Trump seeks new import taxes after Supreme Court tariff rejection

When the Supreme Court rejected President Donald Trump’s favored tariff approach in February, his administration moved quickly to keep the flow of tariff revenue moving into the U.S. Treasury. Those stopgap import levies were designed to buy time: they are set to expire on July 24, according to the Associated Press account. Starting this week, the Office of the U.S. Trade Representative will begin two investigations under Section 301, a legal pathway that can authorize tariffs based on certain trade practices and that can generate new taxes while the administration works through a new set of legal targets.

The first investigation, set to begin with hearings Tuesday and Wednesday, centers on forced labor. The administration is examining whether 60 economies—ranging from Nigeria to Norway and covering 99% of U.S. imports—do enough to prohibit trade in products made with forced labor. U.S. Trade Representative Jamieson Greer said in March that “For too long, American workers and firms have been forced to compete against foreign producers who may have an artificial cost advantage gained from the scourge of forced labor,” and he said the administration could punish “scofflaws” with new tariffs.

The second investigation, which hearings are expected to begin next week, focuses on production volume and pricing dynamics. The administration is investigating whether 16 trading partners, including China, the European Union and Japan, are overproducing goods in a way that drives down prices and puts U.S. manufacturers at a disadvantage. Those 16 economies account for 70% of U.S. imports, the Associated Press reported, citing Erica York of the Tax Foundation. Most of the major economies on both investigation lists—again including China, the EU and Japan—remain the targets of both probes.

In parallel, the administration has sought to address skepticism about how the investigations will be conducted. U.S. Trade Representative Greer, who is overseeing the process, has insisted he will not prejudge the investigations, the AP reported. Importers and foreign countries, however, have said the broader timeline and administration messaging already point toward outcomes, particularly given what the report described as statements by U.S. officials about replacing the original tariff revenue with new import taxes.

Criticism has also focused on how quickly the administration moved after the Supreme Court’s decision. The AP report said the United States is planning to replace the temporary measures with Section 301 tariffs in a timeframe that would be shorter than the process used during Trump’s first term against China, when the Section 301 work reportedly took nearly a year of investigation and public comment. Kenya Davis, a partner at Boies Schiller Flexner who has done pro bono work on human trafficking and forced labor, said, “It’s such a short timeframe,” adding, “It’s so condensed that it doesn’t make a lot of sense that they can do it that quickly.”

The legal backdrop dates to February 20, when the Supreme Court ruled that Trump had overstepped his authority by using the International Emergency Economic Powers Act, or IEEPA, to impose double-digit tariffs on almost every country on Earth. The AP report described how Trump used the threat of IEEPA tariffs to pressure trading partners, including the EU, Japan and South Korea, and it said the IEEPA levies brought in $166 billion before the court shut them down, with the federal government now required to refund importers who paid those tariffs.

Tariffs have remained central to Trump’s trade strategy as his administration responds to the court setback. The AP report said Section 122 of the Trade Act of 1974 allows the president to impose global tariffs as high as 15% for up to 150 days, and it described how the administration imposed 10% Section 122 tariffs two days after the Supreme Court decision. The AP said Trump had said he would raise the levies to the maximum 15%, though the report said he had not done so, and it described Congress as having limited appetite to extend the temporary measures as midterm elections approach.

Section 301 is the administration’s alternative path for imposing tariffs that, unlike the Section 122 authority, are not limited by the same short expiration period. The AP report said Section 301 tariffs expire after four years but can be extended, and it described the approach as having held up in legal challenges in Trump’s first term when the president used it to pressure China. The report said critics expect further challenges in court, but some lawyers and trade experts said the Section 301 process could better withstand review because it depends on procedures rather than the IEEPA emergency framework the Supreme Court rejected.

Joyce Adetutu, a partner at Vinson & Elkins, said, “Even if it is a veiled — or less-than-veiled — attempt to reinitiate the IEEPA tariffs, he still has the cover of the process itself,” according to the AP. Scott Lincicome of the libertarian Cato Institute’s Center for Trade Policy Studies similarly described IEEPA as easier to manipulate, saying, “One of the reasons Trump used IEEPA is because it was just a complete blank slate” and characterizing it as “a little tariff switch in the Oval Office that Trump could flip on and off anytime he wants.” He added, “You really can’t do that with 301,” as he contrasted the new investigations with what he said was the earlier emergency-authority approach.