Tier-2 Sugar Imports under IEEPA & Section 122 and Outlook with New Section 301 Tariffs

➩ “Tier-2” sugar (over-quota) imports have surged in recent years, weighing on U.S. prices and producers. Any country may ship Tier-2 sugar after paying a fixed 15.36¢/lb duty. Frozen since 2000, that duty has lost about half of its real value. As the U.S.–world price spread widened above the cost of entry, imports rose to about 1.2 million STRV in FY2024. The added supply capped the U.S. raw price and lifted stocks-to-use to a near-record 18.9% in the 2024/25 crop year; our earlier modeling estimated that it reduced the raw price by 5 to 8¢/lb, equal to about $0.9 to $1.5 billion a year in lost producer revenue and up to $1.8 billion including refined-market effects.

➩ IEEPA tariffs significantly reduced Brazilian shipments in 2025. While the 50% tariff was in force, from August 2025 through February 2026, Brazilian over-quota raw and refined sugar shipments fell from 370,188 metric tons in the same months a year earlier to just 2,354 metric tons. Specialty and organic entries rose for quota-related reasons.

➩ Other suppliers backfilled Brazil’s reduced volume, but not all. Over-quota shipments from all other countries rose 90% across the matched seven-month periods, replacing about one-third of Brazil’s lost volume on a combined raw-and-refined basis and more than half on the raw side, where alternative cane suppliers are more readily available. The episode shows that the tariffs reduced total Tier-2 imports, but backfill shifted sourcing away from Brazil and kept the broader channel open.

➩ The import landscape is at an inflection point. The IEEPA tariffs have lapsed and the temporary Section 122 surcharge has expired, while a 25% Section 301 tariff now applies to certain Brazilian goods and final forced-labor tariffs of 10% to 12.5% apply across 60 economies. The result is a shifting and uneven tariff structure across suppliers.

➩ Underlying import pressure remains. The Tier-2 duty is still fixed, and even with the new Section 301 tariffs, the U.S.–world price spread remains wide enough to cover the cost of entry, preserving a profitable arbitrage for lower-tariff suppliers. Rates vary across origins, with the highest combined rate on Brazil and lower rates on other major Central and South American suppliers. As with the IEEPA tariffs, the new actions should slow over-quota imports, but uneven rates may allow continued backfill, reducing the flow without closing the channel.

Recommended Citation: Arita, S., Wang, M., and Steinbach, S. (2026). Tier-2 Sugar Imports under IEEPA & Section 122 and Outlook with New Section 301 Tariffs. NDSU Agricultural Trade Monitor 2026-07. Center for Agricultural Policy and Trade Studies, North Dakota State University. July 25, 2026.