Bananas, cocoa, flowers and selected minerals are exempt while shrimp and other goods remain covered.

Ecuador’s most important agricultural exports have largely escaped a new United States tariff program, but shrimp, canned tuna, broccoli and several manufactured products will continue entering the country with an additional 10% charge.

The measure took effect July 24th under Section 301 of the U.S. Trade Act and is tied to Washington’s investigation of how 60 trading partners prevent goods made with forced labor from entering their markets.

Bananas, plantains, cocoa, flowers, instant coffee and several mineral and metal products are among the Ecuadorian goods excluded from the new surcharge. Exporters estimate that the exemptions cover approximately 54% of Ecuador’s non-oil sales to the United States.

The remaining 46%, including much of Ecuador’s seafood trade, will continue paying the 10% surcharge.

Tariff changes name but not rate

The new action does not place another 10% duty on top of the temporary surcharge Ecuadorian goods had already been paying.

Instead, the Section 301 tariff replaces the temporary 10% global surcharge that expired July 24th. For Ecuadorian products that are not exempt, the practical result is that the additional tariff remains at 10%, although the legal justification for collecting it has changed.

The distinction resolves conflicting initial descriptions of the announcement, some of which suggested that Washington had imposed an entirely new charge on Ecuador. The final U.S. decision confirms that the previous tariff was replaced rather than doubled.

Ecuador was also assigned the lowest rate within the new Section 301 system. Seventeen economies received the 10% rate because they had adopted a forced-labor import prohibition, had committed to introducing one through a reciprocal trade agreement or had established a partial system intended to block certain goods.

Other economies investigated by Washington were assigned a rate of 12.5%.

The countries receiving the lower rate include Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, and the United Kingdom.

Major farm exports protected

The exemptions soften the impact on some of Ecuador’s largest and most recognizable export industries.

Fresh bananas and plantains, cocoa beans and some cocoa derivatives, roses and other fresh flowers, palm oil and instant coffee are among the goods that will not pay the Section 301 surcharge.

The exclusions also cover tuna loins, certain wood products, sugar, vegetable and cereal seeds, and strategic minerals such as uranium and titanium. Several base and precious metals—including iron, manganese, copper, nickel, aluminum, zinc and silver—are also included.

Washington established broad exemptions for raw materials that could become scarce in the United States if taxed, goods that could create wider economic disruption and products that cannot be produced domestically in sufficient quantities or obtained elsewhere at reasonable prices.

The United States also approved country-specific exemptions intended to encourage selected governments, including Ecuador’s, to meet their commitments on forced-labor imports.

Ecuador received exemptions covering 151 tariff classifications, according to the exporters’ federation. Those classifications include roses, other flowers, palm oil, plywood, tropical wood boards and cork products.

Avoiding the Section 301 surcharge does not necessarily mean that every exempt product enters the United States completely duty-free. Ordinary tariffs can still apply because Ecuador does not have a comprehensive free trade agreement with the United States.

Shrimp remains exposed

The largest concern for exporters is shrimp, Ecuador’s leading non-oil export and one of its most valuable products in the U.S. market.

Frozen shrimp was not included in the exemptions despite requests that Washington spare frozen seafood from the measure. Lobster, crab and other crustaceans will also continue paying the additional 10%.

That leaves the seafood industry more exposed than banana, cocoa and flower producers, particularly when Ecuadorian companies must compete with suppliers operating under different trade arrangements or lower production costs.

Canned tuna is also subject to the surcharge, although tuna loins are exempt. The difference means the tariff treatment can depend not only on the product but also on its level of processing and specific customs classification.

Other affected agricultural products include broccoli, pitahaya, papaya, melon and several additional fruits.

Manufactured goods facing the surcharge include toquilla straw hats, bags, luggage, clothing, footwear and products made from metal, ceramics or glass.

Washington questions enforcement

The tariff action follows a U.S. review of whether Ecuador and other trading partners effectively prevent imports produced wholly or partly with forced labor.

Ecuador approved a general prohibition on those imports through a Foreign Trade Committee resolution on April 29th, following commitments made in a reciprocal trade agreement signed with the United States in March.

Washington acknowledged that Ecuador had adopted the prohibition but said it had not found evidence of investigations, seizures or comparable enforcement actions. U.S. trade officials also said Ecuador had not taken sufficient action against goods associated with known forced-labor risks.

Ecuador was grouped with Canada, the European Union, Indonesia, Mexico and Pakistan as economies that had established prohibitions but had not yet enforced them effectively.

The Ministry of Production has said it will monitor the measure and use technical, administrative and diplomatic channels to protect Ecuador’s exporters.

For industries covered by the exemptions, the immediate threat has been reduced. For shrimp growers, food processors and manufacturers still facing the surcharge, however, the cost of reaching the U.S. market remains unchanged—and the possibility of obtaining future relief may depend on Ecuador demonstrating that its new forced-labor import ban exists not only in law, but in practice.