U.S. Section 301 Tariffs Proposed on EU and 59 Countries — What the Chemical Industry Needs to Know

The United States has proposed a new wave of tariffs under Section 301 of the Trade Act of 1974, targeting imports from the European Union and 59 other countries. The move is part of a broader effort to replace duties previously imposed under the International Emergency Economic Powers Act (IEEPA), which was struck down by the Supreme Court earlier in 2026.

The new tariffs are expected to take effect around July 24, 2026 — the same date that temporary 10% global tariffs imposed under Section 122 are set to expire — creating a direct handoff between the two regimes.

The Forced Labor Tariffs

The most recent Section 301 tariffs are rooted in a USTR investigation into forced labor trade practices. The two-tier structure is:

• 10% — Countries with explicit bans, equivalent regulatory measures, or relevant trade agreement provisions with the U.S.

• 12.5% — All other economies

Countries at 10%

• Argentina

• Bangladesh

• Cambodia

• Canada

• Ecuador

• El Salvador

• EU

• Guatemala

• Indonesia

• Malaysia

• Mexico

• Pakistan

• Taiwan

• UK

Countries at 12.5%

• Algeria

• Angola

• Australia

• Bahrain

• Brazil

• Chile

• China

• Colombia

• Costa Rica

• Dominican Republic

• Egypt

• Guyana

• Honduras

• Hong Kong

• India

• Iraq

• Israel

• Japan

• Jordan

• Kazakhstan

• Kuwait

• Libya

• Morocco

• New Zealand

• Nicaragua

• Nigeria

• Norway

• Oman

• Peru

• Philippines

• Qatar

• Russia

• Saudi Arabia

• Singapore

• South Africa

• South Korea

• Sri Lanka

• Switzerland

• Thailand

• The Bahamas

• Trinidad and Tobago

• Turkey

• UAE

• Uruguay

• Venezuela

• Vietnam

Source: USTR

Key Exemptions

The forced labor tariffs come with several important carve-outs:

• USMCA Compliance — Imports from Canada and Mexico that comply with the U.S.-Mexico-Canada Agreement are largely exempt

• Section 232 Products — Goods already subject to sectoral tariffs (steel, aluminium, automobiles, furniture) are excluded

Chemicals & Plastics Excluded from the Forced Labor Tariffs

• 2529.21.00 — Fluorspar, containing by weight 97% or less of calcium fluoride

• 2529.22.00 — Fluorspar, containing by weight more than 97% of calcium fluoride

• 2614.00.30 — Synthetic rutile

• 2614.00.60 — Titanium ores and concentrates, other than synthetic rutile

• 2617.10.00 — Antimony ores and concentrates

• 2707.10.00 — Benzene, from distillation of high-temperature coal tar, or where aromatic constituents exceed nonaromatic

• 2707.20.00 — Toluene, from distillation of high-temperature coal tar, or where aromatic constituents exceed nonaromatic

• 2707.30.00 — Xylenes, from distillation of high-temperature coal tar, or where aromatic constituents exceed nonaromatic

• 2707.99.51 — Phenols from coal tar, containing more than 50% by weight of hydroxybenzene

• 2707.99.59 — Phenols, nesoi

• 2711.14.00 — Ethylene, propylene, butylene and butadiene, liquefied

• 2811.11.00 — Hydrogen fluoride (Hydrofluoric acid)

• 2823.00.00 — Titanium oxides

• 2846.10.00 — Cerium compounds

• 2915.90.10 — Fatty acids of animal or vegetable origin, nesoi

• 3206.11.00 — Pigments and preparations based on titanium dioxide, containing 80%+ by weight of TiO₂

• 3402.42.10 — Non-ionic organic surface-active agents, aromatic or modified aromatic

• 3402.42.20 — Fatty substances of animal, vegetable or microbial origin; non-ionic organic surface-active agents, non-aromatic

• 3402.42.90 — Non-ionic organic surface-active agents, other than fatty substances, non-aromatic

• 3901.90.90 — Polymers of ethylene, nesoi, in primary forms, other than elastomeric

• 3902.90.00 — Polymers of propylene or other olefins, nesoi, in primary forms

• 3905.91.10 — Copolymers of vinyl esters or other vinyls, containing 50%+ of vinyl acetate derivatives

• 3905.99.80 — Polymers of vinyl esters or other vinyl polymers, in primary forms, nesoi

• 3907.10.00 — Polyacetals in primary forms

• 3908.10.00 — Polyamide-6, -11, -12, -6,6, -6,9, -6,10 or -6,12 in primary form

Source: USTR

Tariffs Are Stackable — Final Rates Are Unknown

One of the most consequential aspects of the new regime is that Section 301 tariffs from separate investigations can be stacked, meaning a single country could face cumulative duties from multiple probes.

15 Countries Under Additional Dumping Investigation

The following economies are already subject to the forced labor tariffs and could face additional stacked duties once the dumping probe concludes:

• Bangladesh

• Cambodia

• China

• EU

• India

• Indonesia

• Japan

• Malaysia

• Norway

• Singapore

• South Korea

• Switzerland

• Taiwan

• Thailand

• Vietnam

Source: USTR

Individual Country Investigations

• Brazil — 25% proposed tariff for unfair trading practices (completed)

• China — Pending; compliance with 2020 trade deal

• Vietnam — Pending; intellectual property protection and enforcement

Source: USTR

Brazil exposure example: 12.5% (forced labor) + 25% (unfair trade) = 37.5% combined duties

The Brazil Case

A USTR investigation launched in mid-2025 examined Brazilian trade practices across digital trade rules, electronic payments, tariffs, anti-corruption enforcement, intellectual property, ethanol market access, and deforestation. That probe has now concluded with a proposed 25% tariff. Combined with the 12.5% forced labor tariff, Brazilian imports could face total duties of 37.5%.

Section 232 goods are excluded. Existing IEEPA exemptions will be preserved and expanded for additional Brazilian products.

The Bigger Picture: From IEEPA to Section 301

The IEEPA-based reciprocal tariff regime implemented in 2025 was dismantled following the Supreme Court ruling. Section 122 tariffs were applied as a temporary bridge while the USTR completed investigations. With Section 122 expiring July 24, the handoff to Section 301 is imminent — and more investigations are pending, meaning additional tariffs will follow.

Retaliation Risk for U.S. Chemical Exporters

The U.S. chemical industry has been vocal about the risk of retaliation. Given the scale of U.S. chemical exports, any escalation by trading partners could disproportionately affect the sector:

• The EU and Canada previously drew up countermeasure lists covering plastics and chemicals — never implemented, but ready to activate

• China escalated to triple-digit retaliatory tariffs on U.S. imports in 2025 before a temporary truce was reached

What to Do Now

1. Audit your supply chain — identify which imports fall under the new rates vs. exemptions

2. Check HTS codes — verify your specific products against the USTR exclusion list above

3. Monitor pending investigations — the dumping probe and China/Vietnam individual cases could stack additional duties

4. Assess retaliation exposure — model what EU, Canada, or China countermeasures could mean for your margins

California Chemical is here to help you navigate these changes. Contact us for guidance specific to your product categories and trade flows.