Section 301 Tariffs: Complete Guide for 2025
Section 301 tariffs represent one of the most significant trade policy changes in recent decades. This comprehensive guide explains everything businesses need to know about these tariffs, from basic definitions to advanced compliance strategies.
Table of Contents
What Are Section 301 Tariffs?
Definition & Legal Background
Section 301 tariffs are additional import duties imposed under Section 301 of the Trade Act of 1974. This U.S. trade law authorizes the President to take action against foreign countries that violate trade agreements or engage in discriminatory or unreasonable practices that burden U.S. commerce.
Key Facts
- Origin: Implemented starting July 2018 under the Trump administration
- Scope: Covers approximately $370 billion in Chinese imports
- Product Coverage: Over 5,700 product categories (HTS codes)
- Legal Authority: Trade Act of 1974, Section 301
Why Were They Implemented?
The U.S. Trade Representative (USTR) initiated a Section 301 investigation in August 2017 concerning China's acts, policies, and practices related to:
- Technology Transfer: Requirements or pressure on U.S. companies to transfer technology to Chinese entities as a condition for market access
- Intellectual Property: Discriminatory licensing practices and inadequate IP protections
- Cyber Intrusions: Chinese government-directed cyber intrusions into U.S. commercial computer networks
The Four Tariff Lists
List 1: First Wave of Tariffs25%
Effective July 6, 2018
Coverage
- • 818 HTS codes
- • $34 billion in imports
- • Industrial machinery
- • Electronics & IT equipment
Key Industries
- • Nuclear reactors & boilers
- • Medical equipment
- • Optical instruments
- • Plastics & chemicals
Current Tariff Rates (2025)
Lists 1, 2 & 325%
The majority of Section 301 tariffs remain at 25%, covering industrial goods, machinery, electronics, and intermediate products.
Coverage:
~$250 billion in annual imports
List 4A7.5%
Consumer-focused products benefit from a reduced rate under the Phase One Economic and Trade Agreement between the U.S. and China.
Coverage:
~$120 billion in annual imports
How to Calculate Your Tariff
Step-by-Step Calculation Process
Identify Your HTS Code
Determine the correct Harmonized Tariff Schedule (HTS) classification for your product. Use the USITC HTS Search tool or consult a licensed customs broker.
Check Section 301 Coverage
Verify if your HTS code appears on any of the four Section 301 lists. Use the USTR's official product exclusion portal or our tariff lists page.
Calculate Total Duty
Add the Section 301 rate to your product's standard MFN duty rate:
Total Duty = Customs Value × (MFN Rate + Section 301 Rate)
Check for Exclusions
Verify if an active exclusion applies to your specific product. Exclusions are granted at the 10-digit HTS level and may have specific criteria.
Example Calculation
Product: LED Display Panel
HTS Code: 8531.20.0020
Customs Value: $10,000
MFN Rate: 0% (duty-free)
Section 301 List: List 3
Section 301 Rate: 25%
Total Duty = $10,000 × (0% + 25%) = $2,500
Affected Products & Industries
Electronics & Tech
- • Semiconductors & chips
- • LED displays & monitors
- • Circuit boards
- • Computer parts
- • Telecommunications equipment
- • Consumer electronics
Machinery & Equipment
- • Industrial machinery
- • Nuclear reactors & boilers
- • Electrical machinery
- • Medical equipment
- • Optical instruments
- • Railway equipment
Consumer Goods
- • Apparel & footwear
- • Furniture & bedding
- • Handbags & luggage
- • Lighting equipment
- • Home textiles
- • Food products
Automotive
- • Auto parts & components
- • Motorcycles & parts
- • Tires & rubber products
- • Vehicle accessories
Materials & Chemicals
- • Plastics & plastic products
- • Chemical products
- • Rubber & articles
- • Steel & aluminum products
- • Optical fiber cables
Other Categories
- • Toys & sporting goods
- • Musical instruments
- • Building materials
- • Agricultural equipment
- • Fishing equipment
Exclusion Process
How to Request a Tariff Exclusion
Businesses can request exclusions for specific products under certain circumstances
The USTR has periodically opened exclusion processes allowing U.S. companies to request relief from Section 301 tariffs for specific products. Successful exclusions result in tariff refunds and prospective relief.
Exclusion Criteria
- Product is not available from sources outside of China
- Imposition of tariff causes severe economic harm to the requester
- Product is not strategically important to "Made in China 2025" initiatives
Compliance Requirements
Entry Documentation
Importers must properly document Section 301 tariff liability on customs entry documents:
- Report correct HTS classification (10-digit)
- Add applicable Section 301 duty code (HTS 9903.88.xx)
- Calculate and pay duties at time of entry
- Maintain supporting documentation for 5 years
Country of Origin Determination
Section 301 tariffs apply based on the country of origin, not the country of exportation. Key considerations:
Substantial Transformation: If a product undergoes substantial transformation in a third country, it may acquire a new country of origin and avoid Section 301 tariffs.
Assembly & Processing: Minor assembly or processing operations typically do not change country of origin. CBP applies strict substantial transformation tests.
Documentation: Maintain detailed manufacturing and sourcing records to support country of origin claims.
Penalties for Non-Compliance
- Underpayment Penalties: Up to 2x the unpaid duty amount
- Interest Charges: Compound interest on unpaid duties
- Seizure: Goods may be seized for significant violations
- Loss of Privileges: Revocation of customs bonds or import privileges
Additional Resources
Official Government Resources
- USTR Section 301 Portal - Visit ustr.gov for official tariff lists and exclusions
- USITC HTS Search - Use the U.S. International Trade Commission website to search HTS codes
- CBP Section 301 Guidance - U.S. Customs and Border Protection provides compliance guidance
Last updated: November 15, 2025
Sources: USTR, USITC, U.S. Customs and Border Protection