USTR's 99.4% is a map of trade partners, not a measure of imports owing its new tariff

USTR's 99.4% figure answers a geographic question: how much U.S. import activity comes from the 60 economies named in the action? It does not answer the legal question facing an importer: does this particular entry owe a Section 301Section 301Section 301 permits the United States to respond to foreign government practices that USTR finds unreasonable or discriminatory and burdensome to U.S. commerce. duty, and at what rate? The distinction is visible in USTR's own documents. The [fact sheet](https://ustr.gov/about/policy-offices/press-office/fact-sheets/2026/july/fact-sheet-ustr-section-301-action-response-failure-60-economies-ban-imports-produced-forced-labor) presents 99.4% as the import coverage of the targeted partners, while the [legal notice](https://ustr.gov/sites/default/files/files/Press/Releases/2026/FLIP%20301%20Investigation%20Final%20Action%20FRN%207-23-26%20FINAL.pdf) applies exemptions and formulas at the product and customs-entry level.

Think of the 99.4% as a map shaded by country. A customs calculation is closer to an itemized receipt: it needs the product, its legal origin, its ordinary tarifftariffA tariff is a tax charged when an imported product enters a country's domestic market., any trade preferencetrade preferenceA trade preference gives a qualifying import a lower tariff than the ordinary rate., any special tariff treatment and the date and status of the entry. A country can be shaded on the map even when a particular product from that country owes no Section 301 duty.

The fact sheet does not state the reference year behind 99.4%, whether the denominator is general importsgeneral importsGeneral imports count physical arrivals, including goods placed in bonded warehouses or foreign-trade zones before domestic clearance. or imports for consumptionimports for consumptionImports for consumption are goods cleared into the U.S. market immediately or after withdrawal from a bonded warehouse or foreign-trade zone., whether it uses customs valuecustoms valueCustoms value is generally the price paid for imported merchandise, excluding U.S. duties and international freight and insurance. or another value measure, or whether any exclusions were removed. Those choices matter. The [Census Bureau](https://www2.census.gov/programs-surveys/trade/reference/definitions/index.html) defines general imports as physical arrivals, including goods put into warehouses and foreign-trade zones, while imports for consumption count goods when they clear into the domestic market.

The new duties apply to products entered for consumption or withdrawn from warehouse for consumption. A gross general-import share can therefore include goods that have arrived but have not yet reached the point at which the new duty is determined.

USTR's [July 23 announcement](https://ustr.gov/about/policy-offices/press-office/press-releases/2026/july/ustr-takes-action-forced-labor-section-301-investigations) places 17 economies in a generally applicable 10% group. Five economies use product-level formulas. Subtracting those 22 from the 60 investigated economies leaves 38 in the generally applicable 12.5% group. Every group remains subject to exemptions.

The five formula economies are the European Union, Taiwan, Japan, South Korea and Switzerland. For a nonexempt European Union or Taiwan product with an MFN rate below 10%, the Section 301 duty fills the gap between that rate and 10%. If the MFN rate is already at least 10%, the new Section 301 addition is zero. The corresponding target for Japan, South Korea and Switzerland is 12.5%. These are formulas, not flat additions.

The formula is easy to picture as a measuring cup. The ordinary MFN tariff already occupies part of the cup, and the new Section 301 duty fills it only to the target line. A product with a high enough MFN rate receives no additional Section 301 duty, even though its economy is fully included in USTR's 99.4% geography.

The five formula economies supplied 35.5% of gross 2025 Census-basis U.S. goods imports, according to a Cumulant calculation using the Census Bureau's [revised annual trade tables](https://www.census.gov/foreign-trade/Press-Release/ft900/final_2025.pdf). That share combines $632.9 billion from the European Union, $201.4 billion from Taiwan, $145.8 billion from Japan, $125.5 billion from South Korea and $106.2 billion from Switzerland, divided by $3.415 trillion in total Census-basis goods imports.

This calculation is deliberately labeled as context, not tariff exposure. It shows why the difference between a country rule and a product rule is economically consequential. It cannot show which products were exempt, which ordinary rates applied or which imports used a special tariff treatment.

The [prepublication noticeprepublication noticeA prepublication notice is an agency's advance copy of a document prepared for publication in the Federal Register.](https://ustr.gov/sites/default/files/files/Press/Releases/2026/FLIP%20301%20Investigation%20Final%20Action%20FRN%207-23-26%20FINAL.pdf) excludes informational materials, donations and accompanied baggage. It also excludes specified products and articles subject to listed Section 232 measures, including covered metals, vehicles and other enumerated goods.

Qualifying Canadian and Mexican goods entered free under USMCAUSMCAThe United States-Mexico-Canada Agreement is a trade agreement that can provide duty-free treatment to qualifying Canadian and Mexican goods. are excluded from the Section 301 duties. The notice also excludes qualifying textile and apparel goods from Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua when they enter free under CAFTA-DRCAFTA-DRCAFTA-DR is a trade agreement covering the United States, the Dominican Republic and six Central American countries.. Additional country-specific product lists create further exclusions.

These rules do not imply that most imports are exempt. USTR says the tariffs apply to most imports from covered economies, but it does not publish a value-weighted exemption calculation in the fact sheet. Without that calculation or a record-level replication, replacing 99.4% with another exact coverage percentage would be guesswork.

The temporary Section 122Section 122Section 122 is a Trade Act authority that permits a temporary import surcharge of up to 15% for no more than 150 days unless Congress extends it. surcharge began at 12:01 a.m. eastern time on February 24 and was scheduled to continue through 12:01 a.m. eastern time on July 24. The [presidential proclamation](https://www.federalregister.gov/documents/full_text/html/2026/02/25/2026-03824.html) set the surcharge at 10% for 150 days, with numerous exceptions.

The new Section 301 duties became applicable at 12:01 a.m. eastern time on July 24. The matching timestamps create a legal handoff, but not every shipment switched immediately. The Section 301 notice exempts qualifying goods that had been loaded onto a vessel and were already in transit before the effective time if they enter for consumption or are withdrawn from warehouse before 12:01 a.m. eastern time on July 28.

That exception is narrow. The notice describes vessel cargo and imposes both a pre-effective-date transit condition and a July 28 entry deadline. It should not be generalized to every shipment that happened to arrive during the four-day interval.

A defensible statutory-exposure estimate would begin with a fixed basketfixed basketA fixed basket holds the same country-product import mix constant so that two tariff systems can be compared without changes in buying patterns distorting the result. of imports for consumption. Each record would be matched by country of origin, 10-digit HTS product code and rate-provision coderate-provision codeA rate-provision code identifies whether a customs record used an ordinary, preferential, warehouse or Chapter 99 tariff treatment.. The product code would identify exemptions and Section 232 treatment; the rate-provision code would help identify ordinary, preferential, warehouse and Chapter 99Chapter 99Chapter 99 is the part of the tariff schedule used for temporary or special import measures, including many additional tariffs. treatment.

For each record, the analyst would assign the Section 301 rate specified by the notice. Flat-rate records would receive 10% or 12.5% unless exempt. Records from the five formula economies would receive the applicable target minus the MFN rate, with a floor of zero. USMCA and CAFTA-DR exclusions and the transit rule would then be applied where the data establish eligibility.

The numerator would be the customs value of records assigned a positive Section 301 duty. The denominator would be the customs value of all imports for consumption in the same basket. Comparing the old and new regimes would require applying both legal systems to those same records, so that changes in sourcing or purchasing do not masquerade as changes in law.

The Census merchandise files contain country, product, consumption value, dutiable valuedutiable valueDutiable value is the customs value of imported merchandise that is subject to a duty. and calculated-duty fields, while the detailed layout includes the rate-provision code. The [Federal Reserve's tariff-gap methodology](https://www.federalreserve.gov/econres/notes/feds-notes/mind-the-gap-announced-versus-implied-tariff-rates-in-recent-trade-policy-episodes-20260408.html) uses the same broad principle: read the legal actions at the country-product level, account for announced exemptions and separate a fixed-basket policy measure from the duty rate realized after import behavior changes.

This analysis concerns statutory liability. It does not estimate tariff revenue, consumer prices, production, employment or the economic burden shared between U.S. buyers and foreign sellers. Those are different questions requiring post-implementation data and, for causal claims, a credible comparison that separates the tariff from other changes.

It also does not describe a market reaction. A movement in stocks, currencies or bond yields after the announcement would be evidence about investor expectations, not proof of the tariff's eventual economic effect.

Research on the 2025 tariffs illustrates the distinction. A [New York Fed analysis](https://libertystreeteconomics.newyorkfed.org/2026/02/who-is-paying-for-the-2025-u-s-tariffs/) defines tariff incidencetariff incidenceTariff incidence describes how a tariff's economic cost is divided between foreign exporters and domestic firms or consumers. as the division of economic cost between foreign exporters and U.S. importers. That is separate from the customs question of which importer owes a duty on which entry.

USTR's 99.4% tells readers how broadly the action reaches across trading partners. It does not tell them how deeply the duty reaches into the value of U.S. imports.