The July 23 Section 301 forced-labor tariff action includes an important provision for textile and apparel importers sourcing from Bangladesh, Cambodia, Indonesia, and Malaysia: USTR has been directed to establish tariff-rate quotas (TRQs) that could allow specified volumes of qualifying goods to enter free of the additional 10% Section 301 duty.
The TRQs are not yet operational, however, and USTR has indicated that establishing them is expected to become feasible by September 1, 2026. Until USTR establishes the TRQs and announces their effective date, the 10% Section 301 duty continues to apply to the textile and apparel goods that will ultimately be covered.
Why These Four Countries
The TRQ mechanism applies specifically to Bangladesh, Cambodia, Indonesia, and Malaysia, all of which are currently subject to a 10% Section 301 forced-labor tariff.
Other major textile and apparel sourcing countries, including Vietnam, China, and India, are not included in this TRQ mechanism.
The TRQs would create a separate pathway allowing specified volumes of qualifying textile and apparel goods from the four countries to enter free of the additional Section 301 duty.
How the TRQs Are Supposed to Work
Under the July 23 White House memorandum, once USTR determines that establishing the TRQs is feasible, it is directed to:
- Establish TRQs for Bangladesh, Cambodia, Indonesia, and Malaysia with an initial duration of three years.
- Allow a specified volume of qualifying textile and apparel goods from each country to enter the United States free of the additional Section 301 tariffs.
- Base the duty-free volumes on each country’s imports of U.S. textile inputs and U.S. cotton.
The duty-free volume will therefore be tied to each country’s imports of U.S. cotton and textile inputs, although USTR has not yet published the formula it will use to calculate those volumes.
The stated goal is to encourage these trading partners to purchase more U.S. cotton and textile goods and reduce reliance on inputs from sources considered more likely to involve forced labor.
Current Status: TRQs Not Yet Established
USTR has advised that establishing the TRQs is not currently feasible but is expected to become feasible by September 1, 2026.
That does not necessarily mean the TRQs will take effect on September 1.
The White House memorandum directs USTR to establish the TRQs as soon as it determines implementation is feasible and to publish a Federal Register notice announcing their establishment and effective date.
No specific quota volumes, final product scope, effective date, or implementation procedures have been published yet.
Until USTR formally establishes the TRQs, the applicable 10% Section 301 duty continues to apply to textile and apparel imports from Bangladesh, Cambodia, Indonesia, and Malaysia that will ultimately be covered by the quotas.
What Importers Should Do Now
- Continue budgeting for the 10% Section 301 duty. The TRQs are not yet operational, and September 1 represents USTR’s expected feasibility timeline, not a guaranteed effective date.
- Review your sourcing and supply chain. Importers should understand whether their suppliers in Bangladesh, Cambodia, Indonesia, or Malaysia use U.S. cotton or other U.S. textile inputs, since future TRQ volumes will be tied to each country’s imports of those products.
- Watch for USTR’s Federal Register notice. The notice establishing the TRQs should provide critical details, including the effective date, applicable products, quota volumes, and implementation requirements.
- Do not assume other sourcing countries will qualify. The TRQ mechanism established by the July 23 action specifically names Bangladesh, Cambodia, Indonesia, and Malaysia. Vietnam, China, India, and other major textile sourcing countries are not included.
Sourcing From Bangladesh, Cambodia, Indonesia, or Malaysia?
ASK Alba™: Alba’s trade compliance team can help you monitor the TRQ rollout, evaluate your sourcing exposure, and model the potential duty impact as implementation details become available.
References
Federal Register: Notice of Actions in Section 301 Investigations – Forced Labor (July 28, 2026)
White House: July 23 Presidential Memorandum on Section 301 Forced-Labor Actions
Alba: Section 301 Forced-Labor Tariffs Take Effect July 24: What Importers Need to Know
