🚨 The Tariff Swap Happened. Section 301 Is Now the Law. Here's Your New Rate Card.

This week's signal: It happened. At 12:01 a.m. on Friday, Section 122 expired and Section 301 took its place in the same breath. The tariff regime that will govern US imports for the rest of this decade is now live. Amazon reports Q2 earnings tomorrow with Prime Day baked into the quarter for the first time. New Section 232 tariffs on copper, semiconductors, and lumber are stacking on top. And the real back-to-school spending wave starts this week. Here's your first briefing under the new trade regime.

1. The Tariff Swap Happened Friday. Section 301 Is Now the Law. Here's Your New Rate Card.

At 12:01 a.m. EDT on July 24, Section 122's 10% surcharge expired by operation of law and Section 301 forced labor tariffs took effect in a seamless transition. No gap. No grace period. The new regime: 10% on approximately 14 economies (EU, Canada, Mexico, UK, Taiwan, and others) and 12.5% on 46 economies (China, Japan, India, Korea, Vietnam, Thailand, Brazil, Australia, and 39 others). Brazil faces a combined 37.5% exposure under its separate Section 301 investigation. These rates have no expiration date and no statutory cap. This is the tariff structure that will govern US imports until Congress or a future administration changes it.

What you need to know by origin: EU: A 15% all-inclusive ceiling replaced Section 122. It doesn't stack on MFN. Autos dropped from 27.5% to 15%. Steel and aluminum stay at 50% under Section 232. Re-run any EU landed cost quoted before July 1. Canada/Mexico: Nothing changed at the border. USMCA-qualifying goods continue entering at 0%. Keep certifying origin. China: Existing Section 301 lists (7.5-100%) survive and predate 2026. The new forced labor 12.5% is an additional layer. Total effective rates on most Chinese goods sit around 35%. All origins: Section 232 on steel, aluminum, and copper (50%) has no sunset and is unaffected. CAPE refunds for IEEPA duties have now disbursed $86.3 billion. If you haven't filed, the portal is still open.

2. Amazon Reports Q2 Earnings Tomorrow. Prime Day Is in the Number for the First Time.

Amazon reports Q2 2026 results after market close on Thursday, July 30, at 2:00 p.m. PT. This is the first quarter with Prime Day baked into the numbers (the event moved from July to June 23-26). Consensus expects revenue of ~$197 billion (16-19% YoY growth) and EPS of $1.82 (up from $1.68 YoY). Amazon guided $194-199 billion in net sales and $20-24 billion in operating income, including ~$1 billion in Amazon Leo satellite costs.

What sellers should watch: AWS growth is expected to accelerate to 32-33% (from 28% in Q1), driven by Anthropic-related revenue and OpenAI models on Bedrock. BofA's Justin Post raised revenue and EBIT estimates above consensus. Capex could rise to $210 billion on higher memory costs. The ad revenue number matters most for sellers — Amazon's advertising business is one of its fastest-growing, highest-margin segments. KeyBanc's Justin Patterson raised his price target to $335. Wall Street has a Strong Buy consensus (45 Buys, 1 Hold). The Q3 guidance range will tell you how Amazon sees the tariff transition affecting consumer spending through the rest of the year.

3. New Section 232 Tariffs Are Stacking: Copper at 50%, Semiconductors at 25%, Lumber at 10%.

While Friday's Section 301 swap dominated headlines, new Section 232 tariffs also went into effect alongside them. Copper articles now carry a 50% tariff (matching steel and aluminum). Semiconductors face a 25% tariff. Lumber is at 10%. Section 232 has no sunset — these rates stay in effect until a future president revokes or modifies them. They stack on top of Section 301 and MFN rates. That means a copper component imported from a 12.5% Section 301 economy pays 62.5% total (12.5% + 50%).

Why DTC operators should care: You don't import raw copper or semiconductors. But your suppliers do. Electronics components, wiring, connectors, circuit boards, packaging machinery, shelving, and warehouse infrastructure all use these materials. The cost increase flows downstream into your COGS, your 3PL rates, and your packaging costs. If your Q4 cost estimates were built before July 24, re-quote them. The tariff stack is now: MFN + Section 301 (10-12.5%) + Section 232 (10-50% depending on material) + any existing China Section 301 (7.5-100%). Section 232 investigations into pharmaceuticals and medical devices are also ongoing.

4. Back-to-School: The Real Spending Wave Starts This Week. 52% of the $85B Is Still Ahead.

Deloitte's data showed a 13-point shift this year: only 48% of back-to-school spending occurred by end of July (down from 61% in 2025). That means 52% of the $85.4 billion season is still ahead of us. August spending is projected at $173 per child, up from $137 last year. September accounts for 29%. Families are being more intentional, waiting for deals closer to school start dates and spreading purchases across more paychecks.

The tariff angle nobody's talking about: Back-to-school season is the first major selling event under the new Section 301 regime. Apparel and school supplies sourced from 12.5% economies now carry that additional duty. Brands that absorbed the cost under Section 122 (which was the same or lower for most origins) may face margin compression in August if they haven't adjusted pricing. The 75% brand-switching stat is the other pressure: parents will walk away from brands that price up. Value messaging, bundle pricing, and quality-for-the-price positioning win this season. If you sell anything adjacent to back-to-school and your campaigns aren't running, this is the week to launch. The brands that pull spend after August 1 are leaving more than half the season on the table.

5. Friday's Swap Was Stage One. The US-China Truce Expires November 10. The Second Wave Is Coming.

The tariff regime is being rebuilt in stages and we're only through the first one. November 10: The Busan trade truce expires. If not renewed, tariff rates on Chinese goods could increase significantly above the current ~35% effective rate. The Board of Trade concept from the Trump-Xi summit hasn't been formalized. Late 2026: The overcapacity Section 301 investigation covering 16 economies (electronics, semiconductors, automotive, batteries, machinery, metals) is on a separate timeline and could produce additional tariffs that stack on top of the forced labor rates already in effect.

The full stack for Q4 planning: MFN rates + Section 301 forced labor (10-12.5%) + Section 232 (10-50% by material) + existing China Section 301 (7.5-100%) + any new overcapacity Section 301 (TBD). Section 232 investigations into pharmaceuticals and medical devices are ongoing. Section 338 of the Tariff Act of 1930, allowing retaliatory tariffs up to 50%, has been publicly discussed. For importers and DTC brands sourcing internationally: your Q4 landed cost model needs at least two more tariff scenarios layered in. The new Section 301 regime that landed Friday has no expiration. But it also has no ceiling. And it's not the last layer.

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