Section 301 Tariffs Mexico: Status and 2026 Outlook

Are there Section 301 tariffs on Mexico right now?

No. As of May 2026, no Section 301 tariffs Mexico apply to Mexican-origin goods. Mexico is currently named in a new Section 301 investigation opened by the U.S. Trade Representative (USTR) on March 11, 2026, with determinations expected by July 24, 2026. The tariff measures currently in force on Mexican-origin goods are Section 232 (25% on steel and aluminum since March 2025) and Section 122 (10% temporary surcharge since February 24, 2026, with USMCA-qualifying goods exempt, scheduled to expire July 24, 2026, and rules unlawful by the U.S. Court of International Trade on May 8, 2026, pending appeal).

Current status: Mexico is under Section 301 investigation.

No Section 301 tariffs are in effect on Mexican-origin goods as of May 22, 2026. Section 232 (steel/aluminum) and Section 122 (temporary surcharge) duties apply separately and are covered below.

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.

How Section 301 action works:

A Section 301 action moves through five formal steps. Knowing the sequence is what allows operators to engage the process rather than read to it after the fact. 

1. Investigation initiation. USTR opens an investigation under 19 U.S.C. § 2412  in response to a petition or a self-initiated finding. The investigation notice is published in the Federal Registrar.
2. Public comment and hearings. Affected industries, governments, and importers submit comments and testify. The record matters: USTR is required by statute to consider the public record in its determination
3. Determination. USTR publishes findings on whether the foreign practice is unreasonable or discriminatory and burdens or restricts U.S. commerce
4. Implementation. If the determination supports action, USTR proposes specific tariff actions, often by Harmonized Tariff Schedule (HTS) code. A second comment period follows the proposed list.
5. Tariffs effective and exclusion process. Tariffs become effective by Federal Register notice. Exclusion processes typically open later, allowing specific HTS codes to apply for relief. 

The procedural rigor is what gives Section 301 its durability. Each step builds a record that has been upheld against legal challenge.

Section 301 vs Section 122 vs IEPPA

The administration has used three different statutory bases to impose tariffs since 2025. Each has different scope, durability, and legal footing. Knowing which mechanism is active matters operationally, because each one carries different exemptions and timelines. 

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 122 (Trade Act of 1974)

• Statutory basis: 19 U.S.C. § 2132 
• Authority: President, in response to fundamental international payments problems 
• Scope: Temporary import surcharge up to 15% ad valorem
• Duration: Maximum 150 days unless extended by Act of Congress
• Effective in 2026: February 24, 2026 through July 24, 2026, currently 10%
• USMCA exemption: Goods qualifying under USMCA rules of origin are exempt
• Legal status: Rules 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

The progression matters. When IEEPA was struck down in 2025, Section 122 became the temporary bridge mechanism. When Section 122 expires on July 24, 2026 (or sooner if the Court of International Trade ruling holds on appeal), Section 301 is positioned to take over as the durable instrument. The same day Section 122 statutorily expires is the day USTR’s Section 301 determinations are expected. That alignment is not a coincidence.

Timeline: How We Got Here and What Comes next

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

• 2018. USTR opens the first Section 301 investigation against China. The first Trump administration uses Section 301 to impose duties on roughly $370 billion of Chinese imports across four lists. 
• 2018-2019. Lists 1, 2, and 3 implemented at 25%. List 5A at 7.5%. List 4B suspended in December 2019 under the Phase One agreement.
• 2024. Strategic-sector hikes under the Biden administration. Electric vehicles raised to 100%, semiconductors to 50%, solar to 50%.
• 2025. The Supreme Court vacates the IEEPA tariff program. The administration loses its fastest tariff tool. 
• November 1, 2025. Presidents Trump and Xi meet. 178 Section 301 China exclusions are extended through November 10, 2026
• February 24, 2026. The administration imposes a Section 122 temporary import surcharge of 10% on most countries. USMCA-qualifying goods are exempt.
• March 11 and 12, 2026. USTR opens new Section 301 investigations. Excess manufacturing capacity covers 16 economies including Mexico. Forced labor compliance covers 60 countries including Mexico. 

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. For the first time since the statute was first used against China in 2018, Mexico is among the named targets.

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

Covers 60 countries, including Mexico. Particular attention is on Chinese-owned production located in Mexico that sources from regions flagged under the Uyghur Forced Labor Prevention Act.

Determinations from both investigations are expected by July 24, 2026. That date is not arbitrary. July 24, 2026 is also the statutory expiration of the Section 122 temporary surcharge currently in force. The alignment positions Section 301 to become the operative tariff mechanism the moment Section 122 expires, or sooner if the Court of International Trade ruling holds on appeal.

The investigations themselves were prompted by USTR analysis of post-2018 trade and investment patterns, including the tripling of Chinese foreign direct investment into Mexico between 2020 and 2024 as Chinese-owned companies built plants in Nuevo León, Coahuila, Querétaro, and Aguascalientes to serve the U.S. market under USMCA preference. Mexico displaced China as the United States’ top trading partner in 2023 and has held that position through Q1 2026. That structural shift, often described as binational nearshoring, is what brought the question of Section 301 tariffs Mexico from theoretical to active.

What Section 301 tariffs on Mexico could look like

USTR has discretion in how Section 301 tariffs are designed if a determination supports them. Three patterns from the China program offer the most useful guide:

• Sector-specific lists. The China program built four lists by HTS code, with different rates per list. A Mexico program could follow the same structure, naming specific products in named sectors rather than applying a blanket tariff.
• Strategic sector escalation. Electric vehicles, batteries, semiconductores, solar cells, and critical minerals all carry elevated rates under the current China schedule. Mexican exposure could concentrate in the same sectors. 
• Derivative product expansion. The Section 232 expansion of February 2025 extended steel and aluminum tariffs to thousands of derivative products. Section 301 has the same statutory authority and the same operational playbook is available. 

Emilio Cadena, CEO of Prodensa, frames the size of the duty differential that any new Section 301 tariffs on Mexico would create:

“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.  

How manufacturers in Mexico should prepare:

The window between this update and the July 24, 2026 determination is the time to map exposure. Whether the question is current Section 232 duties or future Section 301 tariffs Mexico, the defense is the same: documentation, discipline, and binational coordination. Cadena puts the current size of the exposure in operational terms: “About 30% of exports to the United States pay some form of tariff due to non-compliance with USMCA rules or because they are subject to Section 232.” The work to bring that share down is not theoretical:

Run a mock audit on USMCA qualification.

Before any USTR determination opens the door to enforcement, your rules-of-origin file should be defensible end to end. Regional value content calculations, supplier certifications, and tariff classifications all need to hold up under scrutiny they have not yet faced.

Map exposure at every tier.

If any supplier in your bill of materials has Chinese ownership or sources critical inputs from China, document it. Plan for the contingency that those tiers may face additional duty, require reclassification, or trigger forced-labor questions under the parallel investigation.

Monitor the Federal Register.

USTR posts investigation notices, hearing schedules, and determinations in the Federal Register. The public comment window on the excess-capacity investigation closes ahead of the July 24, 2026 determination. Manufacturers with operational exposure in the named sectors have standing to comment, and the record matters.

“North American supply chains are increasingly integrated, with manufacturers investing significant resources to comply with USMCA rules of origin and regional production requirements. When companies meet those requirements, the agreement should deliver on its core promise: predictable, tariff-free trade within the region. Trade measures designed to address external competition should focus on imports from outside North America, ensuring that USMCA compliance continues to strengthen, rather than complicate, regional manufacturing integration.”

Emilio Cadena, CEO, Prodensa

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 Mexico in 2026? 

No. As of May 2026, no Section 301 tariffs apply to Mexican-origin goods. Mexico is currently named in a new Section 301 investigation opened by USTR on March 11, 2026, with determinations expected by July 24, 2026.

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 percent 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. Mexico is not currently subject to any Section 301 tariffs.

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 percent ad valorem for up to 150 days in response to fundamental international payments problems. The administration imposed a 10 percent Section 122 surcharge effective February 24, 2026. It applies to Mexican-origin goods that do not qualify under USMCA. USMCA-qualifying goods are exempt. Section 122 is scheduled to expire July 24, 2026, and was ruled unlawful by the U.S. Court of International Trade on May 8, 2026 (under appeal).

What is significant about July 24, 2026?

Two things happen on July 24, 2026. First, the Section 122 temporary surcharge statutorily expires at the 150-day limit. Second, USTR Section 301 determinations from the March 2026 investigations are expected. The alignment means Section 301 is positioned to take over as the operative tariff mechanism the moment Section 122 expires.

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 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.

When will USTR decide whether to impose Section 301 tariffs on Mexico?

USTR determinations from the March 11 and 12, 2026 investigations are expected by July 24, 2026. If tariffs follow, USTR pattern suggests they could be issued in late 2026 after a public comment and hearing process.

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. These are the same strategic sectors that already carry elevated Section 301 rates on Chinese imports.

• Section 301 is no longer just a China issue. The inclusion of Mexico in new USTR investigations signals a broader shift in how the United States approaches trade enforcement and industrial policy.
• USMCA compliance is becoming the first line of defense. Manufacturers with stronger Rules of Origin documentation, supplier traceability, and regional sourcing strategies will be better positioned if new tariff measures emerge.
• North American manufacturing is entering a more compliance-driven era. Tariffs, forced labor reviews, and supply chain transparency are becoming operational priorities—not just legal or customs topics.
• Preparation before July 2026 matters. Companies that proactively map supplier exposure, audit origin qualification, and strengthen binational coordination will have greater flexibility regardless of the outcome of the Section 301 investigations.

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

Note- this article was created using AI productivity tools.