Trump’s Dubious New Section 301Tariffs

The Trump administration has taken a key step toward rebuilding a tariff wall around the U.S. economy, announcing new restrictions on goods from 60 trading partners that U.S. officials say lack sufficient prohibitions on the use of forced labor.

Under the plan, goods from nations that the U.S. says have not banned forced labor, including China, India, Britain and Japan, will face 12.5 percent tariffs. Goods from the European Union, Canada, Mexico and other nations that the U.S. says have failed to enforce bans will face 10 percent levies, the administration said in a late-night announcement Tuesday.

While he’s relying on a different statute, the tariffs Trump plans to impose here seem very similar to the 10% Section 122 tariffs recently invalidated by the US Court of International Trade, and the International Emergency Economic Powers Act (IEEPA) tariffs struck down by the Supreme Court in February, in a case I helped bring. The tariff rates (10-12.5%) are similar and so are the various exemptions outlined by the administration.

In addition, I am extremely skeptical of the claim that all of these sixty countries – including numerous affluent liberal democracies – are actually more lax about importing goods produced by forced labor than the US is. And if forced labor were really the concern, there would be no reason to impose massive tariffs on virtually all imports from those nations, even though the vast majority of those goods have little or no connection to forced labor. It sure looks like the forced labor issue is just a pretext for large-scale protectionism of the same kind courts blocked earlier. This looks like yet another presidential power grab seeking to usurp Congress’ authority over tariffs, granted by Article I of the Constitution.

In an analysis on Twitter/X Georgetown University law Prof. Peter Harrell – a leading expert on international trade law – notes that the “proposed tariffs are pretty clearly a straightforward attempt to recreate the IEEPA tariffs, and not the sort of detailed and precise country-by-country actions that 301 has been used for in the past.” He adds that “while there is some country-by-country analysis of how individual investigated countries either do not have or do not enforce prohibitions on importers made by forced labor, there is not detailed country-by-country analysis about how those imports harm US commerce [as Section 301 requires]. Instead, USTR relies on the case studies and more general, global macroeconomic studies of forced labor in the global economy to argue harm.”

In a recent article on Just Security, legal scholars Gregory Shaffer and Jeremiah May argue that the use of Section 301 to impose sweeping tariffs on many nations and goods at once is vulnerable to the same types of nondelegation and “major questions” challenges as helped bring down the IEEPA tariffs. The major questions doctrine requires Congress to “speak clearly” when authorizing the executive to make “decisions of vast economic and political significance.”

I agree with most of their analysis, and would add that three of the six majority justices in the IEEPA Supreme Court case (Chief Justice Roberts, Barrett, and Gorsuch) relied in large part on the major questions doctrine in ruling against the IEEPA tariffs. The same is true of the Federal Circuit ruling against those tariffs; Federal Circuit precedent is binding on the US Court of International Trade, which would review any challenges to the Section 301 tariffs. The imposition of massive tariffs imports from 59 countries, plus all of the European Union, is undeniably a major question, just like the IEEPA tariffs were. And, like those tariffs, they will – if allowed to remain in place – raise prices for consumers and inflict massive damage on the US economy, while further poisoning relationships with our allies and trading partners.

Furthermore, the Supreme Court majority in the IEEPA case emphasized that “the president does not have the power to “impose tariffs on imports from any country, of any product, at any rate, for any amount of time.” Chief Justice Roberts went on to note that, while some statutes do grant the president tariff authority (among which they specifically cited Section 301), “[w]hen Congress has delegated its tariff powers, it has done so in explicit terms, and subject to strict limits,” including “demanding procedural prerequisites.” As Shaffer and May explain, Section 301 targets specific “unfair” trade “policies” and “practices” and is not a general grant of tariff authority to be used whenever the president wants. The proposed Section 301 tariffs, they emphasize, go far beyond anything done under Section 301 in the past.

Ultimately, the new Section 301 tariffs appear to be yet another attempt to give the president a blank check to impose tariffs at will. The same is true of the administration’s plans to use Section 301 to target “structural excess capacity,” which rely on the absurd premise that it is somehow an unfair trade practice for countries to be able to produce more goods than they can use themselves.

The new Section 301 tariffs cannot go into effect until there is a notice and comment period. Interested groups can submit comments until July 6. Peter Harrell urges stakeholders to submit comments opposing the tariffs, and I agree! They are unlikely to change the administration’s position, but could potentially help plaintiffs in future litigation against the tariffs, when and if they are imposed.

Should the administration go ahead with these plans, I urge industry groups, public interest organizations (like the Liberty Justice Center, which I worked with on the IEEPA case), and state governments to bring lawsuits challenging the Section 301 tariffs. The IEEPA and Section 122 cases show that courts are willing to strike down massive tariff power grabs, and will not give unlimited deference to the executive. That doesn’t guarantee victory. But it is grounds at least for cautious optimism.