Key Characteristics and Strategic Implications of USTR Section 301 Measures

The U.S. Trade Representative’s (USTR) Section 301 action under the Trade Act is distinguished from conventional approaches to addressing forced labor, as it deems a trading partner’s institutional deficiencies and lack of enforcement regarding forced labor import bans an unfair trade practice, and imposes additional tariffs based on this determination.

• Generally, forced labor regulations take the form of import or market bans that directly block the entry of the relevant goods, or require companies to conduct supply chain due diligence and disclosures.
• In contrast, this measure defines a trading partner’s institutional deficiencies or lack of enforcement as an unfair trade practice, and adopts a method of imposing additional tariffs on a broad range of goods imported into the U.S. from the 60 targeted economies under investigation, with the exception of certain excluded items.
• Currently, as the Trump administration faces legal roadblocks in exercising tariff authority through the International Emergency Economic Powers Act (IEEPA), and as Section 122 of the Trade Act also faces limitations as a temporary measure alongside legal challenges, the administration requires alternative legal justifications and procedures to maintain broad-based tariffs.
• The executive order on Customs Enforcement announced on June 3 is aimed at tightening enforcement regarding the importer of record, bonds, beneficial ownership, country-of-origin marking, forced labor, rules of origin, and duty evasion.

This action is situated within the Trump administration’s broader trend of utilizing Section 301 of the Trade Act to accumulate individual issues, such as forced labor, Brazilian trade practices, and structural overproduction, as tariff justifications through investigation, determination, and hearing processes. This suggests that following the legal challenges surrounding its tariff authority under IEEPA and Section 122 of the Trade Act, the administration is shifting toward making the justifications for imposing tariffs more granular and procedural, while forced labor serves in this process as one justificatory pillar for legitimizing additional tariffs and as a leverage tool against trading partners.