For continuously taxed imports, 80% to 100% of Friday's new duty matches the old surcharge

The legal texts place both sides of the switch at 12:01 a.m. Eastern on Friday, July 24. The Section 122Section 122Section 122 of the Trade Act of 1974 permits temporary import restrictions for serious international-payments problems; the February 2026 proclamation used it for a 10% surcharge lasting no more than 150 days without an act of Congress. Source: https://www.federalregister.gov/documents/full_text/html/2026/02/25/2026-03824.html proclamation says its 10% surcharge continues through that time. USTR's final notice says the new Section 301Section 301Section 301 is a trade-law authority under which USTR may investigate certain foreign practices and respond with measures such as tariffs. Source: https://www.congress.gov/crs-product/IF11346 duties apply to covered products entered for consumption, or withdrawn from a warehouse for consumption, on or after that time. Sources: https://www.federalregister.gov/documents/full_text/html/2026/02/25/2026-03824.html and https://ustr.gov/sites/default/files/files/Press/Releases/2026/FLIP%20301%20Investigation%20Final%20Action%20FRN%207-23-26%20FINAL.pdf

The narrow question is not whether the two policies are legally equivalent. They are not: one arose under Section 122 to address stated international-payments problems, while the other arose from Section 301 investigations into failures to impose and effectively enforce forced-labor import prohibitions. The question is simply how many dollars of the new written dutydutyA duty is a charge imposed on an imported good; this article uses duty and tariff interchangeably. are no greater than the old written duty on otherwise identical import characteristics. Sources: https://www.federalregister.gov/documents/full_text/html/2026/02/25/2026-03824.html and https://ustr.gov/sites/default/files/files/Press/Releases/2026/FLIP%20301%20Investigation%20Final%20Action%20FRN%207-23-26%20FINAL.pdf

Consider the same hypothetical $100 of customs valuecustoms valueCustoms value is generally the price paid or payable for an imported product, excluding US import duties and international freight, insurance and related transportation charges. Source: https://www.census.gov/foreign-trade/reference/definitions/index.html under both schedules. If the old surcharge applied, the old additional dutyadditional dutyAn additional duty is a tariff charged on top of the ordinary tariff that normally applies to the product. Source: https://ustr.gov/sites/default/files/files/Press/Releases/2026/FLIP%20301%20Investigation%20Final%20Action%20FRN%207-23-26%20FINAL.pdf was $10. If the new rate is also 10%, the new duty is $10 and all of it matches the old exposure. If the new rate is 12.5%, the new duty is $12.50. The matching amount remains $10, leaving $2.50 above the old charge. The match share is therefore $10 divided by $12.50, or 80%. The official rate inputs come from the proclamation and final notice: https://www.federalregister.gov/documents/full_text/html/2026/02/25/2026-03824.html and https://ustr.gov/sites/default/files/files/Press/Releases/2026/FLIP%20301%20Investigation%20Final%20Action%20FRN%207-23-26%20FINAL.pdf

In symbols, let V be customs value, S the old surcharge and N the new duty. For a continuously taxed stratum, S = 0.10V and N = rV, where the positive new rate r cannot exceed 0.125 under this action. Matching exposureMatching exposureMatching exposure is the smaller of the old and new duties on the same entry stratum. is the smaller of S and N. When r is 10% or lower, the entire new duty matches. When r lies above 10% and no higher than 12.5%, the match share is 0.10 divided by r, reaching its lowest value of 0.80 at 12.5%. Source for the rate boundaries: https://ustr.gov/sites/default/files/files/Press/Releases/2026/FLIP%20301%20Investigation%20Final%20Action%20FRN%207-23-26%20FINAL.pdf

The MFN-linked caps do not break the range. For products of the European Union or Taiwan, the final action reduces the Section 301 duty so the MFN rateMFN rateThe most-favored-nation rate is the ordinary non-preferential tariff generally applied to imports from World Trade Organization members, apart from special trade-agreement rates. Source: https://www.wto.org/english/thewto_e/glossary_e/mfn_tariff_e.htm plus the new duty reaches 10%, and sets the new duty to zero when the MFN rate is already at least 10%. For products of Japan, South Korea or Switzerland, the equivalent ceiling is 12.5%. Any positive capped duty is therefore no greater than 12.5%, preserving the 80% to 100% conditional range. Source: https://ustr.gov/sites/default/files/files/Press/Releases/2026/FLIP%20301%20Investigation%20Final%20Action%20FRN%207-23-26%20FINAL.pdf

The Section 122 proclamation made the temporary surcharge effective on February 24, 2026, and stated that Section 122 permits such a surcharge for no more than 150 days unless Congress extends it. USTR initiated the separate set of 60 Section 301 investigations on March 12, made its findings on June 2 and published its proposed action on June 5. The President directed the final action on July 23, one day before the new duties became applicable. Sources: https://www.federalregister.gov/documents/full_text/html/2026/02/25/2026-03824.html; https://ustr.gov/sites/default/files/files/Press/Releases/2026/FLIP%20301%20Investigation%20Final%20Action%20FRN%207-23-26%20FINAL.pdf; https://www.whitehouse.gov/presidential-actions/2026/07/actions-by-the-united-states-in-the-investigations-under-section-301-of-the-trade-act-of-1974-of-the-acts-policies-and-practices-of-60-economies-related-to-the-failure-of-each-economy-to-impose-and/

The timing explains why the rates invite comparison, but timing alone does not establish that one policy caused the other or that the new policy will produce the same economic effects. It establishes only that the two written schedules changed at the same stated time.

The old surcharge did not cover every import. The proclamation excluded listed products and circumstances, including pharmaceuticals and pharmaceutical ingredients, specified goods subject to Section 232Section 232Section 232 is a separate authority covering imports determined to threaten national security; specified products subject to Section 232 measures are excluded from the duties studied here. Sources: https://www.federalregister.gov/documents/full_text/html/2026/02/25/2026-03824.html and https://ustr.gov/sites/default/files/files/Press/Releases/2026/FLIP%20301%20Investigation%20Final%20Action%20FRN%207-23-26%20FINAL.pdf measures, qualifying duty-free goods of Canada and Mexico, and a short transit window. Source: https://www.federalregister.gov/documents/full_text/html/2026/02/25/2026-03824.html

The new Section 301 action also contains extensive exemptions, including a transit exceptiontransit exceptionA transit exception protects qualifying goods already on their final journey before a new tariff's start time from that new tariff. Source: https://ustr.gov/sites/default/files/files/Press/Releases/2026/FLIP%20301%20Investigation%20Final%20Action%20FRN%207-23-26%20FINAL.pdf, Chapter 98 treatment, specified product exclusions, certain pharmaceutical-use exclusions, Section 232-related exclusions and qualifying duty-free goods of Canada and Mexico. Its rules are not identical to the Section 122 list. For example, the final notice explains that exemptions for certain chemical products were limited to pharmaceutical applications rather than every application. Source: https://ustr.gov/sites/default/files/files/Press/Releases/2026/FLIP%20301%20Investigation%20Final%20Action%20FRN%207-23-26%20FINAL.pdf

That difference creates more than one path through the switch. A stratum taxed under both rules falls within the headline's 80% to 100% range. A stratum exempt before but taxed now has a 0% match because none of its new duty was previously present. A stratum with a zero new duty contributes nothing to the denominatordenominatorThe denominator is the quantity beneath the division line, which in the match-share calculation is the new duty.. These cases must be classified before anyone can calculate an aggregate result.

The Census merchandise-import files are detailed but aggregated. The published record layout includes a 10-digit HTS codeHTS codeAn HTS code identifies a product in the US tariff schedule, with eight digits defining a legal tariff line and ten digits adding statistical detail. Source: https://www.usitc.gov/tariff_affairs/about_hts.htm, country of origin, country subcode, customs district, rate provisionrate provisionA rate provision is a Census code indicating whether a trade record used an ordinary, preferential, Chapter 99 or other duty treatment. Source: https://www.census.gov/foreign-trade/reference/codes/rp.html, statistical month, customs value, dutiable value and calculated dutycalculated dutyCalculated duty is Census's estimate based on tariff-schedule rates and does not necessarily equal the amount ultimately paid. Source: https://www.census.gov/foreign-trade/reference/definitions/index.html. Census's API likewise publishes commodity, country, value and calculated-duty variables. Sources: https://www.census.gov/foreign-trade/data/IMDB.html; https://www.census.gov/foreign-trade/reference/products/im145.html; https://api.census.gov/data/timeseries/intltrade/imports/hs/variables/.html

Those fields can support a strong first-pass map from country and product to tariff treatment. They do not, however, list every condition in the final notice. In particular, the cited general monthly layout does not identify whether every affected chemical was entered for a pharmaceutical application, nor does it provide the precise loading and entry timestamps needed to test the July 24-28 transit exception shipment by shipment. Source for those legal conditions: https://ustr.gov/sites/default/files/files/Press/Releases/2026/FLIP%20301%20Investigation%20Final%20Action%20FRN%207-23-26%20FINAL.pdf

Calculated duty also needs caution. Census says its calculated-duty estimates do not necessarily reflect the amount actually paid and can be overstated or understated in specified circumstances. That warning rules out treating the public field as a clean ledger of cash collections. Source: https://www.census.gov/foreign-trade/reference/definitions/index.html

The aggregate formula is straightforward once every entry stratum has been classified. Add the smaller of the old and new duties across all strata, then divide by total new duty. The complication is not the division. It is determining which goods belonged in each old and new legal category.

Let q represent the share of new-duty dollars coming from strata that paid no Section 122 surcharge. Let c represent the weighted match share among strata taxed under both rules. The aggregate match share is c multiplied by 1 minus q. If q is zero, the aggregate remains between 80% and 100%. If q is positive, the aggregate can fall below 80%. The sensitivity chart shows the arithmetic without pretending that the public files reveal q.

The scenarios are not forecasts. They demonstrate why a correct entry-level result cannot be promoted into a claim about all covered imports without measuring the new-duty dollars generated by previously exempt strata.

The finding describes statutory exposurestatutory exposureStatutory exposure is the duty implied by the written tariff rules before refunds, enforcement differences or changes in importer behavior.: the additional duty implied by two written tarifftariffA tariff is a customs duty on imported merchandise, commonly calculated as a percentage of value or as a fixed amount per unit. Source: https://www.census.gov/foreign-trade/reference/definitions/index.html schedules for otherwise identical import characteristics. It does not estimate how importers will change suppliers, quantities, classifications, shipment timing or use of trade programs.

It also does not measure pass-throughpass-throughPass-through is the share of a tariff change that appears in prices paid by importers, retailers or consumers rather than being absorbed elsewhere.. A $2.50 increase in written duty on a hypothetical $100 entry does not by itself show whether the importer, foreign producer, retailer or consumer ultimately bears that amount. Measuring that economic effecteconomic effectAn economic effect is a change in outcomes such as import volumes, business costs, consumer prices, employment or production. would require observed prices, contracts, margins and quantities after the switch.

A market reactionmarket reactionA market reaction is a change in traded asset prices, such as stocks, bonds or currencies, following news. would be a movement in securities, currencies or other traded prices following the announcement. This analysis uses no market-price data and makes no claim about such a reaction.

Finally, USTR states that the Section 301 action is intended to address investigated failures involving forced-labor import prohibitions. The 80% to 100% overlap calculation cannot show whether the tariffs reduce forced labor, improve enforcement abroad or eliminate the practices USTR found actionable. Those are causal questions requiring later evidence. Source for USTR's stated action and rationale: https://ustr.gov/about/policy-offices/press-office/press-releases/2026/july/ustr-takes-action-forced-labor-section-301-investigations