President Donald Trump is continuing to wage a global trade war with a new set of tariffs designed to hold up in court and with potentially far-reaching consequences that could last well beyond the current administration.
Duties of 10 to 12.5% on 60 U.S. trading partners went into effect on Friday, claiming to combat unfair practices related to “forced labor.” But unlike Trump’s earlier global tariffs, the latest batch rests on Section 301 of the Trade Act of 1974, and it’s considered to be on firmer legal footing.
That’s after the Supreme Court struck down his “Liberation Day” levies under the International Emergency Economic Powers Act, prompting him to apply temporary stopgap tariffs that expired just as the new ones took effect.
Since they largely replace import taxes that were in place earlier, the immediate economic impact of the Section 301 tariffs is seen as minimal, but they still set a precedent that future presidents could invoke, according to Scott Lincicome, vice president of general economics at the Cato Institute.
In a column in the Dispatch, he dismantled the administration’s justifications, saying the tariffs looked predetermined, relied on thin evidence, applied rates far out of proportion to forced labor’s actual trade impact, and offered no off-ramp.
“The forced labor action is a clear abuse of the law and a serious departure from past U.S. government practice—even under President Trump,” Lincicome wrote. “By no reasonable measure can it be considered anything other than a ham-fisted way to reinstall Trump’s tariff wall and protect it from another IEEPA-like defeat in federal court.”
Despite all that, courts may still rubber-stamp the new tariffs, unwilling to challenge the administration’s determinations and actions, he added.
Congress might not step in either. In fact, even as public opinion on Trump’s tariffs has soured, lawmakers have shown little urgency to roll them back.
As a result, Section 301 could be used to tariff “any country, at any rate, and for any reason and duration, as long as it checks the law’s minor procedural boxes,” according to Lincicome.
While Section 301 requires an investigation into unfair trade practices before tariffs can be imposed, any administration can simply go through the motions by claiming some form of harm and offering justifications with little merit, he warned.
“This is precisely the open-ended tariff power grab the courts checked with their IEEPA rulings, just with a little more procedural window-dressing,” Lincicome wrote. “In such a case, Section 301 would be a broad tariff generator instead of the targeted tool Congress thought it designed, and it’ll surely be used by Trump or any future president who wants to tariff trading partners over carbon emissions, labor standards, AI regulation, or anything else.”
Meanwhile, more tariffs are in the works that will add to the overall bill for imports. Oxford Economics estimated the effective U.S. tariff rate will rise to 9.2% from 8.6%, then climb further to 9.6% when new pharmaceutical tariffs take effect later this month.
The U.S. also has three other investigations pending under Section 301: one on 16 countries relating to excess capacity and manufacturing; another on Vietnam over intellectual property protection; and a probe on Germany regarding underpayment for pharmaceutical innovations.
“Once in place, Section 301 tariffs can be stacked and adjusted rapidly, creating risk to our baseline tariff assumptions,” Sara Godfrey, associate U.S. economist at Oxford Economics, wrote in a note Friday.
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