Section 301’ing The World (Or 99.4% Of It)

As our readers may recall, we predicted in July 2025 that the Trump Administration would react to the invalidation of IEEPA tariffs by “Section 301’ing the world.” That prediction has now effectively come to pass, with Section 301 tariff actions being deployed at an unprecedented scale.

On June 2, 2026, the Office of the United States Trade Representative (“USTR”) issued a press release announcing affirmative determinations in all 60 of its Section 301 forced labor investigations, concluding that every major U.S. trading partner has failed to adequately prohibit or enforce bans on imports of goods produced with forced labor.¹ The 60 economies collectively account for 99.4% of all goods imported into the United States.² The USTR has proposed additional tariffs ranging from 10% to 12.5% on imports.³

Background: How We Got Here

A heavy use of Section 301 tariffs has been on the horizon since the Supreme Court’s decision striking down President Trump’s use of the International Emergency Economic Powers Act (“IEEPA”) tariffs. In the immediate aftermath of that ruling, the Trump Administration issued temporary tariffs under Section 122 of the Trade Act of 1974. Those tariffs were imposed with a 150-day deadline that expires on July 24, 2026, unless extended by Congress.

In order to partially replace the short-lived Section 122 tariffs, on March 12, 2026, USTR self-initiated Section 301 investigations into 60 of the largest U.S. trading partners. In those investigations, USTR opened a public comment docket that received over 450 written submissions, held two days of public hearings, and conducted confidential government-to-government consultations with 46 of the 60 economies under investigation.⁴

The Legal Framework

Section 301(b) of the Trade Act of 1974 authorizes USTR to take action against foreign acts, policies, or practices that are “unreasonable or discriminatory” and burden or restrict U.S. commerce – even where no violation of international law exists.⁵ Critically, Section 301 explicitly identifies “a persistent pattern of conduct that . . . permits any form of forced or compulsory labor” as an example of unreasonable conduct.⁶ The statute also provides a limited defense: USTR shall not treat such conduct as unreasonable if the foreign country has taken actions demonstrating “significant and tangible overall advancement” in addressing the relevant labor practices, or if those practices are consistent with the country’s level of economic development.⁷

What USTR Found

Unsurprisingly, USTR found no applicable defenses across any of the 60 economies.

Because Section 301 covers both affirmative conduct and failures to act, USTR also focused on these economies’ inadequate enforcement against forced-labor imports.

And while USTR distinguished legally between failing to adopt a prohibition and failing to enforce one, the practical result was the same: each of the 60 economies failed on adoption, enforcement, or both.⁸

The Proposed Remedy: Two Tiers and a Textile Mechanism

As a result of these investigations, USTR proposed two tariff rates, as follows:

• 10%: Economies that (i) have made forced-labor import-prohibition commitments under the Agreement on Reciprocal Trade (“ART”) or (ii) have a forced-labor import prohibition in place but do not enforce it effectively.
• 12.5%: All other economies.

USTR also proposed a textile mechanism that would allow a certain volume of apparel and textile imports to enter at a reduced Section 301 rate.⁹ The mechanism is calibrated so that countries that purchase American textile inputs receive tariff relief on their finished goods for export.

A table of the proposed tariff rates follows:

Exclusions: What’s Not Covered

Despite the breadth of economies implicated, USTR’s proposed remedy includes meaningful categorical exclusions:

• Goods identified under Annex A;
• All articles currently subject to Section 232 tariffs;
• Goods of Canada or Mexico that are compliant with the United States-Mexico-Canada Agreement (“USMCA”);
• Textiles and apparel that enter duty-free under the Dominican Republic-Central America Free Trade Agreement (“CAFTA-DR”) from Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, or Nicaragua¹⁰; and
• Informational materials, donations, accompanied baggage.¹¹

Next Steps

The proposed tariff actions are not final. The President retains final decision-making authority on tariff rates and country coverage, and President Trump may depart from USTR’s proposed approach. USTR is actively soliciting public comment on which products should be added to or removed from the tariff scope, whether the Annex A exclusions are appropriately drawn, the rate structure, features of the textile mechanism, and whether ART-commitment countries should be treated differently from countries that have already enacted prohibitions.¹²

Written comments on the proposed action are due July 6, 2026. Requests to appear at the July 7 public hearing at the USITC must be submitted by June 22, 2026.¹³

For importers, we recommend the following:

• Audit Annex A. If a product should be excluded and is not currently on the list, the comment period is the window to make that argument. Companies with significant import exposure should be mapping their HTS classifications against Annex A to assess potential tariff exposure.
• Reassess supply chain risk. Companies sourcing goods that may incorporate forced-labor inputs should review their compliance frameworks in light of USTR’s explicit emphasis on circumvention through third-country processing.¹⁴
• Account for stacking. These tariffs, if finalized, apply on top of any other applicable duties. Companies already managing Section 232 or existing Section 301 China tariffs should review the potential cumulative effect.
• Watch the parallel investigation. USTR’s concurrent Section 301 investigation into structural excess industrial capacity covers 16 economies and could result in additional tariff exposure across a broader range of products.¹⁵

*McKenna Lee is a summer associate in the firm's Washington, D.C. office. 

Footnotes

1. Notice of Determinations and Request for Comments Concerning Actions in Section 301 Investigations of Acts, Policies, and Practices of Various Economies Related to the Failure to Impose and Effectively Enforce a Prohibition on the Importation of Goods Produced with Forced Labor, 91 Fed. Reg. 34,272, 34,272 (June 5, 2026).

2. Office of the U.S. Trade Representative, Acts, Policies, and Practices of Various Economies Related to the Failure to Impose and Effectively Enforce a Prohibition on the Importation of Goods Produced with Forced Labor 1 (June 2, 2026), https://ustr.gov/sites/default/files/files/Press/Releases/2026/USTR%20Report%20Sec%20301%20FL%20301%206-2-26%20FINAL%20for%20upload.pdf.

3. Notice of Determinations, 91 Fed. Reg. at 34,272.

4. Id.

5. Id.; 19 U.S.C. § 2411(b)(1) (2018).

6. 19 U.S.C. § 2411(d)(3)(B)(iii)(III) (2018).

7. 19 U.S.C. § 2411(d)(3)(C)(i) (2018).

8. Id.

9. Id.

10. Id.

11. Id.

12. Notice of Determinations, 91 Fed. Reg. at 34,275–76.

13. Id.

14. Report, supra note 2, at 54.

15. Initiation of Section 301 Investigations: Acts, Policies, and Practices of Certain Economies Relating to Structural Excess Capacity and Production in Manufacturing Sectors, 91 Fed. Reg. 12,886 (Mar. 17, 2026).