Trump imposed reciprocal tariffs on global trading partners in 2025 under the International Emergency Economic Powers Act (IEEPA). However, in February 2026, the U.S. Supreme Court ruled 6–3 that the IEEPA does not authorize the president to impose tariffs. Trump subsequently invoked Section 122 of the Trade Act to levy a 10% tariff globally, but the U.S. Court of International Trade ruled the action unlawful in May 2026. Although the case remains under appeal, Section 122 authority expires on July 24. As a result, the Trump administration is now using Section 301 to establish a new long-term tariff framework.

U.S. Proposes New 10%–12.5% Tariffs Under Section 301

On June 2, 2026, the Office of the United States Trade Representative (USTR) announced the results of its forced labor investigation covering 60 economies and proposed tariff actions.

Under the proposal, an additional ad valorem tariff of 10% or 12.5% would be imposed on nearly all goods imported into the United States from these economies, covering more than 99.4% of U.S. imports.

Among the 60 economies under investigation, the proposed tariff rates are divided into two categories:

• 10% Additional Tariff: Applicable to 14 economies that have partially implemented forced labor-related import bans, committed to establishing relevant systems, or already have partial enforcement frameworks in place: Canada, Mexico, the European Union, the United Kingdom, Taiwan, Malaysia, Indonesia, Bangladesh, Cambodia, Argentina, Guatemala, El Salvador, Ecuador, and Pakistan.
• 12.5% Additional Tariff: Applicable to all remaining economies that USTR believes have not established and effectively enforced forced labor import restrictions, including: China, Japan, South Korea, India, Australia, Brazil, Switzerland, Vietnam, and others.

Section 301 Exemption List

Products Covered by Section 232 Measures, and Products That Could Affect U.S. Prices, Supply Chains, or Strategic Industries

1. Goods and components already subject to Section 232 tariffs.
2. Canadian and Mexican goods that qualify under the United States-Mexico-Canada Agreement (USMCA) rules.
3. Certain textile and apparel products eligible for duty-free treatment under the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR).
4. Products where tariff increases could cause domestic supply shortages, economic disruption, or where sufficient U.S. production or substitutes are unavailable:
   • Food and Agricultural Products: Beef, tropical fruits, coffee, tea, spices, cocoa, selected processed foods, and fruit juices.
   • Energy and Fuel Products: Crude oil, refined petroleum products, jet fuel, natural gas, LNG, LPG, and petroleum byproducts.
   • Critical Raw Materials and Industrial Inputs: Critical minerals, metal ores, rare earth elements, lithium compounds, chemical feedstocks, fertilizers, natural rubber, and plastic resins.
   • Medical, Pharmaceutical, and Public Health Products: Antibiotics, vaccines, blood products, immunological products, cell therapies, insulin, diagnostic reagents, and pharmaceutical products.
   • Semiconductor, Computer, and ICT Supply Chains: Semiconductor manufacturing equipment, wafer and display panel manufacturing equipment, integrated circuits, processors, memory chips, and certain computer and communications equipment.
   • Civil Aviation and Specific Machinery Components: Civil aircraft, aircraft engines, related parts, flight simulators, and machinery, electronic, and measurement components identified as aircraft-related.
5. Textile Tariff-Rate Quota Mechanism: Certain economies would be allowed to export textile and apparel products to the United States at reduced tariff rates within specified quotas. The lower-tariff quota allocations would be linked to purchases of U.S. textile inputs, cotton, and cotton products. However, details regarding eligible countries, tariff rates, and quota calculations have not yet been announced.

Final Measures to Be Determined After Public Hearings

The Section 301 tariffs announced on June 2 remain at the proposal stage and have not yet been formally implemented.

According to USTR, interested parties may submit requests to appear at the hearing and provide testimony summaries by June 22. Written comments are due by July 6, and a public hearing will be held on July 7. Rebuttal comments may be submitted within five days after the hearing concludes.

USTR will then review written submissions, hearing testimony, and related records before deciding whether to revise the proposal and issue final measures. If finalized, enforcement will be carried out by U.S. Customs and Border Protection (CBP).

Because the temporary tariffs imposed under Section 122 expire on July 24, markets generally expect the proposed Section 301 tariffs based on forced labor concerns to become one of the primary replacement tools after Section 122 expires.

Analyst Commentary

The New Tariffs Would Have Only a Modest Impact on the Overall Tariff Rate and Primarily Serve as a Continuation of Existing Tariffs

According to Bloomberg Economics, if the new tariffs are implemented, the U.S. effective tariff rate would rise from the current 10.7% to 11.2%. This suggests that the primary purpose of the new tariffs is to replace and extend the tariffs currently imposed under Section 122.

For economies subject to the additional 10% tariff, the proposal would largely represent a continuation of the existing tariff framework, resulting in limited incremental impact. However, products subject to the 12.5% tariff rate and not included in the exemption list could face more significant pressure.

Industries Subject to the 12.5% Rate Without Exemptions Could Face Greater Impact

Products originating from economies subject to the 12.5% tariff rate—such as China, Vietnam, India, Japan, and South Korea—and not included on the exemption list would face more direct cost pressures.

Products likely to be most affected include furniture, toys, household goods, selected consumer electronics, non-exempt machinery components, and general plastic or metal manufactured products. By contrast, energy products, medical goods, semiconductors, critical minerals, and certain food products are included in the exemption list and therefore face relatively limited direct impact.

In addition, USTR did not fully exempt textile and apparel products. Instead, it proposed a reduced-tariff quota system, meaning textile-exporting countries may still face tariff pressure. In particular, major apparel exporters such as India and Vietnam do not qualify under CAFTA-DR and have not yet received preferential tariff treatment. As a result, export costs to the United States could rise. This may become an important negotiating tool for the U.S. government, as exporting countries seeking lower tariff burdens may need to increase purchases of U.S. cotton, cotton products, or textile inputs.

Meanwhile, Canadian and Mexican goods that comply with USMCA rules are excluded from the proposed tariffs, providing relative protection for North American supply chains. This not only reduces the direct tariff impact on Canadian and Mexican products but may also increase incentives for companies to relocate portions of their supply chains to North America. Furthermore, as USMCA enters a joint review process, these exemptions could become an additional tool in future negotiations and policy discussions.

Conclusion: Section 301 Is Likely to Serve as a Long-Term Successor to Section 122

Overall, although the proposed Section 301 tariffs cover a broad range of products, the exemption list excludes food, energy, pharmaceuticals, critical minerals, semiconductors, and aviation components. This indicates that the U.S. government does not want tariffs to directly increase energy, healthcare, or everyday consumer costs.

The proposal also reflects heightened sensitivity to inflation and consumer expenses amid midterm election pressures facing the Trump administration.

Looking ahead, additional Section 301 investigations may emerge as alternative or successor tools once Section 122 expires.

While the Section 301 process is more time-consuming—requiring investigations, public notices, comment periods, and hearings—its legal foundation is generally clearer once finalized, and its policy durability is stronger. As a result, Section 301 may become a more sustainable mechanism for Trump to continue his tariff agenda and strengthen the United States' negotiating leverage in trade discussions.