A landmark moment is approaching in US-China trade relations. The second statutory four-year review of Section 301 tariffs, initiated by USTR on May 6, 2026, could result in the automatic termination of 25% duties on approximately $50 billion in Chinese imports — unless domestic industry representatives act before the July 5 and August 22 deadlines.
Key Facts
| Item | Details |
|---|---|
| Legal Authority | 19 USC § 2417(c) — Trade Act of 1974, Section 301 |
| Review Initiated | May 6, 2026 (Federal Register Notice) |
| List 1 Deadline | Continuation request by July 5, 2026 — otherwise terminates July 6 |
| List 2 Deadline | Continuation request by Aug 22, 2026 — otherwise terminates Aug 23 |
| Coverage | List 1: 1,097 HTS codes (~$34B/year) List 2: chemicals, plastics, metals (~$16B/year) |
| Current Rate | 25% additional duty on both lists |
| 178 Exclusions | Extended to November 10, 2026 |
How the Termination Mechanism Works
Under 19 USC § 2417(c), Section 301 tariff actions are not permanent. At each four-year anniversary, tariffs automatically terminate unless a domestic industry representative submits a written continuation request within the 60-day window before the anniversary date.
This is not hypothetical — Section 301 actions have previously terminated when no continuation request was filed. While domestic industries are likely to file requests, there is no guarantee.
Impact by Stakeholder
US Importers & Distributors
If tariffs on Lists 1 and 2 sunset, the landed cost of covered goods drops by up to 25% overnight. Importers should prepare contingency plans for both scenarios. Key: duty stacking remains complex — MFN base + Section 301 + Section 122 (through July 24) + Section 232 all apply.
E-Commerce & Marketplace Sellers
Amazon FBA and DTC brands importing List 1/2 products from China should monitor developments closely. A tariff sunset could meaningfully improve unit economics on affected SKUs.
Action Checklist
- Audit your HTS codes: identify which products fall under List 1 (9903.88.01) or List 2 (9903.88.02).
- Monitor USTR daily from late June through July 5 — continuation requests may come at any time.
- Build scenario models under both “tariffs continue” and “tariffs sunset” outcomes.
- Check exclusion eligibility: 178 product categories remain exempt through November 10, 2026.
- Review supplier contracts: add tariff-adjustment clauses to share risk.
Need to verify your HTS classifications amid the four-year review?
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