New Tariffs, New Legal Ground

On July 24, 2026 — the very day a sweeping new set of Section 301 forced-labor tariffs took effect — NAMM convened its recurring expert panel to walk members through what changed overnight, what it means for the music products industry and what actions can be taken. As always, the discussion was for educational purposes only.

Joining the conversation were:

Chris Cushing, Managing Partner, Washington, D.C. office of Nelson Mullins (NAMM's outside trade counsel of 20 years)
Cullen Hendrix, Senior Fellow, Peterson Institute for International Economics
Dan Anthony, President, Trade Partnership Worldwide, and leader of the We Pay the Tariffs Coalition
Jon Gold, Vice President of Supply Chain and Customs Policy, National Retail Federation

How We Got Here

The panel opened with a quick timeline. The administration's original tariff authority, built on the International Emergency Economic Powers Act (IEEPA), was struck down by the Supreme Court. In the interim, the administration used Section 122 to impose a 150-day, 10% global tariff — a stopgap that expired at 12:01 a.m. on July 24. Rather than leave a gap, USTR moved immediately to new Section 301 forced-labor tariffs, which the panel generally agreed rests on firmer legal footing than IEEPA did since Section 301 explicitly delegates tariff authority to the executive branch.

Cullen Hendrix noted that the investigation measured only whether countries have adopted a forced-labor regulatory process similar to the U.S. — not whether forced labor actually occurs in their economies — which is why supporters and critics alike expect litigation. Twenty-two Democratic state attorneys general filed comments during the process and are seen as likely first movers on a legal challenge. Notably, near the end of the session Dan Anthony flagged breaking news that the Liberty Justice Center — which successfully challenged the IEEPA and 122 tariffs — had just filed suit against the new 301 action, as well.

Several points raised in the discussion may bolster future court challenges:

More than half the countries flagged in the Department of Labor's own annual forced- and child-labor report were excluded from the new tariffs.
Tariff levels don't vary meaningfully with the actual likelihood of forced labor in a given country's exports.
The administration's own public statements — describing the action as "recreating" the IEEPA tariffs — undercut the claim that this is a genuine, independent forced-labor finding.
The recent overturning of Chevron deference could weaken agencies' latitude to defend their own interpretive findings in court.

The New Rates — and What's Exempt

Under the new structure, countries fall into tiers: Those that have taken some action on forced labor got a 10% rate, and those that haven't received a 12.5% rate, with additional variability tied to existing reciprocal trade agreements. Panelists pointed out the irony that China — where the bulk of global forced-labor concerns are concentrated — landed at the lower 12.5% tier alongside countries with far less exposure.

Key mechanics members should know:

No coverage gap. Goods already loaded and in transit before the effective date, and entered for consumption before July 28, remain subject only to the old 10% Section 122 rate — not the new tariff. Anything shipped domestically (e.g., truck from Canada) or by air that departs after July 24 is subject to the new 301 rate.
USMCA-qualifying goods are excluded from the new tariff; non-qualifying goods are hit with the MFN rate plus the new duty.
Section 232 exclusivity: If a product is already subject to Section 232 tariffs (steel, aluminum, etc.), it is not subject to the new 301 forced-labor tariff. This is the one guaranteed offset in the system — everywhere else, multiple tariff actions are cumulative rather than mutually exclusive, so members shouldn't assume that paying one tariff shields them from another. (See the Brazil section below, where two separate 301 actions can apply to the same product at once.)
Exempted categories include essential energy products, critical minerals, select pharmaceuticals, advanced technology components, semiconductors, servers and specific agricultural/food products. An additional 471 products were added to the exemption list after the comment period closed, including certain seeds, hides, leather, wood products and HTS Chapter 97 (art, antiques and collectibles).
Musical instruments (Chapter 92) were not included on the exemption list, despite NAMM's formal comments requesting inclusion.
Sheet music/informational materials: Panelists said they believe items exempted under IEEPA as "informational materials" (to avoid First Amendment complications) likely carry that same exemption forward into the new 301 action, though this wasn't tested with certainty.
Antiques: Classification is strictly one HTS code per product — there's no cross-referencing between chapters. An antique instrument would need to genuinely qualify under Chapter 97 to get exemption treatment; members considering this route were encouraged to seek a formal customs ruling rather than self-classify.

Asked directly why musical products keep missing the cut for relief, the panel's read was candid: The administration is granting exemptions largely where U.S. affordability or domestic manufacturing capacity is at stake (fertilizer for farmers, energy costs, etc.) — not based on advocacy volume — and mostly through political negotiation rather than product-level factual demonstration. The panel's practical advice remains unchanged: Keep engaging lawmakers, especially Republican lawmakers.

Canada (Section 338)

Beyond the widely reported friction, Canada is now also facing a Section 338 action — a rarely used, 1930 authority that panelists view as being on shaky legal ground given its lack of precedent. It applies to a relatively small slice of trade (roughly 5% of imports) but does reach USMCA-covered goods, with an idiosyncratic product list. The panel's consensus: This is fundamentally a negotiating tactic aimed at pulling Canada back to the USMCA table, compounded by the fact that Canada is one of the only countries to have retaliated against U.S. tariffs. Further Canadian retaliation was viewed as likely if the tariffs proceed.

Brazil: Two Overlapping Actions

Brazil is now subject to two concurrent Section 301 actions — one tied to forced labor, one tied to a separate set of digital-trade and other grievances (including Brazil's free alternative payment system, which has drawn pushback from major card networks). Panelists confirmed these two actions do stack for Brazilian-origin goods not otherwise exempted (though both still respect the Section 232 carve-out). Musical instruments are not exempt, though exotic tonewoods not grown domestically do carry an exemption — layered with existing CITES and Lacey Act complexities that specialist importers are generally already well-versed in.

Panelists noted the Brazil action affects only about 18% of Brazil's exports (with categories like coffee, orange juice and aircraft parts exempted, and roughly 78% of imports from Brazil already duty-free) and offered a political read: Retaliation is considered unlikely, in part because it may serve the domestic political interests of Brazil's current government heading into an election.

Practical Next Steps for Members

The panel's recommended action items:

Confirm country of origin and HTS classification for every imported product line.
Work closely with your customs broker — many are reporting they are not yet fully ready for the rapid rate changes.
Check whether your products fall under any exemption or annex and understand that Section 301 forced-labor tariffs do not stack with Section 232.
If sourcing from the EU, UK, Switzerland or Taiwan, watch for art/antique-linked exemption pathways.
If sourcing from Brazil, flag the dual-action stacking issue specifically.
For suspected misclassification or erroneous billing, that is fundamentally a broker/CBP resolution issue — engage your broker and, if needed, trade counsel.

Beyond Today's Tariffs: What's Next

The panel closed with a rapid-fire look at what else is in motion:

A new EU investigation: During the session, news broke that the administration is opening a fresh Section 301 investigation into the EU over penalties levied against U.S. tech companies.
Excess capacity investigations covering 16 countries plus the EU on solar and chips remain pending — this is unlikely to be the last 301 action members see this year.
Durability of the tariffs: It was noted that with U.S. debt approaching $40 trillion, pulling back on 301 tariffs (once legally settled) could unsettle bond markets — meaning these tariffs may persist across administrations, much as China-specific Section 301 tariffs carried over from the first Trump administration through the Biden administration, according to the panel
A possible new tariff authority: Language under consideration in the Russia sanctions bill (moving in memory of the late Senator Lindsey Graham) would let the president impose tariffs up to 100% on the top five importers of Russian crude and gas — a group that could include China, India, South Korea and EU member states. NAMM's panelists said they’re watching this closely, and NRF is pushing to have the tariff language stripped from the bill.
Midterm implications: Panelists expect a competitive fight for House control, with mixed generic-ballot polling. Even under a Democratic House majority, the panel was clear that the president would retain authority to raise or lower 301 tariffs unilaterally (assuming they're upheld in court) unless Congress can override a veto — a heavy lift given current margin. The panelists predicted a House majority would, however, bring stronger oversight and subpoena power.
The advocacy message, bipartisan and consistent: Panelists urged members to make the impact of tariffs personal and non-partisan with lawmakers on both sides — telling members of Congress plainly how tariffs affect your business, your employees and your community, and making clear that your vote reflects that impact. Dan Anthony highlighted Trade Partnership Worldwide's newly released report featuring survey data and testimonials from roughly 240 small businesses (including a number of NAMM members) on tariff impacts, along with voluntary regional, cross-industry lobby days planned for late September that NAMM members are welcome to join.

Closing Thought

As NAMM’s Claire Kreger-Boaz noted in closing, so much of this landscape remains genuinely unprecedented, and the legal authorities involved keep shifting — some more durable than others. NAMM continues to engage directly with USTR, testify at hearings and coordinate with partner organizations (including the Consumer Technology Association and the International Wood Products Association). The clearest and most consistent advice from the panel: Maintain a close working relationship with your customs broker and CBP contacts, keep telling your specific business story to lawmakers on both sides of the aisle, and stay engaged.

This recap reflects a discussion held for educational purposes only and does not constitute legal or business advice. Members with product-specific questions should consult their customs broker or trade counsel. Any decisions regarding sourcing, pricing, imports, contracting or business operations should be made independently by each company based on its own circumstances.

July 24 Tariff Webinar.pdf