What Is Section 301?

Section 301 refers to a US trade tariff stack imposed on China-origin imports under Section 301 of the Trade Act of 1974. The tariffs were introduced in 2018 in response to US findings on Chinese trade practices, and have been actively maintained, modified, and expanded by every administration since.

For apparel brands importing from China, Section 301 is not optional reading. It is a surcharge stacked on top of the base HTS duty rate, and it materially changes landed unit cost.

How Section 301 works on apparel

US Customs and Border Protection (CBP) classifies every imported garment under an HTS (Harmonized Tariff Schedule) code. That HTS code carries a base duty rate, typically 10 to 32 percent for apparel.

If the garment's country of origin is China, an additional Section 301 tariff applies on top of the base duty. The exact Section 301 rate depends on which "list" the HTS code falls under (List 1, 2, 3, or 4A; Section 301 has been deployed in tranches).

For apparel specifically, almost every HTS code is covered under List 3 or List 4A, with surcharges typically in the 7.5 to 25 percent range. As of 2026 the apparel surcharge stack ranges roughly 7.5 to 15 percent depending on category, though political conditions can change this rapidly.

The landed-cost math

For a typical women's cotton knit top imported from China, the duty stack looks roughly like this:

1. HTS base duty: approximately 16.5 percent
2. Section 301 surcharge: approximately 7.5 percent
3. Total duty: approximately 24 percent of declared value

On a garment with a $5 FOB value, that is roughly $1.20 in duty. On a 10,000-unit order, that is $12,000 in duty cost before freight, customs brokerage, or terminal handling.

What Section 301 does not apply to

Three carve-outs to know:

1. Non-China origin. Apparel produced and sewn in Vietnam, Bangladesh, India, Cambodia, or other non-China origin escapes Section 301 entirely. They still pay the base HTS duty.
2. Exclusions list. Periodically, CBP publishes a "product exclusions" list that suspends Section 301 for specific HTS codes for a defined period. Apparel rarely makes the exclusions list, but it has happened in narrow categories. Always check the latest exclusions before assuming surcharge applies.
3. De minimis carve-out (now closed for China apparel). Pre-2025, individual shipments to consumers under $800 entered duty-free under de minimis. As of 2025, the de minimis carve-out no longer applies to apparel originating in China.

How Section 301 changes the sourcing decision

Some brands have responded to Section 301 by relocating sourcing to Vietnam, Bangladesh, or India. The math is not as simple as it sounds:

1. Vietnam: Lower base duty for many garment types under the US-Vietnam trade relationship, plus no Section 301. But Vietnamese factory pricing has risen sharply as demand has surged. Total landed cost often lands within 3 to 5 percent of post-tariff China pricing.
2. Bangladesh: Materially lower per-unit cost on basic knits and woven shirts. Less competitive on technical apparel, activewear, and intimates where construction complexity matters.
3. India: Strong on cotton-heavy categories. Weaker on knit-jersey construction and synthetic fabric programs.

For technically demanding categories (activewear, intimates, swimwear) China factory capability often outpaces alternatives by enough that Section 301 is the cost of access, not a reason to leave.

Duty drawback

US importers can recover up to 99 percent of paid Section 301 duty if the imported garment is subsequently exported (for example, drop-shipped from a US 3PL to a Canadian or Mexican consumer). The drawback process is administratively heavy. Most brands do not pursue it unless their export volume exceeds 20 percent of their import volume.

What Section 301 means for compliance

CBP audits classify under-declared shipments aggressively. Misclassifying a garment HTS code to avoid Section 301 is fraud, not a creative interpretation. Brands using "splitting" or "transshipment" schemes through third countries face CBP penalty proceedings and customs broker license revocations.

The right approach is correct classification, correct origin declaration, and transparent landed-cost math.

Related terms

• What is HTS classification covers the apparel-category codes that determine base duty.
• What is UFLPA covers the cotton-origin compliance regime that operates alongside Section 301.
• FOB vs CIF vs DDP for apparel imports walks through how shipping-term choice interacts with who pays the Section 301 duty.