocity Law” in retaliation.

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Are there exemptions to the 301 duties?

As with Section 122 levies, Washington has made exceptions for key imports such as oil and gas; fertilizer; critical minerals; some pharmaceutical inputs; certain agricultural goods including beef, coffee, and tropical fruits; and other “products that could cause economy-wide disruptions if subject to these tariffs.” Copper, aluminum, and steel products, which already subject to other tariffs, were also excluded.

In addition to the USMCA exemptions, the USTR notice also singles out Argentina, Ecuador, El Salvador, and Guatemala as countries that will benefit from additional exemptions. These four countries signed reciprocal trade deals with Washington earlier this year. Key exempted imports from these countries include live animals, wood and silk products, and precious stones. Ecuadorian flowers, one of its key exports to the United States and a product protected in the U.S.–Ecuador trade agreement, are also exempt from these levies. And importantly for Central America, which sells a third or more of its exports to the United States, the textiles and apparel industry is not subject to Section 301 tariffs.

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How Do New Section 301 Tariffs Impact Latin America?

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