On June 2, the Office of the United States Trade Representative (USTR) announced it would apply Section 301 of the Trade Act of 1974 to reimpose tariffs on 60 economies, including the European Union, bringing the total number of affected countries to more than 80. The move follows the US Supreme Court’s rejection in February of Trump’s use of the International Emergency Economic Powers Act (IEEPA) to wage a trade war.
Under the USTR proposal, additional tariffs of up to 12.5% would be levied on imports from these countries, citing their failure to adequately prevent trade in goods produced by forced labor. The target list includes many developing nations in the Global South, but also close US allies such as the UK, Canada, the EU, Japan, Australia and New Zealand.
Trade experts say this new approach may be more difficult for courts to strike down than the previous policy. Madeline Chalecki, Deputy Director of the Geoeconomics Center at the Atlantic Council, said: “Unlike IEEPA, Section 301 requires investigations, public comment periods and formal decisions before tariffs can be imposed. The administration is essentially trading speed and discretion for legal durability and certainty.”
The USTR said interested parties may submit written comments on the tariff proposal by July 6, ahead of hearings scheduled for July 7. Specifically, a 10% additional tariff is proposed on imports from Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, the EU, Guatemala, Indonesia, Malaysia, Mexico, Pakistan, Taiwan and the United Kingdom. Meanwhile, the remaining 45 countries, including Australia, China, India, New Zealand, Nigeria, Japan, South Korea and Vietnam, would face a higher additional tariff of 12.5%.
Many targeted economies have voiced opposition. The EU called its inclusion “unjustified,” while China accused Washington of imposing “unilateral restrictive measures” under the guise of “forced labor.” India has taken a more neutral stance, still negotiating a trade deal with the US.
Experts warn the new tariff campaign could push countries further away from the US. Two Indian international trade lawyers, Shantanu Singh and Vikram Naik, said: “US tariffs are prompting nations to expand trade faster. Deals like the EU-Mercosur and EU-India agreements are prime examples.” The EU-Mercosur agreement took effect on May 1, creating a trade zone of 700 million people, while the EU-India agreement signed in January established a free-trade area of 2 billion people.
The global impact of these tariffs may be limited because they target “many trading partners at once,” according to Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI). However, the larger impact may fall on the United States itself. “More tariffs mean higher import costs, greater uncertainty for businesses, disrupted supply chains and higher prices for US consumers and manufacturers,” Srivastava added.
Chalecki warned that if successful, the move could “accelerate the reorientation of global trade away from the US.” She explained: “Businesses will shift supply chains and make different investment decisions, and we could see a rise in regional and sectoral trade agreements without a large US presence.”
