Ever since the start of President Donald Trump’s second term, U.S. importers have had to navigate a series of back-and-forth tariff implementations and reversals, which has instilled a sense of uncertainty in the American mindset. This constant vacillation has even earned the president an unflattering label from his opponents: “TACO” for Trump Always Chickens Out, a vivid term to describe his apparent timid attitude that constantly fuels these reversals.
Contrary to the views of those who hurl TACO insults at him, the president is aiming to mend the gaps the Supreme Court created in his industry-wide and country-specific tariffs, which his administration put in place under the International Emergency Economic Powers Act of 1977 (IEEPA). One of the laws he is using to push his agenda has already proven effective for him in the past. In fact, even President Joe Biden used it.
United States Trade Representative (USTR) Jamieson Greer announced on Wednesday that the Trump Administration is initiating probes targeting China, the EU, Mexico, and more than a dozen other countries, related to “structural excess capacity,” which is the overproduction of goods exceeding global demand, as part of Section 301 of The Trade Act of 1974. Section 301 is one of the tools the president has turned to since the Supreme Court struck down his sweeping tariffs implemented under IEEPA. This law gives the president the power to impose country-specific tariffs on countries the U.S. deems have engaged in unfair labor practices.
There have been more than 130 cases related to this law, setting a strong precedent for its use. After Trump imposed tariffs under this law on China during his first term, Biden in 2024—during the four-year periodic review procedure required by the law—extended the tariffs on China and even increased them on products like electric vehicles and medical materials.
And this law is likely to hold up in a potential legal battle; it definitely has stronger legal basis than the tariffs imposed under IEEPA, a law that had never been used for tariffs before. Tariffs imposed under Section 301 have withstood many legal challenges. In 2023, approximately 3,600 importers challenged the 25% tariffs on hundreds of billions of dollars’ worth of Chinese-origin goods at the Court of International Trade.
“For the plaintiffs, challenging what the administration does here will be much more difficult than the IEEPA case,” Timothy Meyer, an international trade expert and professor at Duke Law School, told .
The regulatory glitches of section 301
But the drawback of Section 301 is its mandatory regulatory period, which is stricter than the almost immediate authority in IEEPA. Since Section 301 is an agency action, the acting USTR must follow the guidelines of the Administrative Procedure Act, a law that regulates the internal procedures of federal agencies, including providing a public comment period that allows importers and other stakeholders to influence and possibly modify the list of targeted products and tariff rates.
These investigations can legally take up to a year. But the administration seems determined to speed up the process, potentially rolling out tariffs before the current short-term 10% tariffs enforced under Section 122 of the 1974 Trade Act expire at the end of July.
Still, Meyer said if the administration successfully follows the procedural requirement associated with Section 301, it could lead to a legally sound case for new tariffs. “I think the administration, if it conducts the investigation well, will be in a fairly good litigating position here,” he said. “But much depends on what the administration does.”
What can importers anticipate?
The potential tariffs associated with Section 301 add another layer of uncertainty to an already volatile trade landscape. “[Importers] are asking many questions,” Blake Harden, who serves as a managing director in Washington, D.C., and helps run EY’s global trade policy practice, told . “They’re trying to understand how quickly this might progress. They’re trying to figure out if they should comment on this.”
There’s also concern that some sectors already under investigation under Section 232, another legal way the president has tried to enforce tariffs, could face a “double-scope” with the addition of a second investigation under Section 301. Moreover, Harden said these investigations could make some countries currently negotiating trade deals with the U.S. proactively add provisions to shield themselves from investigation. Alternatively, she said it could derail current trade talks.
“[Importers] are inquiring, ‘What does this mean for the trade agreement with country X?’ How will this potentially speed up or derail the discussions and negotiations, or cause them to be put on hold?’”