A practical walkthrough of the new 10% Section 301 duty, what it adds to landed cost, and what US importers should ask suppliers before the next order.
Table of Contents
The Short Answer: What Changed and Who Pays
Since July 24, 2026, most products of Pakistan entering the US carry an extra 10% duty under Section 301. It sits on top of the normal duty rate, not in place of it, and the US importer of record pays it to CBP.
That's the headline. The detail underneath it decides your real cost per unit.
The duty comes from a USTR action against economies it found had failed to ban and enforce prohibitions on goods made with forced labor. Pakistan is one of them. CBP implemented it under HTSUS heading 9903.05.62, and CBP's guidance to the trade (CSMS #69326983) confirms it applies to Pakistani goods entered, or withdrawn from warehouse, for consumption from 12:01 a.m. Eastern on July 24, 2026. Qualifying cargo that was already loaded and in transit before then falls under a transition exception. The action was also published in the Federal Register.
Who actually pays? The importer of record is legally responsible to CBP for duties, even when a broker files the entry. Your contract and Incoterm can shift the economic cost onto the seller, but they don't move the customs obligation. If you buy Pakistani leather goods FOB and import them yourself, the new duty is yours.
For buyers already sourcing from Pakistan, the tariff on leather goods from Pakistan will change your numbers. The useful questions are by how much, SKU by SKU, and whether Pakistan still wins once you compare total landed cost on equal terms.
What the Duty Applies To
The Section 301 layer is set by country of origin, not by product type. Anything classified as a product of Pakistan is in scope unless it falls under one of CBP's listed exemptions. Those cover goods subject to Section 232 tariffs, certain raw materials, civil aircraft and parts, pharmaceutical-use articles, certain donations, informational materials and a few other narrow categories. We found no general exemption for leather jackets, handbags, wallets or belts.
That's why "10% on leather" is the wrong way to think about it. Your actual duty depends on the exact 10-digit classification of each product in the official US Harmonized Tariff Schedule, plus the Section 301 layer.
How the duty stacks on normal HTS rates
Here are the ordinary (Column 1 General) rates for common leather lines, with the Section 301 duty added. Treat them as starting points to confirm with your broker, not final classifications:
- Leather jackets and apparel (4203.10.40): 6% + 10% = 16%
- Leather handbags valued over $20 each (4202.21.90): 9% + 10% = 19%
- Leather handbags valued $20 or less (4202.21.60): 10% + 10% = 20%
- Leather wallets and pocket goods (4202.31.60): 8% + 10% = 18%
- Leather belts (4203.30.00): 2.7% + 10% = 12.7%
Classification turns on construction, outer material, unit value and intended use. A handbag that crosses the $20 line moves to a different rate. Change a jacket's outer material and it may leave 4203 altogether. Never price an order from a four- or six-digit heading.
A Worked Landed-Cost Example
Numbers make this concrete. The figures below are illustrative only, not Pelnoir pricing, and they leave out freight, insurance, brokerage, inland delivery and storage.
Say you import 100 leather jackets by ocean freight, with a total customs value of $10,000 ($100 per jacket), classified under 4203.10.40:
- Ordinary duty at 6%: $600.00
- Section 301 duty at 10%: $1,000.00
- Merchandise Processing Fee at 0.3464%: $34.64
- Harbor Maintenance Fee at 0.125%, ocean only: $12.50
- Customs-related charges: $1,647.14, or about $16.47 per jacket
Before July 24, the same entry would have carried $647.14 in those charges. The new duty adds $10 for every $100 of customs value, assuming classification and valuation stay the same.
Two details catch people out. MPF is calculated on the value of the goods, excluding duty, freight and insurance, and for FY2026 formal entries it's bounded by a $33.58 minimum and a $651.50 maximum. HMF isn't charged on air cargo, so an air shipment of the same jackets would drop that line.
To see where duty sits alongside materials, labor and margin, our leather pricing strategy guide walks through the rest of the cost stack.
Your Options Before the Next Order
None of the options below makes the 10% disappear for goods that remain products of Pakistan. What they do is stop it from surprising you and trim the costs around it.
Recalculate by SKU, not by headline
Build a worksheet with one row per SKU: the 10-digit HTSUS code, customs value, ordinary duty, the 9903.05.62 duty, MPF, HMF if it ships by sea, then freight, insurance, brokerage and inland delivery. Divide by quantity. A single blended "Pakistan plus 10%" figure hides which products still carry healthy margins and which don't.
Review specifications with your broker
Changes to outer material, lining, hardware, construction or unit value can change a product's classification. That's a legitimate conversation to have with a licensed customs broker. Redesigning a product purely to chase a lower rate, without their sign-off, isn't. Misclassification creates duty liability and penalties, and CBP expects importers to exercise reasonable care on every entry.
Consolidate or re-time shipments
Larger, less frequent shipments spread fixed costs like brokerage and documentation across more units. They don't touch the 10% itself, which is a percentage of value, and they tie up cash and warehouse space for longer. Keep in mind that the duty is triggered by the US entry date, not the date you signed the purchase order.
Compare origins on total landed cost
Pakistan may still come out ahead. Test it properly: same HTS code, same value basis, same specification, same freight mode, same quantity and the same standard of compliance paperwork. Shipping through a third country doesn't change origin on its own; CBP's origin rules look at where goods were made or last substantially transformed. Our guide for US leather importers covers the rest of the import process.
Forced-Labor Due Diligence: Documents to Request
This tariff exists because of forced labor enforcement, so expect more scrutiny of supply chains, not less. CBP's forced labor guidance says importers must exercise reasonable care and understand where and how their products are made. CBP can detain shipments covered by a Withhold Release Order, and can seize goods covered by a formal finding unless the importer proves they're admissible.
Leather deserves particular attention. The US Department of Labor's Pakistan report lists leather tanning among sectors where child labor is reported. That doesn't mean every Pakistani leather producer is implicated. It does mean you should be able to show where your leather came from.
Ask suppliers for:
- Factory identity: legal entity name, production addresses, licenses and any approved subcontractors
- Production map: where tanning, cutting, stitching, finishing and packing happen, including anything outsourced
- Material traceability: tannery details, leather purchase records and batch references where available, plus the origin of lining, hardware and packaging
- Workforce controls: minimum-age policy, age-verification procedure, payroll and timekeeping records
- Forced-labor controls: recruitment-fee policy, rules on holding worker ID documents, grievance and remediation procedures
- Independent verification: the latest social-compliance audit, with its scope, date and corrective-action status
- Shipment file: invoice, packing list, bill of lading, factory declaration and production dates that tie the shipment to the reviewed factory
No single certificate guarantees entry. What holds up is a file that links each shipment to its factory and its materials.
Questions to Ask Your Pakistani Supplier
Send these before you approve the next purchase order. How quickly and completely a supplier answers tells you a lot.
- Which 10-digit HTSUS code do you expect for each SKU, and what product description supports it?
- Will the invoice show Pakistan as the country of origin, so the 9903.05.62 line can be declared correctly?
- Where was the leather tanned, and where was each item cut, sewn and finished?
- Is any stage subcontracted, and are subcontractors barred without written approval?
- Which Incoterm is the quote on, and who acts as importer of record?
- If the price is "duty included," can you provide a transparent landed-cost breakdown?
- Does the contract include a clause for future tariff changes?
- When was your last independent audit, and what corrective actions followed?
For a wider checklist on vetting manufacturers, see our B2B guide to sourcing leather goods from Pakistan.
Common Mistakes Importers Are Making
- Quoting customers a flat "plus 10%" without checking each product's ordinary rate
- Assuming a purchase order signed before July 24 is protected, when the entry date is what counts
- Treating a DDP quote as proof the duty is covered without seeing the breakdown
- Routing goods through another country and assuming the origin changes
- Accepting one audit certificate as the entire compliance file
Conclusion
The 10% Section 301 duty is real, it stacks on the normal rate, and it lands on the importer of record. For many leather products Pakistan can still make commercial sense once you recalculate landed cost SKU by SKU and tighten your supply chain documentation. If you're weighing your next order, share your product list, quantities and current quote with Pelnoir's team and we'll talk it through with you.
Frequently Asked Questions
Who pays the new US tariff on leather goods from Pakistan?
The US importer of record pays the duty to CBP. A contract can shift the cost to the seller, but the customs obligation stays with the importer.
Is the Section 301 tariff on Pakistani goods 10% in total?
No, it is an additional 10% on top of the product's normal HTS duty rate. A leather jacket classified under 4203.10.40, for example, carries 6% plus 10%.
When did the Section 301 duty on Pakistan take effect?
It applies to goods entered for consumption from 12:01 a.m. Eastern time on July 24, 2026. A transition exception covers qualifying cargo that was already in transit.
Can shipping through another country avoid the duty?
Not automatically. US origin is based on where goods were made or last substantially transformed, not where they were shipped from.
Does a supplier's audit certificate guarantee customs clearance?
No, an audit alone does not guarantee admissibility. Keep shipment-specific records that link your goods to their factory and material sources.