In December 2025, the Ministry of Communications and Information Technology issued the Executive Regulations (the “Executive Regulations”) of the Egyptian Personal Data Protection Law No. 151 of 2020 (the “Law”),…
In brief
With effect from 12:01 a.m. Eastern Time on 24 July 2026, an additional ad valorem duty of 12.5% applies to most goods of Egyptian origin entering the United States. The measure was imposed by the Office of the United States Trade Representative (USTR) under Section 301 of the Trade Act of 1974, following investigations into the failure of sixty trading partners to impose and effectively enforce a prohibition on the importation of goods produced with forced labour. Egypt was placed in the higher of the two tariff tiers.
The new duty replaces the temporary 10% surcharge previously applied under Section 122, which lapsed on the same date. The practical effect for Egyptian exporters is therefore an increase of 2.5 percentage points, but the legal basis, the scope of exemptions and the route to relief are all materially different, and these differences matter.
Background to the measure
USTR opened the underlying investigations on 12 March 2026 in respect of the sixty largest United States trading partners. Findings were published on 2 June 2026, a public comment period closed on 6 July and hearings were held on 7 July. The final action followed on 23 July and took effect the next day.
The action assesses whether a trading partner has adopted and enforces a legal prohibition on the entry of forced labour goods into its own market. Fifty-four economies, Egypt among them, were found to have neither imposed nor effectively enforced such a prohibition and were made subject to the 12.5% rate. Economies that maintain a prohibition without enforcing it effectively, or that have undertaken commitments through an Agreement on Reciprocal Trade, were assigned the lower 10% rate.
It should be emphasised that the duty attaches to the country, not to the consignment. It applies irrespective of whether any particular Egyptian exporter, factory or shipment has been found to have used forced labour. No individual finding against an Egyptian producer is required, and none has been made.
Scope and carve-outs
The duty applies to goods entered for consumption, or withdrawn from warehouse for consumption, on or after the effective date. The date of physical arrival in the United States is not determinative.
Significant categories fall outside the measure. These include goods already subject to separate national security tariffs under Section 232, such as automobiles, steel, aluminium and copper, together with oil and gas, fertilisers, certain food products, aircraft and parts, critical minerals, informational materials and accompanied baggage. USTR added several hundred further subheadings to the exemption annex in the final action, so the position on any given line may have changed between the June proposal and the measure now in force.
A limited transitional relief is available for goods loaded and in transit on the final mode of transport before 24 July, provided they are entered for consumption before 12:01 a.m. Eastern Time on 28 July 2026. Exporters with cargo afloat should confirm entry timing with their United States customs brokers as a matter of urgency.
Textile and apparel tariff rate quotas tied to purchases of United States cotton and textile inputs were directed for Bangladesh, Cambodia, Indonesia and Malaysia. Egypt was not included. Egyptian apparel shipped under the Qualifying Industrial Zones protocol also warrants close attention, since the exemptions granted to goods qualifying under the USMCA and CAFTA-DR have no published equivalent for QIZ traffic. Duty-free treatment under a preference programme does not by itself displace a Section 301 overlay, and each tariff line should be checked against the annex rather than assumed to be covered.
What Egyptian exporters and their counterparties should do now
Exposure should be mapped by tariff classification, not by product description or by general sector assumptions. The difference between an exempt and a dutiable subheading is often narrow.
Existing supply contracts deserve immediate review. The allocation of duties between seller and buyer turns on the Incoterms rule selected, on any tariff pass-through or price adjustment clause, and on whether change in law provisions are drafted widely enough to capture a measure of this kind. Force majeure will rarely assist, since a tariff increase generally renders performance more expensive rather than impossible. Where contracts are silent, the loss will usually fall where the delivery term places it, and parties would be well advised to address the point by written variation rather than by correspondence after the event.
Landed cost models should be rebuilt to account for the new layer stacking on top of MFN rates, and on top of any anti-dumping or countervailing duties already in place.
The path to the lower rate
The framework expressly contemplates movement between tiers. A trading partner that adopts a forced labour import prohibition, or that commits to impose and enforce one through an Agreement on Reciprocal Trade, may qualify for the 10% rate. Egypt has no such prohibition in its current legislative framework. Any reduction would therefore require either a legislative step domestically or a bilateral commitment to Washington, and businesses with significant United States exposure may wish to make their position known through the relevant industry chambers and export councils.
How we can assist
Eldib & Co advises exporters, importers and their international counsel on trade measures affecting Egyptian goods, on the drafting and renegotiation of supply contracts to allocate tariff risk, and on the labour compliance and supply chain diligence documentation that increasingly determines market access. Our corporate, commercial and maritime teams work together on these matters across our Cairo, Alexandria, Tripoli, Istanbul and Shanghai offices.
For further information, please contact:
Mohamed Eldib Partner, Eldib & Co Citadel Plaza, Building 1, Mokattam, Cairo
