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How To Handle Section 301 Tariffs When CBP Detains Goods

Washington just turned Section 301 into a forced-labor weapon — and it now collides with the UFLPA on the same shipment. CBP doesn’t coordinate the two. Here is how to sequence the conflict.

On July 23, the day before the administration’s temporary Section 122 global import surcharge was set to expire, U.S. Trade Representative Jamieson Greer announced it would be replaced with open-ended Section 301 duties, targeting forced labor compliance across 60 economies. The new rules set a two-tier penalty: a 10% tariff on nations with forced labor bans that Washington deems poorly enforced, and a 12.5% tariff on countries with no forced labor laws at all.

According to the USTR, the covered economies account for 99.4% of all U.S. imports. Thus for trade counsel, this is a seismic structural shift. Historically, importers treated the Uyghur Forced Labor Prevention Act and tariffs under Section 301 of the Trade Act as separate compliance headaches that occasionally collided by accident. The expansion of forced labor tariffs unites these compliance obligations.

Section 301 duties are now an explicit weapon against forced labor, sharing the UFLPA’s target but operating under a completely different legal mechanism. Consequently, importers simultaneously face two forced labor enforcement regimes.

They face the nontariff regime of the UFLPA, which empowers U.S. Customs and Border Protection to detain, exclude and prohibit goods. At the same time, they are subject to the broad tariff regime of Section 301, which taxes goods on entry.

Because U.S. Customs and Border Protection does not internally coordinate its admissibility holds and duty assessments, importers face an unprecedented operational dilemma: Pay tariffs on goods CBP might ultimately exclude, or hold entry and watch port demurrage compound daily.

// Geographic Scope

For years, corporate boardrooms may have viewed forced labor enforcement as a regional threat confined to China’s Xinjiang Uyghur Autonomous Region. The Section 301 action destroys that assumption by bringing top U.S. trading partners — including Canada, the European Union, the U.K., Australia and India — into direct Section 301 duty exposure.

Unlike the UFLPA, Section 301 does not require CBP to prove a regional link or issue a physical detention at the port. CBP may simply assess an immediate financial penalty at entry based on country of origin. Every importer that assumed forced labor risk was isolated to Far East supply chains must now consider whether it faces immediate duty liability on its general global trade.

// Financial Anatomy of the Uncoordinated Compliance Obligations

When a container landing at a U.S. port of entry is put under an UFLPA hold, two independent financial clocks begin ticking inside CBP.

One of CBP’s Centers of Excellence and Expertise reviews admissibility for most commercial shipments. CBP’s Forced Labor Division reviews admissibility and manages UFLPA detentions if there are suspected forced labor violations.

Under Title 19 of the U.S. Code, Section 1499, CBP has five business days to determine whether merchandise should be detained for examination to determine whether the merchandise was produced with forced labor in violation of Section 1307, and is therefore prohibited from entry under the UFLPA.

Once detained, goods are deemed excluded if not released within 30 days.

Concurrently, entry liquidation and duty collection run through local CBP port directors, where filing a formal consumption entry immediately triggers payment of estimated Section 301 duties.

Here is the operational breakdown: Port directors do not automatically refund Section 301 duties paid on merchandise that CEE officers ultimately exclude under the UFLPA.

If a standard consumption entry is filed to clear the cargo, the duty payment may sit with the U.S. Department of the Treasury for 12 to 18 months while the importer fights an administrative protest. If it holds back the entry to protect its capital, the cargo sits on the pier accruing terminal storage fees until it faces automatic statutory exclusion.

// Three Sequencing Strategies for Attorneys

Navigating this double bind requires evaluating corporate risk tolerance and supply chain documentation before choosing an entry pathway.

1. The Immediate Export Pivot

The immediate export pivot strategy is best suited for shipments with unverified, weak or structurally gapped supply chain tracing. With this approach, counsel directs the customs broker in writing to suspend automated consumption entry filings, and petitions the local port director for immediate exportation in-bond.

Immediate exportation in-bond is a transportation and exportation entry that moves the cargo to a U.S. port of exit under bond and exports it without a consumption entry or duty payment, preserving the importer’s ability to refile if the UFLPA issue is resolved.

Moving cargo in-bond eliminates Section 301 tariffs, merchandise processing fees and harbor maintenance fees entirely. While the importer absorbs freight and logistics losses, it avoids locking up entry capital, and keeps a formal exclusion record off its customs profile.

2. The Bonded Safe Harbor

The bonded safe harbor strategy serves importers with solid tracing that needs time to assemble evidence without paying $1,000 or more per day in ocean terminal demurrage. Counsel implementing this approach moves freight into a Class 3 bonded warehouse or foreign trade zone, using a type 21 warehouse entry.

A warehouse entry keeps goods outside U.S. commerce, deferring Section 301 duties while halting compounding port storage fees. If CBP approves admissibility, duties are paid upon withdrawal; if CBP denies entry, cargo can be exported directly from the facility without duty liability.

3. The Protest and Void Track

Well-capitalized importers with ironclad supply chain tracing that cannot afford factory line shutdowns and have the liquidity to float duty payments, may want to move cargo directly into commerce, potentially protesting duties later.

In this case, counsel files a formal consumption entry, pays the Section 301 duties and fights the UFLPA detention. If CBP excludes the shipment, counsel files an administrative protest under Title 19 of the U.S. Code, Section 1514, arguing that a legally prohibited entry was void ab initio.

This strategy keeps freight moving where permitted, however, counsel must advise clients that their Section 301 capital will remain with the Treasury for 12 to 18 months while CBP reviews the protest.

// Mitigating Collateral Customs Risks

Continuous customs bonds are calculated at 10% of total duties, taxes and fees paid over the preceding 12 months. With Section 301 forced labor tariffs of 10% to 12.5% hitting most U.S. imports, almost every importer’s trailing bond calculation has changed overnight. Global entry volumes will rapidly exhaust bond limits across the board.

If CBP issues an insufficiency notice, importers have 30 days to secure higher surety coverage before their entry privileges are frozen nationwide.

Additionally, importers enrolled in CBP’s Customs Trade Partnership Against Terrorism trade compliance program may qualify to hold detained shipments at authorized domestic facilities rather than surrendering freight to CBP custody. Counsel must confirm specific facility authorization before moving cargo to prevent automated redelivery demands.

// Day-One Counsel Response Protocol

Executing an immediate response protocol is essential to preserving importer capital and procedural rights. First, direct the customs broker in writing to immediately suspend automated entry filings, preventing accidental payment of Section 301 duties on detained freight.

Second, determine whether CBP flagged the hold based on a presumption that the goods contain inputs sourced from the Xinjiang Uyghur Autonomous Region — a supply chain-level suspicion — or affirmative direct evidence linking the goods to a specific prohibited producer or entity-listed supplier. The rebuttal documentation required differs significantly between the two.

This distinction determines whether the standard 30-day detention clock applies or immediate exclusion is imminent.

Third, counsel should bifurcate all communications, sending supply chain tracing packages directly to CEE or Forced Labor Division units while routing logistics, bonded movement and storage requests through local port directors.

Fourth, immediately conduct a bond audit, recalculating the client’s 12-month trailing duty exposure under the new 99.4% global tariffs, to anticipate and prevent automated bond insufficiency holds.

Finally, provide executive leadership with a day-one financial comparison, showing export costs, capital deferral and floating liquidity, as applicable, under the three strategies described above.

// Conclusion

The overlap between UFLPA admissibility holds and Section 301 duty assessments is a structural feature of two enforcement regimes that share a target, but operate under completely different legal authorities with no shared infrastructure.

The three strategies above sequence this conflict. Mapping a client’s supply chain documentation quality, liquidity position and bond exposure before a detention notice arrives can help you respond more quickly.

Practitioners should avoid conflating UFLPA detentions and Section 301 tariffs. The USTR action on July 24 did not expand what the UFLPA prohibits. It expanded what Section 301 taxes.

The two compliance regimes operate differently. The UFLPA creates a rebuttable presumption that bars entry entirely; Section 301 imposes a duty on goods that clear customs. A single shipment can be both detained under UFLPA and subject to Section 301 deposits if it is released. It is important to be cognizant of the distinction when advising at the port.

Originally published in Law360 Expert Analysis on August 10, 2026, as “How To Handle Section 301 Tariffs When CBP Detains Goods.” © 2026 James R. Ferry II; republished by the author. Law360® is a registered trademark of Portfolio Media, Inc. The opinions expressed are those of the author and do not necessarily reflect the views of any employer, its clients, or Portfolio Media, Inc. This article is for general information purposes and is not intended to be and should not be taken as legal advice.