Update, September 27, 2026: Much of the tariff picture below has changed. CBP stopped collecting IEEPA tariffs, including the 20% reciprocal rate on Vietnam and 19% on Cambodia, on February 24, 2026; the 18% rate for India announced in February was never put into effect by a published order; and the 10% Section 122 surcharge expired on July 24, 2026. Since that date most goods from these countries pay their normal duty plus a Section 301 forced-labor duty of 10% (India, Cambodia) or 12.5% (Vietnam): see our India, Vietnam and Cambodia tariff guides.
What Exporters and Importers Need to Know Now
In February 2026, India and the United States announced a framework for a tariff deal. For US importers, the issue is no longer just sourcing cost — it is whether shipments can physically arrive before the tariff environment changes. In May 2026, for both buyers and exporters, the rate goods would enter at depended on decisions made in the following weeks.
Three sourcing markets. Three different tariff realities.
When this post was published in May 2026, it treated the announced 18% rate for India as a tariff advantage over Vietnam and Cambodia. As the next section explains, that rate never took effect. For importers comparing landed cost at scale, even a 1–2% differential compounds quickly across high-volume shipments.
What the India deal actually changed — and what it didn't
On February 6, 2026, the United States and India published a joint statement on a framework for an Interim Agreement. In it, the United States said it would apply an 18% reciprocal rate to most Indian goods and, once the Interim Agreement was concluded, remove that rate on goods including generic pharmaceuticals, gems and diamonds, and aircraft parts. A White House fact sheet of February 9 described the change as a cut in the reciprocal tariff from 25% to 18%. The separate 25% duty tied to India's purchases of Russian oil did end, from February 7, 2026.
The 18% rate itself was never put into effect. CBP's February 9, 2026 guidance kept the 25% reciprocal duty in place for Indian goods, and no executive order setting 18% was published before the Supreme Court held on February 20, 2026 that IEEPA does not authorize tariffs. CBP stopped collecting all IEEPA duties on February 24, 2026. From then until July 24, 2026, goods from India, Vietnam and Cambodia all paid the same 10% Section 122 surcharge, so India had no tariff advantage over the other two in that period. As of September 23, 2026, we found no signed Interim Agreement text.
Vietnam and Cambodia had no equivalent announcement. Vietnam's October 2025 framework kept its IEEPA reciprocal rate at 20%, and Cambodia's rate stayed at 19% after it signed an Agreement on Reciprocal Trade on October 26, 2025. Both rates ended with the other IEEPA duties on February 24, 2026.
Since July 24, 2026, the difference between the three comes from a Section 301 forced-labor duty added to the normal duty for each HTS line: 10% on products of India and Cambodia, and 12.5% on products of Vietnam. On goods that pay it, India now has a 2.5-point edge over Vietnam and none over Cambodia. Exemptions differ by country, so compare your own HTS lines.
The Section 301 investigation — and why July matters
On March 11, 2026, according to the Office of the United States Trade Representative, USTR initiated Section 301 investigations into structural excess manufacturing capacity across sixteen economies, including India, Vietnam, and Cambodia. The public comment period closed April 15, followed by hearings on April 28.
According to current trade-law timelines and industry analysis, these investigations may form the basis for a revised tariff structure later in 2026, following the February Supreme Court decision affecting the IEEPA tariff framework. At the time of writing, no implementation date had been confirmed, and many trade compliance advisors and customs professionals were planning around the possibility of revised tariff treatment beginning in late July 2026.
Why freight timing now matters as much as tariff policy
The tariff story is only half the issue. The second half is transit time. In May 2026, commercial traffic through the Strait of Hormuz was heavily disrupted, with vessel tracking data from Lloyd's List and Kpler indicating traffic volumes far below historical norms. For cargo moving from India, Vietnam, and Cambodia into the United States, the operational consequences were immediate: Cape of Good Hope rerouting had become standard on several affected trade lanes, transit durations were extending materially, and carriers were slow steaming at 14.5–15 knots to manage fuel costs and network reliability.
Under the routings in place at the time, shipments from South and Southeast Asia to the US East Coast were frequently taking 42–45 days or more — compressing the shipment window before the late-July tariff change. Hormuz traffic was still far below normal in September 2026, according to Lloyd's List Intelligence, but routings on the India–US East Coast trade have begun to change: from September 23, 2026, MSC moved the westbound leg of its Indusa service back to the Suez Canal (see our Sealanes note). Check current transit times on your own booking.
When this post was published in May 2026, a two-week delay in booking could determine whether cargo entered under the Section 122 surcharge or under the Section 301 duty that took effect on July 24, 2026.
What Airlift USA was seeing in May 2026
Ground-level intelligence — India, Vietnam and Cambodia client
The competitive shift — and what exporters should do next
The tariff differential between India and Vietnam — 10% against 12.5% under Section 301 since July 24, 2026, with Cambodia at the same 10% as India — can still affect sourcing economics across textiles, industrial goods, automotive components, chemicals, and consumer manufacturing categories. This does not mean Vietnam and Cambodia suddenly become uncompetitive. Lead times, supplier relationships, manufacturing specialization, and product quality still matter enormously.
But exporters in Vietnam and Cambodia who are not actively quantifying the landed-cost difference for US buyers risk losing competitiveness gradually — without a single obvious trigger point. The most valuable conversation to have with US buyers right now is a landed-cost comparison that incorporates tariff exposure, Cape rerouting costs, and potential Section 301 risk. That analysis is increasingly becoming a sourcing requirement rather than just a procurement exercise.
What we advised each origin to do in May 2026
This was our advice at the time. The 18% India rate it refers to never took effect, and July 24, 2026 turned out to be the day the Section 122 surcharge expired and the Section 301 forced-labor duty began.
India — protect the advantage
Verify that your specific HTS classifications qualify for the reduced 18% tariff treatment — the deal does not apply uniformly across all product categories and the full schedule has not been published. Prepare stronger rules-of-origin documentation before entry filing, as CBP is expected to scrutinize Indian-origin claims closely given the commercial value of the rate. Where Section 301 exposure is material for your product category, accelerate Q3 departures to protect the July arrival window.
Vietnam — manage the differential
Model the landed-cost gap against Indian competitors on a category-by-category basis — in some categories the 2% differential is immaterial; in others it is decisive. Front-load tariff-sensitive shipments before late July and treat Cape rerouting timelines as a hard constraint on departure dates, not a variable. Monitor USTR Section 301 developments closely through Q3, as the investigation outcome will define your rate environment for the rest of 2026.
Cambodia — maximize the exemptions
Review your product categories carefully against the October 2025 exemptions structure — not all goods qualify, and misclassification at this rate level carries meaningful liability. Ensure forced-labor compliance documentation is current, as Cambodia faces a separate Section 301 investigation on this basis and CBP scrutiny will remain elevated. Build Cape rerouting transit durations into all departure planning — the July 24 window is approximately 10–14 days tighter than pre-war voyage estimates suggest.
The three compliance requirements every shipment now needs
Regardless of origin, every shipment moving into the United States from these markets should have three things confirmed before departure.
HTS classification accuracy. The tariff rate applied at the border depends on the classification submitted on the entry, so review classifications before the shipment moves, not after arrival.
Rules-of-origin verification. Make sure supplier origin documentation is complete, internally consistent and defensible at entry before freight moves.
Realistic transit assumptions. Plan departure dates on current routings and transit times, not on historical voyage durations.
Frequently asked questions
What is the current US tariff rate on Indian exports in 2026?
As of September 2026, most Indian goods pay the normal duty for their HTS line plus a 10% Section 301 duty in force since July 24, 2026; Section 232 goods such as steel pay their own rates instead. The 18% reciprocal rate in the February 6, 2026 joint statement was never put into effect by a published order. The 25% Russian-oil duty ended on February 7, 2026, CBP stopped collecting all IEEPA duties on February 24, 2026, and the 10% Section 122 surcharge expired on July 24, 2026. See our India tariff guide.
What tariff rate does Vietnam face for US-bound exports in 2026?
As of September 2026, most Vietnamese goods pay the normal duty for their HTS line plus a 12.5% Section 301 duty in force since July 24, 2026. The 20% IEEPA reciprocal tariff ended on February 24, 2026, and the 10% Section 122 surcharge expired on July 24, 2026. USTR opened a Section 301 investigation of structural excess capacity in Vietnam on March 11, 2026; we found no action notice in it as of September 25, 2026. See our Vietnam tariff guide.
What happened on July 24, 2026?
The 10% Section 122 surcharge expired by statute on July 24, 2026. In the same hour, a separate Section 301 duty tied to forced-labor import prohibitions took effect: 10% on products of India and Cambodia and 12.5% on products of Vietnam. That duty came from a different Section 301 action than the March 11 excess-capacity investigations described above, in which we found no action notice as of September 25, 2026.
How does the Strait of Hormuz disruption affect shipments from India, Vietnam, and Cambodia?
In May 2026, according to vessel tracking data from Lloyd's List and Kpler, commercial traffic through the Strait of Hormuz was running at a small fraction of pre-war levels. Cargo that previously transited the Gulf was rerouting via the Cape of Good Hope, adding 10–14 days per voyage. Combined with carrier slow steaming at 14.5–15 knots — a practice Maersk CEO Vincent Clerc described on the carrier's Q1 2026 earnings call as "quite economical at current fuel prices" — voyages from South and Southeast Asia to the US East Coast were taking 42–45 days or more. Hormuz traffic was still far below normal in September 2026, but MSC moved its Indusa service's westbound leg back to the Suez Canal from September 23, 2026, so check current transit times on your booking.
What is a Section 301 investigation and how does it affect these three countries?
A Section 301 investigation, conducted by USTR under the Trade Act of 1974, examines whether a trading partner's policies or practices are unreasonable or discriminatory and burden US commerce. A positive determination allows USTR to impose additional tariff rates. The March 11, 2026 investigations into India, Vietnam, Cambodia, and thirteen other economies specifically examine structural excess manufacturing capacity. A positive determination could significantly raise the effective tariff burden on exports from all three origins above the Section 122 levels then in force.
Can a CAPE declaration be amended after submission — and how does IEEPA connect to this?
No. Once a CAPE Declaration is accepted by CBP, it cannot be amended. The IEEPA tariff framework — under which many duties were collected from India, Vietnam, and Cambodia origin goods — was struck down by the Supreme Court in February 2026. The CAPE system was established to process refunds of those duties. The Section 301 duties in force since July 24, 2026 are a separate program and do not change IEEPA refunds. If you have entries from these origins already in the CAPE refund queue, the new tariff framework does not reset or pause your Phase 1 eligibility.
How does Airlift USA help exporters and importers from India, Vietnam, and Cambodia?
Airlift is a licensed NVOCC (FMC OTI No. 016162); customs entries are filed through our licensed customs broker partners. Airlift provides freight execution, HTS classification review, rules-of-origin verification, and landed-cost analysis for exporters and importers moving goods between India, Vietnam, and Cambodia and the United States. We handle pre-shipment classification reviews and origin documentation verification, and we build current Cape rerouting timelines into all departure planning recommendations — not pre-war voyage assumptions that no longer reflect actual transit times
FROM THE AIRLIFT COMPLIANCE TEAM
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