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Saudi Arabia's Section 301 Tariff Is 12.5%. It Is Not a Finding That Saudi Goods Are Made With Forced Labour.

Washington imposed an additional 12.5% Section 301 duty on Saudi-origin goods from 24 July 2026. The legal trigger is the Kingdom's own missing forced-labour import prohibition, not any US finding about Saudi products. This is the exporter's side of the action.

12.5 per cent. That is Saudi Arabia’s Section 301 tariff rate — the additional duty the United States began collecting on Saudi-origin goods at 12:01 a.m. eastern time on 24 July 2026, under Section 301 of the Trade Act of 1974. It is charged under a US tariff heading created specifically for the Kingdom, 9903.05.67, and sits on top of whatever ordinary duty the product already carried [S1][S2].

What it is not is a finding that Saudi goods are made with forced labour.

That distinction is the substance of the measure, and most coverage has collapsed it. The Office of the US Trade Representative did not investigate Saudi factories, labour camps or supply chains. It investigated whether each of 60 economies has adopted and enforces a law of its own banning the import of goods made with forced labour — the kind of statute the United States has had since 1930. Saudi Arabia has no such law. Neither do 53 other economies. That legislative gap, and nothing about how Saudi aluminium or fertiliser is produced, put the Kingdom in the higher tier [S3][S4].

The practical consequence is smaller than the headline. Crude oil and petroleum products are exempt; Saudi aluminium and steel, already captured by Section 232, are excluded. The measure reaches perhaps 7 per cent of what the United States buys from Saudi Arabia. But it is the first time the Kingdom’s labour governance has carried an invoiced trade cost — four months before the International Labour Organization decides whether to open a Commission of Inquiry into the same subject.

Saudi Arabia’s Section 301 forced-labour tariff at a glance

Rate on Saudi goods12.5% additional ad valorem
In force12:01 a.m. ET, 24 July 2026
Legal basisSection 301, Trade Act of 1974 (19 U.S.C. 2411)
US tariff heading9903.05.67
TriggerSaudi Arabia has not adopted a forced-labour import prohibition
Not a finding thatSaudi goods are made with forced labour
Scope60 economies; 19 at 10%, 41 at 12.5%
Key exemptionsCrude oil and petroleum products; Section 232 metals

Final action was taken on 23 July 2026 by the US Trade Representative, Ambassador Jamieson Greer, at the President’s direction [S1][S2][S5].

What Washington actually did on 24 July 2026

USTR initiated the 60 investigations on 12 March 2026, published determinations finding actionable conduct in every one on 2 June, and proposed tariffs of 10 or 12.5 per cent in a Federal Register notice on 5 June. Hearings ran on 7, 8 and 9 July. President Trump signed the implementing memorandum on 23 July 2026 under Section 301 (19 U.S.C. 2411) and Section 307 (19 U.S.C. 2417); the Federal Register published both the presidential action and USTR’s notice on 28 July 2026 [S1][S2][S3][S6][S7].

US Customs and Border Protection issued operational guidance the same week. Saudi exporters’ US customers meet it at the entry summary:

  • Saudi-origin goods are reported under heading 9903.05.67, assessing “an additional ad valorem rate of duty of 12.5%” on articles the product of Saudi Arabia, except those in exemption headings 9903.05.85–9903.05.92. Chapter 99 codes are reported in a fixed sequence: Section 301 first, then Section 122, then Section 232, then Section 201 [S8].
  • An “on-the-water” grace covered goods in transit before 12:01 a.m. ET on 24 July and entered before 12:01 a.m. ET on 28 July 2026 — a window that has closed [S1][S8].
  • Covered goods entering a US foreign trade zone may be admitted only in privileged foreign status under 19 C.F.R. 146.41, removing the usual deferral [S8].

Why is Saudi Arabia subject to a 12.5% US tariff?

Because the Kingdom has never enacted a law prohibiting the import of goods made with forced labour, and Washington has decided that the absence of such a law is itself an actionable trade practice.

The United States has had one since 1930. Section 307 of the Tariff Act of 1930, codified at 19 U.S.C. § 1307, bars entry of goods “mined, produced, or manufactured wholly or in part in any foreign country by convict labor or/and forced labor or/and indentured labor.” A “consumptive demand” exception hollowed it out until its repeal in 2016 [S9]. USTR’s theory is that economies exporting into the US market with no equivalent control free-ride on that regime.

USTR never analysed Saudi Arabia individually

This part of the record has gone unreported, and it is decisive.

USTR’s determinations split the 60 economies in two. Six — Canada, Ecuador, the European Union, Indonesia, Mexico and Pakistan — have a prohibition on the books and were found not to enforce it effectively, and received named legal analysis. The other 54, Saudi Arabia among them, were disposed of collectively, in report sections titled, in full, “All Other Economies.” The entire analytical basis reads [S25]:

The information available suggests that no other economy subject to these investigations has adopted measures to forbid legally the importation of goods produced with forced labor. Accordingly, all other economies subject to these investigations have failed to impose a prohibition on the importation of goods produced with forced labor.

Saudi Arabia is named only in a footnote listing all 54 alphabetically. The enforcement limb is purely derivative: “In the absence of a forced labor import prohibition, there is no prohibition for each of these other economies to effectively enforce” [S25]. The operative determination in the final notice — item 46, Saudi Arabia — is identical boilerplate to the entries for Russia, Singapore and South Africa but for the country name [S7].

No Saudi statute is cited. No Saudi industry, port, company or sector is named. The Kingdom’s labour law and Saudisation framework regulates employment inside Saudi Arabia and contains no import-side control; nor does the GCC Common Customs Law. Anyone writing that the United States “found forced labour in Saudi supply chains” is describing a document that does not exist.

The two US instruments that do make findings about goods confirm the point. The Department of Labor’s List of Goods Produced by Child Labor or Forced Labor — 204 goods from 82 countries in its 2024 edition — contains no Saudi good, and none from any GCC state [S34]. Nor has US Customs and Border Protection ever issued a Withhold Release Order or Finding against Saudi Arabia; of the 58 WROs and 8 Findings on its register as at June 2026, none names a Gulf country [S35]. Where Washington concludes that specific goods are made with forced labour, it says so under 19 U.S.C. 1307 and detains them. It has never done so to a Saudi shipment.

Why the United Kingdom got 10% and Saudi Arabia did not

Reporting has gone wrong most often here: the United Kingdom is in the 10 per cent tier, not the 12.5 per cent tier. Several early summaries paired Saudi Arabia with “China and the UK” in the higher band. The presidential memorandum places the UK among the 17 named economies at 10 per cent [S2][S11].

The lower tier is not, as usually reported, “economies with an import ban.” USTR found that only six of the 60 actually impose one — the same six it then criticised for failing to enforce it. The 10 per cent rate has three prongs: imposing a prohibition; committing to one through an Agreement on Reciprocal Trade (ART); or maintaining “a partial regime with the effect of preventing the importation of certain forced labor goods.” The United Kingdom qualified under that third prong alone — the Modern Slavery Act 2015 is a corporate transparency duty, not a border measure [S25].

The criterion was then applied right up to the deadline. Between the June proposal and the July action, six economies — Cambodia, Guatemala, Honduras, India, Sri Lanka and Trinidad and Tobago — adopted forced-labour import prohibitions, and Jordan gave an ART commitment, moving all seven into the lower band [S2][S25]. Jordan’s ART was signed on 21 July 2026, two days before the action [S26]. Free-trade-agreement status decided nothing: Morocco, Bahrain and Oman all hold US FTAs and all pay 12.5 per cent. The lower tier was available to any government that moved in the six weeks before 23 July. Saudi Arabia did not move.

Nor was it singled out: Australia, New Zealand, Norway, Switzerland, Japan and South Korea are all in the 12.5 per cent band on the same reasoning.

Which economies are in the 12.5% tier and which are in the 10% tier?

Nineteen economies pay 10 per cent; forty-one pay 12.5 per cent. The split follows neither region, income nor alliance.

TierRateEconomies
Lower10%Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, United Kingdom (17 named), plus the European Union and Taiwan, charged the higher of 10% or the applicable MFN rate
Higher12.5%Algeria, Angola, Australia, Bahamas, Bahrain, Brazil, Chile, China, Colombia, Costa Rica, Dominican Republic, Egypt, Guyana, Hong Kong, Iraq, Israel, Kazakhstan, Kuwait, Libya, Morocco, New Zealand, Nicaragua, Nigeria, Norway, Oman, Peru, Philippines, Qatar, Russia, Saudi Arabia, Singapore, South Africa, Thailand, Türkiye, United Arab Emirates, Uruguay, Venezuela, Vietnam (38 named), plus Japan, Korea and Switzerland, charged the higher of 12.5% or the applicable MFN rate

Two things follow for the Gulf. All six GCC states are in the higher tier, so there is no disadvantage against regional peers and any response would be a shared Gulf interest — the GCC labour nationalisation benchmark sets out how closely the six track each other. And Saudi Arabia’s tier-mates are China, Russia and Vietnam: a reputational placement rather than an economic one, but it will be read as the former.

One figure conflict is worth resolving here. First-week counts of the lower tier ranged from 16 to 19 economies, all describing the same annex. Seventeen are named at a flat 10 per cent; the EU and Taiwan are charged the higher of 10 per cent or MFN, making 19 at the lower rate and 41 at the higher — 60 in total [S5][S10][S11][S12].

Does the tariff apply to all Saudi exports?

No — and this is where the headline number and the invoice diverge.

Two annexes carve out an enormous share of the trade. Annex II Part A alone covers 2,120 tariff codes across all 60 economies, of which 863 are exempt as entered, 541 only for civil-aircraft use and 700 only for pharmaceutical use. USTR added 471 products beyond its June proposal [S5][S13].

The exempt families include “crude oil and petroleum products; natural gas and liquified natural gas; coal and coke products; petrochemical feedstocks,” alongside copper, lithium, cobalt, nickel and rare earths, pharmaceuticals, semiconductors, aerospace products and “industrial chemicals, resins, plastics feedstocks, and specialty manufacturing inputs” [S13][S14]. At code level, Part A exempts crude petroleum under HTSUS 2709.00.10 and 2709.00.20, refined products across 2710 and natural gas across 2711 [S25]. Separately, all articles subject to Section 232 tariffs are excluded from this action entirely [S4][S10].

The crude-oil exemption removes four-fifths of the exposure

US imports from Saudi Arabia totalled $10.94bn in 2025 on UN Comtrade data, of which mineral fuels and oils were $8.88bn — roughly 81 per cent [S15]. USTR’s country page puts 2025 goods imports at $10.5bn, down 18.4 per cent on 2024, against $14.1bn of US goods exports and a $3.6bn US goods surplus [S16].

Category (HS chapter)US imports, 2025Section 301 forced-labour treatmentOther US duty
Mineral fuels and oils (27)$8.88bnExempt — 2709.00.10/.20, 2710, 2711 named in Annex II Part AMFN, largely free
Organic chemicals (29)$520.0mSubstantially exempt on the published descriptionMFN ~3%
Fertilisers (31)$458.6mPartly exempt; fertiliser inputs added in JulyMFN broadly free
Commodities not specified$278.0mNot classifiable from published data
Aluminium (76)$254.6mExcluded — Section 232 appliesSection 232, up to 50%
Plastics (39)$73.5mCovered at 12.5% unless listedMFN ~4%
Salt, sulphur, stone, cement (25)$53.9mCovered at 12.5% unless listedMFN low
Base metals and cermets (81)$51.5mPartly excluded where Section 232 appliesVaries
Man-made filaments (54)$42.1mCovered at 12.5%MFN mid-single digits
Articles of iron or steel (73)$41.8mExcluded — Section 232 appliesSection 232
Machinery (84)$35.7mCovered at 12.5% unless listedMFN low
Iron and steel (72)$24.1mExcluded — Section 232 appliesSection 232
Total$10.94bn

Source: UN Comtrade category values for 2025; treatment column derived from USTR’s published exemptions and the Section 232 carve-out. Categorisation is vision2030.ai’s, not USTR’s.

Strip out energy ($8.88bn) and the Section 232 metals ($320.6m across HS 72, 73 and 76), and roughly $1.74bn remains inside the perimeter. Strip out organic chemicals and fertilisers ($978.6m), which sit in the exempt families, and the residual exposed base is on the order of $760m — about 7 per cent of what the United States buys from Saudi Arabia. At 12.5 per cent that is roughly $95m a year, borne in the first instance by US importers. Treat it as an order-of-magnitude estimate built from HS-chapter aggregates.

Aluminium is excluded — because Section 232 already takes 50 per cent

The most repeated claim about Saudi exposure is the most misleading. Aluminium is routinely cited as the Kingdom’s most tariff-exposed export at $2.43bn. That figure is real, but it is Saudi Arabia’s total global aluminium exports in 2024 — not exports to the United States, which took $254.6m in 2025, roughly a tenth. Japan is the largest destination at about 28 per cent of value [S17].

Saudi aluminium is also exempt from the forced-labour duty, because Section 232 metals goods are carved out. It faces Section 232 instead, restructured on 6 April 2026 from a single 50 per cent rate on metal content into a four-annex structure with 50, 25 and 15 per cent bands assessed on full product value: a change worth far more to Ma’aden than 2.5 percentage points ever could be [S18]. See the Saudi aluminium industry and Ma’aden, whose Ras Al Khair complex is the export point, the phosphate and fertiliser industry, and the chemicals chain through SABIC and the Jubail cluster, fed by Aramco downstream refining.

Is the tariff on top of existing duties?

Yes — and the more useful question is what it replaced.

The 12.5 per cent is additional to the ordinary most-favoured-nation duty, which for the goods Saudi Arabia actually ships is modest: fertilisers broadly free, chemicals around 3 per cent, plastics around 4 per cent. It does not stack with Section 232, whose goods are exempt from this action. It does stack with pre-existing Section 301 duties, which is why Brazilian goods can reach 37.5 per cent — but no legacy Section 301 programme applies to Saudi Arabia [S11][S12].

The sequencing is what almost no coverage has carried. On 20 February 2026 the Supreme Court held 6–3 in Learning Resources, Inc. v. Trump, in an opinion by Chief Justice John Roberts, that the International Emergency Economic Powers Act does not authorise the President to impose tariffs, invalidating the “reciprocal” programme. The same day the administration invoked Section 122 of the Trade Act of 1974, which permits a temporary import surcharge of up to 15 per cent for a maximum of 150 days. The Federal Register notice set the rate at 10 per cent, effective 24 February 2026. In May 2026 the Court of International Trade struck it down but limited relief to the three importer plaintiffs; that ruling is on appeal [S19][S20][S21].

Section 122’s 150-day clock ran out on 24 July 2026. The Section 301 duties took effect the same minute [S23].

So the change for Saudi-origin goods on 24 July was 10 per cent to 12.5 per cent — a step of 2.5 percentage points, not 12.5. That is materially different from “Washington hits Saudi Arabia with a 12.5% tariff,” and it is the most useful correction available to anyone pricing the impact. Two caveats: the measures carry different exemption lists, so the base is not identical, and the surcharge is under appeal, so the 10 per cent baseline may itself prove to have been unlawful.

How can Saudi exporters and Riyadh respond?

There are three routes, on different timescales.

Reclassify and re-document. The immediate work is classification, not diplomacy. Exemptions are drawn at eight-digit HTSUS level and several hinge on end use, so two shipments of similar-looking product can land on opposite sides of the line. Chapter 98 relief survives, except that goods entered under subheadings 9802.00.40, .50, .60 and .80 pay the duty on the value of foreign repairs, processing or value added [S8]. The import-export and customs guide covers the Saudi-side procedures.

Change the tier — but not through a process. The rate is not permanent: seven economies moved down in six weeks. But USTR expressly refused to create a route back. Asked in comments to establish an exclusion process or periodic review, it replied that lowering tariffs on additional products “would be inconsistent with the President’s direction,” pointing to 19 U.S.C. 2417 as the only mechanism. No review period is stated [S25].

That leaves legislation as the realistic lever. Saudi Arabia has neither a US free-trade agreement nor an ART, and no Gulf state appears on USTR’s ART roster; the Kingdom’s free-trade-agreement position rests on the GCC customs union and WTO membership. An import prohibition would be a border measure, distinct from the domestic employment rules the Ministry of Human Resources and Social Development oversees. The distinction is live: in 2025 the ministry launched a National Policy on forced labour, the first in any Arab state. It contains no import prohibition — precisely why it did not qualify the Kingdom for the lower tier [S27].

Wait for the courts. Two suits were filed at the US Court of International Trade on 24 July 2026: Burlap & Barrel v. Greer, a proposed importer class action backed by the Liberty Justice Center, and a second by Learning Resources, the toy company that defeated the IEEPA tariffs in February. Their central argument is that USTR failed to make the individualised, country-specific findings Section 301 requires — a claim the Saudi entry documents almost perfectly, consisting as it does of boilerplate attached to a residual paragraph naming no Saudi law [S28]. No decision as of 28 July 2026.

How has Riyadh responded to the tariff?

It has not — and neither has any other Gulf capital.

As of 28 July 2026 we could locate no statement on the action from the Ministry of Commerce, the Ministry of Investment, the Ministry of Human Resources and Social Development, the General Authority of Foreign Trade or the Saudi Embassy in Washington. No Gulf state appears among the roughly 31 governments that filed comments during the investigations — a list including Australia, Brazil, Canada, the EU, India, Japan, Singapore, the UK and Vietnam — nor in the international reaction round-ups published after 24 July [S29]. Absence from a participant list is not proof of non-participation, but the silence is consistent across every source we checked.

The closest adjacent event is a near-miss. The Saudi–US Trade and Investment Framework Agreement Council, the 2003 TIFA machinery that is the standing bilateral channel, met in Riyadh on 21 July 2026, two days before the announcement. The readout records Abdulaziz Alsakran, Deputy Governor of the General Authority of Foreign Trade, and Bryant Trick, Assistant US Trade Representative for Europe and the Middle East, reviewing 31 initiatives. It makes no mention of tariffs, Section 301 or forced labour [S30].

Gulf coverage was thin and list-driven. Gulf News told readers that “countries that improve compliance could eventually qualify for lower tariff rates” — unsourced, and contradicted by USTR’s refusal to establish a review process [S31]. The Saudi daily Okaz explained the two-tier structure accurately without telling Arabic readers that Saudi Arabia is in the higher tier [S32].

Why this matters for Vision 2030

The trade cost is small. The precedent is not.

Saudi Arabia’s non-oil exports reached SAR366.08bn ($97.04bn) in 2025, up 18.9 per cent, and the oil share of total exports fell from 73.1 to 68.7 per cent [S22]. The United States took about 4.2 per cent of Saudi exports in 2024; China led at 14.6 per cent of merchandise exports in 2025. A $95m duty estimate against a $97bn non-oil export book does not move the non-oil exports KPI or threaten export diversification.

What changed on 24 July is the category of risk. The Kingdom’s labour-governance exposure had been reputational. It is now a line on a customs entry with a tariff heading number — and modellable costs get priced into offtake contracts and project finance in a way reputational risk does not.

The uncomfortable part is the label. The tariff concerns an absent customs statute, not treaty standards — which Saudi Arabia has ratified: ILO Convention 29 on forced labour in 1978, Convention 95 on wages in December 2020, the 2014 Protocol to Convention 29 in May 2021 [S36]. But it is called a forced-labour tariff, and the label travels further than the reasoning. Saudi Arabia is simultaneously the subject of an ILO Article 26 complaint lodged on 4 June 2025 by workers’ delegates from 36 countries: filed against five conventions, ruled receivable on three — 29, 95 and 111 — with 143 and 155 excluded as unratified. Riyadh asked in January 2026 for dismissal; the Governing Body instead deferred by consensus, Workers, Employers and Saudi Arabia all supporting, to the 358th session in November 2026 [S24]. The merits have never been considered. That session may establish a Commission of Inquiry, the ILO’s gravest mechanism: 14 have been created since 1919.

The domestic framing requires care. The 2021 Labour Reform Initiative loosened employer control over job transfer, exit and re-entry for many private-sector workers — while excluding domestic workers, drivers, farm workers and shepherds — and officials have described the sponsorship system as ended. That is contested. On 29 April 2026 three UN special rapporteurs, led by Tomoya Obokata, Special Rapporteur on contemporary forms of slavery, urged the Kingdom to end kafala: “Despite the Labour Reform Initiative initiated in 2021, many aspects of this sponsorship system continue to be applied” [S37]. The ITUC’s 2026 Global Rights Index still rates Saudi Arabia 5 — “no guarantee of rights,” its worst band [S33]. Writing that Saudi Arabia “abolished kafala” without that contest is not reporting. See the kafala sponsorship system, human rights reform, foreign workers in Saudi Arabia and FIFA 2034 and forced labour; for the diplomatic frame, US–Saudi relations, and for trade, Saudi Arabia’s trade partners and bilateral trade agreements.

Risks, contradictions and open questions

We could not read the annexes line by line. They run to hundreds of pages of eight-digit codes. Our category treatments derive from USTR’s published descriptions and law-firm summaries, except the energy exemptions, verified at code level. The $760m residual exposure and $95m duty estimate are indicative. Global Trade Alert’s compilation also refers to a further modification dated 31 July 2026 that we could not verify.

Two import totals, one trade flow. UN Comtrade puts 2025 US imports from Saudi Arabia at $10.94bn; USTR’s country page says $10.5bn — a Comtrade-versus-Census difference. We use Comtrade for the category split and USTR for headline bilateral figures. Neither Ma’aden nor SABIC had disclosed a line-item impact, and we decline to model one, because product-level destination splits are not public.

The Section 122 baseline may not survive. The 2.5-point framing depends on the 10 per cent surcharge having been lawfully collected between 24 February and 24 July 2026. The Court of International Trade held in May 2026 that it was not; the appeal is unresolved. If the surcharge is voided wholesale, the counterfactual becomes 0 per cent and the 24 July step was the full 12.5 points.

The ITUC contradicts itself on kafala. The same 2026 Global Rights Index that rates Saudi Arabia in its worst band states in its regional chapter that the Kingdom “abolished its kafala system in 2025” — conflicting with its own rating, with the UN rapporteurs, with HRW and Amnesty, and with the US State Department. We cite the rating, not the sentence. Separately, the OHCHR page resisted automated retrieval; the rapporteurs’ statement is quoted from a syndicated republication and corroborated against HRW and FairSquare.

Washington’s own record cuts both ways. The State Department’s 2025 Trafficking in Persons report placed Saudi Arabia at Tier 2 — as every year since 2021 — while naming Vision 2030 projects and 2034 World Cup preparation as settings where migrant workers “are exploited in labor trafficking” [S38]. That is a US government finding about conditions. It is not the finding this tariff rests on, and it has produced no DOL listing and no CBP order.

The label problem is unresolved. Nothing here constitutes a US determination about labour conditions in Saudi Arabia. But a tariff called a forced-labour tariff will be cited as though it were one — a reputational cost created by an instrument that does not, on its face, support it.

What to watch next

  • Burlap & Barrel v. Greer and Learning Resources, US Court of International Trade, both filed 24 July 2026. A ruling that USTR failed to make individualised country findings would void the Saudi determination along with 59 others.
  • November 2026 — ILO Governing Body, 358th session. Substantive consideration of the Article 26 complaint, including whether to establish a Commission of Inquiry. The most consequential scheduled event on this file.
  • The Federal Circuit ruling on the Section 122 appeal, which determines whether the 24 July step was 2.5 points or 12.5.
  • Any Saudi legislative move toward an import prohibition — the only mechanism that plainly satisfies USTR’s criterion for the 10 per cent rate. None announced as of 28 July 2026.
  • The next Saudi–US TIFA Council meeting, for whether Section 301 enters the bilateral agenda after the 21 July session passed it over.
  • Q3 2026 GASTAT trade data, for whether the US share of Saudi merchandise exports moves. Given the exemption structure, we expect not.

Last verified: 31 July 2026.

Sources