US Rebuilds Tariff Wall With New 10–12.5% Duties on 60 Economies, Reshaping Agri-Food Trade

The United States has activated a new round of Section 301 import tariffs of 10% and 12.5% on goods from roughly 60 trading partners, effective July 24, 2026, immediately replacing the expiring temporary 10% global tariff. The measures, framed as a response to failures to curb forced labor in supply chains, will keep most US-bound non-exempt imports under double‑digit duty rates and could materially alter agricultural and food trade flows over the coming months.

While key raw materials such as oil, gas, fertilizers, critical minerals and certain food products are exempt, many processed foods, beverages and intermediate agri-inputs will face higher landed costs. For exporters in Asia, Latin America and parts of Europe, the new structure shifts the competitive landscape in the world’s largest food-importing market.

Introduction

On July 23, the Office of the US Trade Representative (USTR) confirmed final action under Section 301 against 60 economies for failing to impose and enforce bans on imports made with forced labor. The announced tariffs of 10% or 12.5% apply broadly across product lines, with specific exclusions by HS code, and take legal effect from July 24, just as President Trump’s temporary 10% global tariff under Section 122 expires.

Trading partners with at least partial forced-labor prohibitions, including the UK, Canada, Mexico and several emerging Asian and Latin American suppliers, are generally assigned the lower 10% rate. Others, such as China, Vietnam and Brazil, face the higher 12.5% duty. For the EU, Japan, South Korea, Taiwan and Switzerland, Section 301 duties are calibrated on top of existing MFN rates to bring the combined tariff to 10% or 12.5%.

Immediate Market Impact

The new regime preserves an almost continuous double‑digit tariff environment on most US imports, removing the risk of a duty gap that could have briefly lowered costs for overseas shippers. For agricultural products not covered by exemptions, importers now face a structurally higher floor for landed prices, with immediate pass‑through likely in value‑added food, beverages and feed ingredients.

Short term, the announcement is expected to shift buying patterns away from 12.5% economies toward 10%‑rated or exempt suppliers, where substitutable origin exists. Volatility in US import demand for key bulk and containerized agri-food items may increase as traders reassess margin structures, adjust origin blends, and renegotiate supply contracts signed under the expiring 10% global tariff program.

Supply Chain Disruptions

Customs brokers and logistics providers anticipate near‑term congestion as new tariff codes and exclusions are implemented, with elevated risk of classification disputes at US ports. Shipments sailing under contracts priced on the old 10% global rate may arrive to find different effective duties depending on origin and product‑level exemptions, complicating release and invoicing.

Regions facing 12.5% tariffs on a wide range of manufactured and semi‑processed foods, notably China, Vietnam and Brazil, could see reduced US orders and potential cargo rollovers or re‑routing as buyers switch origin. Conversely, 10%‑rated origins and exempt categories may experience a demand spike, straining capacity in some segments and tightening container and reefer availability on US‑bound lanes.

Commodities Potentially Affected

• Processed foods and canned goods: Many are not explicitly exempt and will absorb the full 10%–12.5% duty, eroding price competitiveness for Asian and Latin American suppliers in US retail and foodservice channels.
• Snack foods, confectionery and bakery inputs: Value‑added items from 12.5% origins could lose share to 10%‑rated suppliers or US manufacturers as buyers re‑optimize sourcing.
• Beverages (juices, coffee preparations, alcoholic drinks): While some basic agricultural inputs may be exempt, many processed beverages are likely covered, raising shelf prices and encouraging substitution by domestic or preferential-origin products.
• Animal feed ingredients and additives: Certain specialized feed components and premixes imported from Asia and Europe may face higher duties unless explicitly exempted as critical inputs, pressuring US livestock production costs.
• Textiles and packaging materials for food: Non‑food inputs such as packaging films, cartons and textile-based materials from 12.5% economies will become more expensive, indirectly lifting costs across food manufacturing and export packing chains.
• Exempt raw commodities (oil, gas, fertilizers, select foods): These are shielded from the new tariffs, preserving cost structures in upstream agri‑inputs and limiting second‑round inflation in basic farm and processing operations.

Regional Trade Implications

Economies assigned the 10% rate, including Canada, Mexico, the UK, India, Bangladesh, Indonesia and others with partial forced‑labor bans, are relatively better positioned to maintain or expand market share in tariff‑sensitive food and agri‑processing categories. Their relative advantage is amplified in segments where 12.5% competitors export similar SKUs with limited brand or quality differentiation.

Suppliers from China, Vietnam, Brazil and other 12.5% economies face a steeper hurdle in price‑competitive bulk and semi‑processed foods, and may pivot toward alternative markets in Asia, the Middle East and Latin America if US demand softens. For the EU, Japan, South Korea, Taiwan and Switzerland, the calibration of Section 301 duties to reach an effective 10% or 12.5% depending on existing MFN rates may produce uneven impacts by product, encouraging exporters to prioritize categories with lower composite duties.

Market Outlook

In the near term, traders should expect classification uncertainty, shifting origin mixes and potential basis volatility in processed food and feed markets most exposed to 12.5% origins. Price discovery for new‑crop and 2027 calendar contracts into the US will now need to embed durable Section 301 premiums, especially where future exemptions are unlikely.

Over the medium term, the policy may accelerate investment in US and North American processing for select agri‑food categories, while incentivizing 10%‑rated and exempt economies to deepen compliance with forced‑labor rules to secure or enhance access. Traders will closely watch any product‑level exclusion updates, legal challenges, and potential retaliatory measures from affected partners, all of which could further reshape global agri‑trade flows and pricing structures.

CMB Market Insight

The US decision to entrench double‑digit Section 301 tariffs on 60 economies marks a structural rather than temporary shift in the trade cost baseline for many agri‑food products entering the US. While exemptions for oil, gas, fertilizers, critical minerals and some foods help contain upstream inflation, higher duties on processed items and intermediate inputs will re‑draw competitive lines among origins, particularly between 10% and 12.5% suppliers.

For commodity traders, importers and food manufacturers, the key strategic tasks will be rapid re‑mapping of origin risk, renegotiation of long‑term contracts, and closer monitoring of product‑specific exclusion lists and any retaliatory actions. Those able to pivot quickly toward advantaged origins and to optimize tariff engineering within compliant supply chains will be best placed to manage margin pressure and capture emerging arbitrage in the reconfigured US‑centric agri‑trade landscape.