U.S. Importers are bracing for potential fresh tariffs as the Trump administration initiates investigations into trade practices in China, the EU, Mexico, and over a dozen other countries. This move comes after the Supreme Court limited the president’s ability to impose tariffs under the International Emergency Economic Powers Act of 1977 (IEEPA).
New Legal Avenue for Tariffs
United States Trade Representative (USTR) Jamieson Greer announced Wednesday the investigations, targeting “structural excess capacity”—or overproduction—under Section 301 of the Trade Act of 1974. This law allows the president to impose country-specific tariffs on nations deemed to be engaging in unfair trade practices. Section 301 has been used in over 130 cases, establishing a legal precedent for its use.
The administration’s reliance on Section 301 isn’t new. President Biden extended tariffs on China implemented under the law during his administration—and even increased them on products like electric vehicles and medical materials in 2024, as part of a four-year periodic review.
Legal Challenges Expected
Experts believe tariffs imposed under Section 301 are likely to face fewer legal challenges than those previously implemented under IEEPA. “For the plaintiffs, challenging whatever the administration does here is going to be much more hard than the IEEPA case,” said Timothy Meyer, an international trade expert and Duke Law School professor.
While Section 301 requires a more rigorous regulatory process than IEEPA, the administration appears determined to expedite the process, potentially enacting new tariffs before the expiration of current 10% tariffs enforced under Section 122 of the 1974 Trade Act by the end of July.
Implications for Importers
The potential for new tariffs adds to the uncertainty already facing importers. Blake Harden, of EY’s global trade policy practice, noted that importers “are asking a lot of questions” about the timing and scope of potential tariffs. There is concern that sectors already under investigation under Section 232 could face “double-scope” investigations. Ongoing trade negotiations with other countries could be impacted, potentially leading to protective provisions or stalled talks.
Frequently Asked Questions
What is Section 301?
Section 301 of the Trade Act of 1974 gives the president the power to impose tariffs on countries that the U.S. Deems to have engaged in unfair trade practices.
How does Section 301 differ from IEEPA?
Section 301 requires a more rigorous regulatory process, including a public comment period, while IEEPA allowed for more immediate action.
What are importers concerned about?
Importers are concerned about the speed at which new tariffs could be implemented, the potential for “double-scope” investigations, and the impact on ongoing trade negotiations.
How will these new investigations affect the global trade landscape as countries navigate potential tariff changes and reconsider existing trade agreements?
