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TUESDAY, JULY 28, 2026   |   SPECIAL REPORT & ANALYSIS

TRADE POLICY  |  SECTION 301 FORCED-LABOR TARIFFS

Forced-Labor Tariffs Are Final — Now Comes the Section 301 Court Test

USTR locks in duties on 60 economies as challengers attack its record
 

Analysis  ·  July 28, 2026

The Trump administration has completed the formal rollout of its nearly global Section 301 tariff regime, publishing both the presidential memorandum directing the action and U.S. Trade Representative Jamieson Greer’s detailed implementation notice in Tuesday’s Federal Register. The duties — generally 10% or 12.5% — had already taken effect at 12:01 a.m. ET July 24, with a limited exemption for goods already in transit and entered before July 28. That produced a virtually seamless handoff from the temporary Section 122 tariffs that expired July 24. Link to Federal Register notice. 

The publication is more than administrative housekeeping. It establishes the record the U.S. Court of International Trade will examine in deciding whether USTR properly used Section 301 to replace a broad tariff system previously imposed under other statutes. The central question will not be whether forced labor is a serious human-rights and trade problem. It will be whether USTR made the findings Congress required for each economy and adequately explained why tariffs on nearly all imports are an appropriate way to change each economy’s practices. Link to results of the 301 investigation.

Figure 1. Key dates in the Section 301 forced-labor tariff rollout. Source: Presidential memorandum and USTR implementation notice, Federal Register, July 28, 2026.

A tariff system that is narrower in name, but not in trade coverage

The 10% rate applies to 17 economies, including Canada, Mexico, India, Bangladesh, Cambodia, Indonesia, Malaysia and the United Kingdom. For the European Union and Taiwan, the combined most-favored-nation and Section 301 rate generally is capped at 10%. The corresponding ceiling is 12.5% for Japan, South Korea and Switzerland. Goods from the remaining investigated economies generally face a 12.5% additional duty, subject to exemptions.

Table 1. Section 301 forced-labor tariff structure, effective July 24, 2026. Source: USTR implementation notice, Federal Register.

Although the action covers 60 “economies,” it reaches the top 60 U.S. trading partners and 99.4% of U.S. imports. The European Union counts as one economy even though it includes 27 countries, meaning the investigations effectively reach 86 countries. Thus, the administration has replaced a universal tariff with a structure that is technically country-specific but commercially remains close to global.

USTR did soften the action through extensive product exclusions. The final notice exempts goods already covered by several Section 232 actions, USMCA-qualifying imports from Canada and Mexico, and additional categories that include certain animal products, seeds, vegetable products, sugar-containing goods, fertilizer and pesticide inputs, hides, leather and wood products. Those exclusions reduce the immediate exposure for agriculture and food supply chains, but there is no blanket agricultural exemption; liability will depend on the product’s tariff classification, origin and eligibility for preferential treatment.

USTR also acknowledged that individual companies and sectors could face higher costs. But it concluded that company- or sector-specific harm was unlikely to create an economy-wide disruption, particularly with duties capped at 12.5%. That distinction — between concentrated business costs and broader macroeconomic effects — is central to the administration’s defense.

Greer: Tariffs should not change the economic picture

In a Monday interview on Fox News’ Special Report with Bret Baier, Greer stressed that USTR was not determining that all 60 economies themselves employ forced labor. Instead, he said the investigation focused on whether those economies prohibit imports of goods made with forced labor, including products or components originating elsewhere. He cited solar panels and batteries from China as examples of goods the U.S. may block while other economies continue accepting them.

Asked whether the tariffs could influence the Federal Reserve’s policy deliberations, Greer replied, “I don’t think it has an impact at all.” He argued that the rates are similar to tariffs businesses have recently experienced and apply to fewer countries than the expired universal Section 122 tariff. However, USTR’s own 99.4% import-coverage figure makes the economic distinction less clear than Greer suggested: the number of covered jurisdictions may be smaller, but the amount of trade potentially affected is not.

Greer also presented Section 301 as the administration’s post-IEEPA pathway for addressing unfair trade practices on a country-by-country basis. He said USTR is completing another Section 301 investigation into excess industrial capacity involving 16 major partners, including China, Vietnam, Mexico and the European Union, and acknowledged that investigation could produce additional tariffs. That raises the stakes of the forced-labor litigation: the administration is treating this action not as a one-off measure, but as a potential template for broader tariff policy.

Cotton-linked TRQs remain unfinished

The presidential memorandum directs USTR to create three-year tariff-rate quotas for textile and apparel imports from Bangladesh, Cambodia, Indonesia and Malaysia. The amount entering free of the Section 301 duty would be linked to each economy’s purchases of U.S. cotton and other U.S. textile inputs. Until those quotas are established, the applicable textiles and apparel remain subject to the 10% tariff.

The mechanism could become a meaningful incentive for those major textile-producing countries to source more U.S. cotton, effectively using access to the U.S. apparel market to support U.S. commodity exports. But its commercial value cannot yet be calculated. USTR has not released quota volumes, covered tariff lines, formulas for converting U.S. cotton purchases into quota access or administrative procedures. The presidential memorandum says establishing the quotas should be feasible by Sept. 1, but USTR must publish another Federal Register notice before they take effect.

The lawsuits attack the foundation, not merely individual products

Two lawsuits were filed July 24 at the U.S. Court of International Trade. Learning Resources, which participated in the successful challenge to the administration’s IEEPA tariffs, filed with hand2mind and several HMTX-related companies. A separate proposed class action was filed by spice importer Burlap & Barrel and watch retailer Collective Horology.

Table 2. The July 24 challenges at the U.S. Court of International Trade. Source: Complaints as filed; allegations, not judicial findings.

Both cases argue that USTR did not adequately establish that each economy’s conduct was unreasonable or discriminatory, imposed a burden on U.S. commerce and could be corrected through the tariffs selected. The Learning Resources complaint emphasizes that 60 nominally separate investigations were completed in roughly two and a half months and alleges that USTR relied on generalized conclusions instead of economy-specific evidence. The Burlap & Barrel case additionally raises an alternative constitutional argument that, were Section 301 interpreted to authorize such sweeping tariffs without meaningful limits, it would amount to an unconstitutional delegation of Congress’ tariff authority. Those remain plaintiffs’ allegations, not judicial findings.

Section 301 is stronger than IEEPA — but not a blank check

The administration begins from firmer legal ground than it did with IEEPA. Section 301 expressly authorizes USTR to impose duties in response to unreasonable or discriminatory foreign practices that burden or restrict U.S. commerce. USTR also conducted hearings, received more than 2,100 comments across the investigation and proposed-action phases, and consulted with more than 45 foreign governments. Those procedural steps give the government a record that did not exist under the emergency-powers tariff approach.

Previous Section 301 tariffs on Chinese goods also ultimately survived litigation, but only after the Court of International Trade required USTR to provide a more reasoned response to public comments. The Federal Circuit upheld the tariffs in September 2025. That precedent shows both sides of the legal equation: courts recognize broad Section 301 tariff authority, but they also review whether USTR adequately explained its decisions under the Administrative Procedure Act. Moreover, the earlier case involved modifications to an existing China action, not 60 new investigations completed on a common timetable.

USTR has already addressed one expected challenge by noting that Section 301 permits tariffs on goods and sectors that are not themselves involved in the practice being investigated. The agency says broad tariffs create greater leverage than duties limited to products directly connected to forced labor. USTR also points to Cambodia, Guatemala, Honduras, India, Sri Lanka and Trinidad and Tobago adopting import prohibitions during the investigation, along with Jordan making a negotiated commitment, as evidence that the tariff threat can change behavior.

The more difficult issue may be whether USTR documented the burden on U.S. commerce and efficacy of the remedy separately for each economy. Uniform tariffs applied to countries with very different laws, enforcement systems and trade patterns could invite close scrutiny over whether the agency genuinely conducted 60 distinct investigations or used a common global theory with limited country-specific detail.

Severability is the administration’s legal firewall

The unusually detailed severability language in both documents is designed to prevent one adverse ruling from dismantling the entire tariff regime. The presidential memorandum declares each economy’s tariff a separate action. USTR goes further, stating that individual tariffs, tariff components and product exemptions should remain operative even if a court invalidates another portion of the action.

That language demonstrates that the administration planned for litigation risk. It does not cure an inadequate statutory finding or administrative record, but it could limit the remedy. A court might invalidate or remand the action for one economy, one tariff feature or one category of goods without automatically eliminating duties on all 60 economies.

Bottom line

The forced-labor tariffs are more legally durable than the administration’s former IEEPA duties because Section 301 expressly authorizes tariffs and requires an investigative process that USTR followed. But durability is not immunity. The litigation will test whether a statute intended to remedy identifiable foreign trade practices can support a tariff system covering nearly every U.S. import based on a broadly shared policy failure. The outcome could determine not only whether the July 24 duties survive, but whether Section 301 becomes the administration’s primary vehicle for future tariffs on industrial overcapacity and other global trade practices.

AG POLICY & MARKETS DAILY   |   TRADE POLICY  |  SECTION 301 FORCED-LABOR TARIFFS — TUESDAY, JULY 28, 2026