WASHINGTON — Less than three months before temporary import taxes are set to expire, the Trump administration is actively pursuing new, more durable tariffs to replace those previously rejected by the Supreme Court and to maintain revenue streams for the U.S. Treasury. These efforts aim to bolster the president’s protectionist economic policies.
New Investigations to Drive Tariff Policy
The Office of the U.S. Trade Representative has initiated hearings this week as part of two investigations expected to pave the way for a fresh wave of U.S. tariffs. These taxes are paid by importers and typically result in increased prices for consumers, who are already grappling with high living costs.
The first investigation, underway Tuesday and Wednesday, scrutinizes whether 60 economies, representing 99% of U.S. imports, are adequately prohibiting the trade of products made with forced labor. U.S. Trade Representative Jamieson Greer stated in March, “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.” Non-compliant nations could face new tariffs.
Following this, the administration will hold hearings next week concerning 16 major U.S. trading partners, including China, the European Union, and Japan. The focus will be on whether these countries are overproducing goods, thereby depressing prices and disadvantaging U.S. manufacturers. These investigated economies account for 70% of U.S. imports, according to Erica York of the Tax Foundation. Most of these major economies are included in both investigations.
These probes are being conducted under Section 301 of the Trade Act of 1974, which grants the president authority to impose tariffs and other sanctions against countries engaging in “unjustifiable,” “unreasonable,” or “discriminatory” trade practices.
Legal Doubts and Precedent
While U.S. Trade Representative Greer has stated he will not prejudge the outcomes, importers and foreign nations express skepticism about the fairness of the process. This doubt stems from pronouncements by Treasury Secretary Scott Bessent and President Trump himself, who have indicated that new import taxes are intended to compensate for the revenue lost from the invalidated tariffs.
“If you believe the Treasury secretary and the president, then the cake is already baked,” commented Scott Lincicome of the libertarian Cato Institute’s Center for Trade Policy Studies. “These investigations will result in tariffs that approximate what the Supreme Court overruled in February.”
On February 20, the Supreme Court ruled that President Trump had exceeded his authority by using the 1977 International Emergency Economic Powers Act (IEEPA) to implement broad tariffs. Trump had utilized IEEPA to impose tariffs on imports from nearly every country, sometimes as a retaliatory measure, such as a proposed tariff on Canada following a critical television advertisement about his trade policies.
The threat of IEEPA tariffs was also used to pressure major trading partners like the EU, Japan, and South Korea into accepting trade agreements perceived as unfavorable. These tariffs generated substantial revenue, totaling $166 billion, before the Supreme Court’s decision, which mandated refunds to importers who had paid them. The projected revenue loss over the next decade was estimated at $1.6 trillion.
Temporary Measures and Future Prospects
To mitigate the immediate revenue shortfall, the administration quickly implemented temporary global tariffs under Section 122 of the Trade Act of 1974, which allows for tariffs up to 15% for a maximum of 150 days. Two days after the Supreme Court ruling, a 10% tariff was imposed on imports.
These Section 122 tariffs are scheduled to expire on July 24. While Congress could extend them, lawmakers are reportedly hesitant to approve significant tax increases so close to the November midterm elections, given voter concerns about inflation.
Section 301 offers a more enduring path to replicate the impact of the IEEPA tariffs. Unlike the temporary Section 122 tariffs, Section 301 tariffs have no statutory limit on their size and can be extended beyond their initial four-year duration. Crucially, Section 301 tariffs have a history of withstanding legal challenges, notably when used against China during Trump’s first term to address Beijing’s trade practices.
Any new tariffs imposed under Section 301 are expected to face legal scrutiny. However, legal experts suggest they may prove more resilient than the IEEPA tariffs. “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,’’ noted trade lawyer Joyce Adetutu.
Critics have raised concerns about the accelerated timeline of the current investigations. The process for imposing Section 301 tariffs on China in the previous term took nearly a year. The speed at which the current investigations are proceeding, potentially allowing for new tariffs to replace the expiring Section 122 levies, has drawn attention. “It’s such a short timeframe,’’ said Kenya Davis, a partner at the law firm Boies Schiller Flexner. “It’s so condensed that it doesn’t make a lot of sense that they can do it that quickly.”
For importers, the prospect of new Section 301 tariffs suggests a more structured and less arbitrary approach compared to the IEEPA levies. “One of the reasons Trump used IEEPA is because it was just a complete blank slate,’’ explained Cato’s Lincicome, contrasting it with the procedural requirements of Section 301, which limit the president’s ability to impose tariffs whimsically.
