06/04/2026
In light of the ongoing changes and misunderstandings regarding the state of Tarrifs, I thought it appropriate to provide some current insight.
The Trump administration’s initiative to effectively replace struck-down IEEPA tariffs by turning to Section 301 of the Trade Act of 1974 took a step forward as the U.S. Trade Representative proposed the imposition of duties on 60 countries and economies based on a determination that they haven’t sufficiently addressed forced labor issues. The Section 301 action is the most recent by the Trump administration to execute its tariff strategy
The Trump administration responded to the U.S. Supreme Court ruling quashing IEEPA tariffs with temporary tariffs imposed under Section 122 of the Trade Act of 1974, which the U.S. Trade Court recently struck down.
Although a refund program covering the IEEPA tariffs has begun, the U.S. Justice Department has challenged the process as it applies to those duties that have been liquidated, or actually transferred to government coffers, in a May 29 filing with the U.S. International Trade Court.
In the Section 301 initiative, the USTR investigated 60 countries and economies in all, including China, Vietnam, the United Kingdom, Japan and Brazil. In all, USTR pointed to 54 countries it determined have not imposed or enforced a prohibition on the implementation of goods produced with forced labor. In the case of Canada, Ecuador, the European Union, Indonesia, Mexico and Pakistan, USTR maintained each had failed to effectively enforce a prohibition on forced labor goods. However, how USTR is proposing to implement tariffs is somewhat complex.
USTR proposed a additional 10% duty for countries and economies that impose a forced labor import prohibition, including Canada, Ecuador, the European Union, Indonesia, Mexico and Pakistan; and for economies that have undertaken commitments in their respective Agreements on Reciprocal Trade on forced labor import prohibitions, including, Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, Guatemala, Indonesia, Malaysia and Taiwan, as well as economies that have imposed a partial regime to prevent the importation of certain forced labor goods, including the United Kingdom For all other economies that have failed to impose and effectively enforce a forced labor prohibition, USTR called for 12.5% rate.
The tariff impositions are actionable based on its investigation, according to USTR, which noted that the trade representative was ready to take all appropriate and feasible action based on the specific direction of President Trump to secure the elimination of policies that don’t adequately address forced labor goods in the international marketplace.
USTR issued a request for comments on its determination that called for written comment submissions by July 6 and a notice of hearings at the International Trade Commission office commencing on the morning of July 7. Any actual imposition would come after the hearings.
The latest was the second USTR action taken against Brazil in two days. On June 1, USTR announced it was proposing a 25% tariff on Brazilian goods under Section 301. In a Notice of Determinations, USTR stated that certain trade actions, including those related to digital trade, preferential tariffs and intellectual property protection, as well as deforestation and ethanol market access, are unreasonable or discriminatory to U.S. commerce and, so, are actionable.
As part of the June 2 notice, the Trade Representative also proposed a mechanism that would allow for certain volumes of apparel and textile imports from particular economies to enter the U.S. at a reduced tariff rate. In addition, USTR proposed exemptions regarding Section 232 tariffs, imposed when it is determined that imports threaten U.S. national security, and raw materials.
The implications of these actions to the consumer are to be seen in the near future, but rest assured, if implimented, will result in increase prices to the those products impacted.
