Section 301 Tariffs on Mexico: What's In Force July 2026

Are there Section 301 tariffs on Mexico right now?

Current status: As of July 24, 2026, a 10% additional Section 301 tariff on Mexican goods is now in force under the forced-labor investigation. What USTR proposed on June 2, 2026 became final action on July 23, 2026, applying to goods entered for consumption on or after July 24, 2026. The duty is not blanket, however: goods that (1) meet USMCA rules of origin and (2) are entered claiming preferential tariff treatment under the USMCA are exempt. Non-preferential Mexican goods — including goods that could qualify under USMCA but are not entered claiming that preference — remain subject to the 10% duty. Goods covered by Section 232 (autos, steel, aluminum) continue to be governed by that separate program.

What are Section 301 tariffs?

Section 301 of the Trade Act of 1974 gives the U.S. Trade Representative authority to impose tariffs in response to foreign trade practices it deems unfair. The statute is the legal foundation of the U.S. tariff program against Chinese imports that began in 2018, when the first Trump administration used Section 301 to impose duties on roughly $370 billion of Chinese goods across four product lists. It remains the largest single tariff program in U.S. history.

Section 301 tariffs operate under a different statute than Section 232 tariffs. Section 232 covers imports deemed a national security risk (the current 25 percent tariff on steel and aluminum imports falls under Section 232). Section 301 covers trade practices deemed unfair. Mexico is currently subject to Section 232 on steel and aluminum, but is not currently subject to any Section 301 tariffs. That distinction is the answer most North American manufacturing executives are searching for when they ask about Section 301 tariffs Mexico in May 2026.

One regulatory note that matters for planning. Section 301 was not affected by the Supreme Court ruling in 2025 that struck down a parallel tariff program built on the International Emergency Economic Powers Act (IEEPA). Section 301 sits under the Trade Act of 1974, which has independent statutory footing. The tool USTR has used continuously against China since 2018 is the same tool now under consideration for Mexico.

Section 301 vs Section 122 vs IEPPA

• Statutory basis: 19 U.S.C. § 2132
• Authority: President, in response to fundamental international payments problems; temporary surcharge, up to 15% maximum
• Effective in 2026: set at 10%, effective February 24, 2026
• USMCA exemption: Goods qualifying under USMCA rules of origin are exempt while it was in effect
• Legal status: Ruled unlawful by the U.S. Court of International Trade on May 8, 2026; under appeal

Section 301 (Trade Act of 1974)

• Statutory basis: 19 U.S.C. § 2411
• Authority: USTR, following a formal investigation
• Scope: Sector-specific or HTS-specific
• Duration: Indefinite one imposed
• Legal footing: Continuously in force against China since 2018. Not affected by the 2025 IEEPA ruling

IEEPA (International Emergency Economic Powers Act)

• Statutory basis: 60 U.S.C. § 1701 et seq.
• Authority: Presidential emergency declaration
• Scope: Broad, often country-level or category-level
• Speed: Immediate be executive order
• Status: Vacated by the Supreme Court in 2025 for use on tariffs

Section 301 tariffs currently in force (on China)

The China-origin schedule remains active and is the operational reference point for any future Section 301 action against Mexican-origin goods. As of May 2026, the rates read as follows:

• List 1: 25%. Industrial machinery, electronics, and aerospace components. Approximately $34 billion in trade value at original implementation in July 2018.
• List 2: 25%. Semiconductors, plastics, and chemicals. Approximately $16 billion in trade.
• List 3: 25%. Auto parts, furniture, and building materials. Approximately $200 billion in trade.
• List 4A: 7.5%. Consumer goods, apparel, and footwear. Approximately $120 billion in trade.
• List 4B: Suspended since December 2019 under the U.S. and China Phase One agreement. Still suspended as of May 2026.

Strategic sector increases (effective 2024 through 2026)

• Electric vehicles: 100% (raised from 25% in 2024)
• Lithium-ion electric vehicle batteries: 25% (raised from 7.5%)
• Semiconductors: 50%
• Solar cells and modules: 50%
• Critical minerals: 25%
• Medical products including syringes and personal protective equipment: 25 to 50%

Active exclusions

178 product-specific exclusions remain active. They were extended through November 10, 2026 following the meeting between Presidents Trump and Xi on November 1, 2025. After that date, exclusion renewal is not guaranteed.

Why is Mexico under Section 301 investigation in 2026?

On March 11 and 12, 2026, USTR opened two new Section 301 investigations. 

Excess Manufacturing Capacity Investigation

Targets 16 economies including China, Mexico, Brazil, India, Vietnam, Thailand, Indonesia, Turkey, the European Union, Japan, South Korea, Taiwan, Malaysia, the United Arab Emirates, Saudi Arabia, and Argentina. The named sectors include steel, aluminum, semiconductors, electric vehicles, solar cells, batteries, and critical minerals.

Forced Labor Compliance Investigation

Covered 60 economies, including Mexico. On June 2, 2026 USTR completed this investigation and found all 60 economies actionable. Mexico was among six (Canada, Ecuador, the EU, Indonesia, Mexico, Pakistan) found to have “failed to effectively enforce” a forced-labor import prohibition — a notch below the 54 economies found to have failed to impose and enforce one. USTR’s stated concern is the effective enforcement of forced-labor import bans broadly; Chinese-owned production in Mexico sourcing from regions flagged under the Uyghur Forced Labor Prevention Act remains a related exposure for individual supply chains.

July 23-24, 2026: USTR Final Action (Forced Labor)

On July 23, 2026, USTR announced final action in the forced-labor Section 301 investigation covering 60 economies (roughly 99.4% of U.S. imports). The rates took effect July 24, 2026:

• 10% additional duty on economies that impose (or have committed to impose and enforce) a forced-labor import prohibition. This tier includes Mexico and Canada, alongside countries such as India, Indonesia, Malaysia, Pakistan, the United Kingdom, among others.
• 10% of 12.5% (net of MFN rate) on certain non-exempt products of the European Union, Taiwan, Japan, Korea, and Switzerland. 
• 12.5% additional duty on all other investigated economies.

For Mexico, USMCA-compliant goods entered claiming preference are excluded from the 10% duty (see Current Status above).

Mexico vs Canada: a widening gap under USMCA

While Mexico and Canada sit in the same 10% forced-labor tier, Canada now carries an additional layer that Mexico does not. On July 20th, 2026, the U.S. Administration issued three proclamations under Section 338 of the Tariff Act of 1930, imposing 50% tariffs on roughly $20 billion of selected Canadian goods (primarily motor vehicles, alcoholic beverages, and dairy) effective approximately August 19, 2026. No equivalent Section 338 action has been taken against Mexico. For companies weighing where to locate North American manufacturing, Mexico's current tariff position under USMCA is materially more favorable than Canada's. 

Timeline of Key Events

The chronology that brought Section 301 tariffs Mexico from theoretical to active question:

“Previously, the cost of importing to the US outside of the treaty was between 2.5% and 3.5% (WTO tariffs); today, that differential can fluctuate between 10% and 25%. Producing under the USMCA framework is the most competitive option for both Mexico and the United States. By shifting production from Asia to Mexico, the US economy benefits directly, because for every dollar produced in our country, the integration of inputs and components originating from the United States increases significantly.”

Emilio Cadena, CEO, Prodensa

The defense against Section 301 tariffs Mexico exposure is USMCA compliance. Goods that qualify under USMCA rules of origin enter the U.S. at zero percent. Goods that do not qualify face whatever rates emerge from the USTR process.  

Section 301 Tariffs:

Tariffs imposed by the U.S. government under the Trade Act of 1974 in response to trade practices considered unfair or harmful to U.S. commerce.

Section 232 Tariffs:

Trade measures tied to national security concerns, currently applied to products such as steel and aluminum imports.

Rules of Origin:

Requirements used to determine whether a product qualifies for preferential tariff treatment under the USMCA.

Forced Labor Compliance Investigation:

A USTR investigation focused on identifying supply chains or manufacturing operations potentially linked to forced labor practices.

Are there Section 301 tariffs on Mexico in 2026?

Yes. As of July 24, 2026, a 10% additional Section 301 tariff on Mexican-origin goods is in force under the forced-labor investigation. USTR proposed the duty on June 2, 2026 and announced final action on July 23, 2026, with the tariff taking effect for goods entered for consumption on or after July 24, 2026. USMCA-compliant goods that are entered claiming preferential USMCA treatment are exempt; non-preferential Mexican goods are subject to the 10% duty. Section 232 goods (autos, steel, aluminum) remain governed by that separate program.

What did USTR propose in June — and finalize in July 2026?

In the forced-labor investigation, USTR found all 60 economies actionable under Section 301 and, on June 2, 2026, proposed additional duties: 10% on economies that have a forced-labor import prohibition or a partial/committed regime (Mexico's tier) and 12.5% on the rest, plus a reduced-rate textile mechanism, excluding products listed in Annex A of the Federal Register notice. After the July comment period and hearing, USTR announced final action on July 23, 2026, and the duties took effect July 24, 2026. USMCA-compliant goods entered claiming preference are exempt.

What is the difference between Section 301 and Section 232 tariffs?

Section 232 of the Trade Expansion Act of 1962 covers imports deemed a national security risk. The current 25% U.S. tariff on steel and aluminum imports falls under Section 232 and does apply to Mexican-origin goods. Section 301 of the Trade Act of 1974 covers trade practices deemed unfair. As of July 24, 2026, Mexico is subject to a 10% Section 301 forced-labor duty, from which USMCA-compliant goods entered claiming preference are exempt.

What is Section 122 and does it apply to Mexico?

Section 122 of the Trade Act of 1974 authorizes a temporary import surcharge up to 15% ad valorem for up to 150 days in response to fundamental international payments problems. The administration imposed a 10% Section 122 surcharge effective February 24, 2026, which applied to Mexican-origin goods that did not qualify under USMCA (USMCA-qualifying goods were exempt). The surcharge expired at its 150-day limit on July 24, 2026 and is no longer in effect. It had earlier been ruled unlawful by the U.S. Court of International Trade on May 8, 2026 (under appeal).

What was significant about July 24, 2026?

Two things converged on July 24, 2026. First, the Section 122 temporary surcharge statutorily expired at its 150-day limit. Second, the 10% forced-labor Section 301 duty — final action announced July 23 — took effect. The alignment means Section 301 effectively took over as the operative tariff mechanism the moment Section 122 expired. The separate excess-capacity Section 301 determination remains pending.

Why did IEEPA tariffs get struck down but Section 301 did not?

IEEPA tariffs were vacated by the Supreme Court in 2025 because the Court found the statute did not authorize the President to impose tariffs in the manner used. Section 301 sits under a different statute (the Trade Act of 1974) with an explicit congressional grant of tariff authority to USTR after a formal investigation. The procedural rigor of the Section 301 process — including public comment and hearings — is what gives the tool its legal durability.

Has USTR decided whether to impose Section 301 tariffs on Mexico?

Yes, for the forced-labor investigation. USTR determined Mexico actionable, proposed a 10% duty on June 2, 2026, and issued final action on July 23, 2026, effective July 24, 2026 — the duty is now in force. The separate excess-capacity investigation determination remains pending.

Which sectors are most at risk under the Section 301 investigation involving Mexico?

The excess-capacity investigation names steel, aluminum, semiconductors, electric vehicles, solar cells, batteries, and critical minerals — the same strategic sectors that already carry elevated Section 301 rates on Chinese imports. Final action in that investigation remains pending as of late July 2026.

• USMCA compliance — and actually claiming USMCA preference at the time of entry — is the primary defense against the 10% Section 301 duty.
• Section 301 now extends well beyond China to Mexico and 59 other economies.
• The forced-labor duties are in force as of July 24, 2026, and the Section 122 surcharge has expired.
• Mexico is treated more favorably than Canada, which faces an additional 50% Section 338 tariff layer.
• Manufacturers should audit rules-of-origin and country-of-origin documentation now that enforcement has begun.

How can Prodensa help?

Prodensa has been the operating partner for foreign manufacturers in Mexico since 1985, and Section 301 exposure is the kind of question we have been answering for four decades. Our trade advisory team and institutional relations advisors support global clients on a daily basis to stay informed and competitive.

Sources:

Federal Registrar: Imposing a Temporary Import Surcharge

Congress.gov: Section 122 of the Trade Act of 1974

White & Case: Trump Administration Imposes 10% Section 122 Tariff in Plan to Replace IEEPA Tariffs

Global Trade Alert: From IEEPA to Section 122

USTR: Findings and Proposed Action in 60 Section 301 Forced Labor Investigations (June 2, 2026)

USTR: Federal Register Notice — Section 301 Forced Labor Import Ban Actionability and Proposed Action

USTR: Report on Forced Labor Import Ban Findings (June 2, 2026)

Secretaría de Economía (México), Comunicado 44, June 3, 2026 (proposal does not cover T-MEC–compliant trade).

Note- this article was supported by AI productivity tools.