Section 301 + Section 122 tariffs: real landed cost math for Shopify sellers in 2026

If you’re sourcing from China and shipping to the US in 2026, your landed cost looks nothing like it did 18 months ago. The combination of Section 301 duties (in place since 2018), the new Section 122 universal surcharge (15%, in effect since February 2026), and the elimination of the de minimis exemption (May 2025 for China, August 2025 globally) means every package — even a $5 phone case — now gets a formal customs entry, an HTS classification, and a duty bill.

This article walks through what each of those tariffs actually is, how they stack, and what your real landed cost looks like with a worked example using a $15 product. By the end, you’ll know whether your current sourcing setup is still viable — and what to change if it isn’t.

Disclosure: We run EboxMan, a sourcing and fulfillment agent for Shopify and WooCommerce sellers. Tariff handling and DDP shipping are part of what we do. We’ve tried to keep this article a straight explainer — references to our service are limited to the section near the end where it’s directly relevant.

The three tariffs that affect Chinese imports in 2026

Section 301 (Trump-era China tariffs, in effect since 2018)

Section 301 is the original “China trade war” tariff. It’s a category-by-category surcharge that applies to specific HTS codes, ranging from 7.5% on some consumer goods to 25% on many electronics, machinery, and metal products. The Biden administration kept these in place; the second Trump administration expanded them.

For most dropshipped consumer products, the Section 301 rate is 25% of the declared value.

Section 122 (universal 15% surcharge, in effect February 2026)

Section 122 is a new universal tariff that applies a flat 15% surcharge on imports from China, on top of existing Section 301 duties. This is a recent change — most sellers we’ve talked to in early 2026 are still adjusting their pricing.

If your product carries a 25% Section 301 rate, your effective duty rate after Section 122 is now 40% (25% + 15%), not 25% + 15% on the post-Section-301 value.

The end of de minimis (May 2025 for China, August 2025 globally)

This is the change that hit small dropshippers hardest.

The de minimis rule used to exempt any shipment under $800 from formal customs entry — meaning no duty, no broker, no paperwork. It was the legal basis for direct-from-China dropshipping at low AOVs. A $20 product shipped individually paid no duty and no broker fee. The package just arrived.

That’s gone for Chinese-origin goods. Every shipment now requires:

• A formal customs entry (CBP Form 7501)
• An HTS code classification
• Duty payment
• A licensed customs broker to file the entry (broker fees are typically $15–50 per shipment)

The supreme court struck down the IEEPA tariffs in February 2026, but Section 122 and the de minimis elimination are still in effect. If you’ve seen reporting that “the tariffs were struck down,” check the source — only one of three was, and not the one that affects most consumer goods.

How the three stack: a real example

Let’s run the numbers on a real product. We’ll use a $15 retail item — a moderately popular price point for Shopify dropshipping — sourced from China at a $5 unit cost, weighing 200g.

Scenario A: Direct-from-China shipping, individual orders (the broken model)

This is the AliExpress / “I ship every order separately” model that worked pre-May 2025.

If your retail price is $15, you’re now losing $21 per order before ad spend, payment processing, refunds, or platform fees.

Direct-from-China individual shipping is no longer a viable model for low-AOV products. The brokerage fee alone — which used to be zero under de minimis — is now larger than your product cost.

Scenario B: Consolidated DDP shipping, 50 units per shipment

This is the model that works in 2026: ship in bulk, pay duties once at the consolidated entry, distribute to customers domestically (or via a single customs entry with multiple addresses).

At a $15 retail price, you’re now at $4.00 gross margin per unit (26.7%), before ad spend and other costs. Still tight, but viable for products with strong unit economics or high reorder rates.

The difference between Scenario A and Scenario B is $25 per unit — almost entirely from amortizing the customs brokerage fee across multiple units.

Scenario C: US warehouse pre-stocking (highest margin, highest commitment)

If you have a proven bestseller and can forecast demand, importing in bulk to a US warehouse and shipping domestically gives you the best per-unit economics.

This requires inventory commitment and forecast accuracy, but for sellers doing 200+ orders/month on a single SKU, the math usually works.

What this means for your store

If your AOV is under $25 and you ship from China individually

Your unit economics are broken. You have three choices: raise prices, switch to consolidated DDP shipping through an agent, or stop selling that product line.

If your AOV is $25–$75

You can survive with consolidated DDP shipping but margins are tight. Pre-stocking your top SKUs in a US warehouse is worth modeling.

If your AOV is over $75

The tariff impact as a percentage of your sale price is smaller (10–15% rather than 50%+), but it’s still significant. DDP is a customer experience play here as much as a margin play — your customer should never see a customs invoice at their door.

How to find your real HTS code (and your real duty rate)

Section 301 rates vary by product. To know your actual rate, you need your product’s HTS (Harmonized Tariff Schedule) code, then look up that code’s specific Section 301 status.

A few starting points:

• The official US Harmonized Tariff Schedule is searchable at hts.usitc.gov
• For most consumer dropshipping categories (apparel, home goods, electronics accessories, beauty), Section 301 rates run 7.5%–25%
• Some categories (machinery, certain steel and aluminum products) carry higher rates
• The CBP HTS Search tool gives you the exact rate for your code

If you’re not confident in your HTS classification, that’s a real risk — misclassification is one of the most common ways small importers run into CBP penalties. A licensed customs broker (or an agent who handles classification, like us) can confirm the correct code.

What changed last week, last month, last year

Tariff policy has moved fast. Here’s a clean timeline so you can update your mental model:

• 2018: Section 301 China tariffs introduced (25% on many categories)
• 2024: Biden administration retains and expands some Section 301 lines
• May 2025: De minimis exemption eliminated for Chinese-origin goods
• August 2025: De minimis suspended globally (all origins)
• December 2025: IEEPA-based emergency tariffs introduced
• February 2026: Section 122 universal 15% surcharge implemented; Supreme Court strikes down IEEPA tariffs (Section 301 and Section 122 remain)
• April 2026: No new changes; current state has held for ~2 months

If you’re reading this article more than 60 days after publication (April 2026), check current rates before pricing decisions. Tariff policy has changed more in the last 18 months than in the previous 18 years.

The single biggest mistake we see Shopify sellers making in 2026

Treating tariffs as a “future thing” instead of a current line item.

We talk to sellers every week who are pricing their store as if it’s 2024 — using their old landed cost, taking the order, and absorbing the new duty out of margin without realizing it. They notice that ad spend feels harder to make work. They notice their refund rate creeping up because customers are getting surprise customs bills at their door (DDU shipping). They don’t always connect it to the tariff change.

The fix is two parts: 1. Recalculate your landed cost on every active SKU using current Section 301 + Section 122 rates 2. Either raise prices, switch to DDP shipping, or pre-stock your bestsellers — but make a decision instead of bleeding silently

Where EboxMan fits (the disclosure section)

We’re a sourcing and fulfillment agent that’s been operating since [2019] from Hong Kong, with operations in Yiwu and a Vietnam-based account team. Tariff handling is one of the things we built our service around.

Specifically, we offer:

• DDP shipping by default — duties prepaid, no surprise bills for your customer
• Per-unit tariff-inclusive pricing — we quote one number that includes product, shipping, duties, and our service fee
• HTS classification done by our customs team, not pushed back to you
• Shipment consolidation that brings the per-unit brokerage cost down (often from $25 to under $1)

You don’t need to use us to apply the math in this article. The math is the math. But if you’d like a landed cost calculation on your specific products with current rates and our DDP routing, you can request a quote and we’ll send one over within 3–5 business days.

TL;DR

• The end of de minimis + Section 122 (15%) + Section 301 (often 25%+) means total effective duties on many Chinese consumer goods now exceed 40%.
• Direct-from-China individual shipping is no longer viable for sub-$25 AOV products. The per-shipment brokerage fee ($25+) breaks the unit economics.
• Consolidated DDP shipping (multiple orders combined into one customs entry) brings per-unit costs back to viable levels for most growth-stage sellers.
• US warehouse pre-stocking gives the best per-unit economics for proven bestsellers, but requires inventory commitment.
• Recalculate landed cost on every active SKU using current rates. Either raise prices, switch shipping models, or stop selling the broken lines — but make a decision.

Have a specific product you’d like landed cost on? Send us the product link and volume — we’ll reply with a tariff-inclusive per-unit estimate within 24 hours.