The Office of the U.S. Trade Representative is holding a public hearing Tuesday on proposed tariffs targeting 60 countries over allegations of forced-labor practices in their supply chains, the latest step in President Trump’s effort to rebuild his tariff agenda after courts struck down his earlier emergency-powers approach. The proposed duties, ranging from 10 to 12.5 percent, would apply to a broad swath of imports and mark a shift toward a more legally durable tariff strategy under Section 301 of the Trade Act. The hearing arrives as the administration’s existing 10 percent global tariff faces an expiration deadline later this month.
Story Highlights
- USTR is holding a public hearing July 7 on proposed forced-labor tariffs of 10 to 12.5 percent covering 60 trading partners
- The move follows a Supreme Court ruling that Trump lacked authority to impose tariffs under emergency powers
- The administration’s existing Section 122 global tariff is set to expire July 24 unless extended by Congress
What Happened
The Office of the U.S. Trade Representative published a report and opened a public comment period ahead of Tuesday’s hearing on proposed tariffs targeting 60 countries over what officials describe as inadequate enforcement of prohibitions against forced-labor practices in global supply chains. U.S. Trade Representative Jamieson Greer detailed the findings in a lengthy report, concluding that many of the nation’s most significant trading partners had failed to impose or effectively enforce bans on importing goods produced through forced labor. Fifteen countries would face a 10 percent tariff under the proposal, while a larger group of 45 economies, including China, Brazil, Japan and India, would face a steeper 12.5 percent rate.
The action represents the administration’s latest attempt to reconstruct its tariff program after a series of legal setbacks. In February, the Supreme Court ruled that Trump lacked the authority to impose sweeping tariffs under the International Emergency Economic Powers Act, prompting the administration to pivot to a universal 10 percent global surcharge under Section 122 of the Trade Act of 1974. That measure was subsequently challenged in the Court of International Trade, which ruled in May that the administration exceeded its authority, though the decision remains under appeal and the tariffs have continued to be collected in the meantime. The Section 122 authority is set to expire July 24 unless Congress acts to extend it.
Unlike the emergency powers previously invoked, Section 301 investigations, such as the forced-labor probe now nearing completion, carry no statutory limit on the level or duration of resulting tariffs, making them a more durable foundation for the administration’s trade agenda. The USTR is simultaneously investigating more than a dozen countries over allegations of excess manufacturing capacity, a separate Section 301 track that could result in additional tariffs later this year.
The tariff push comes alongside broader trade tensions, including the administration’s decision not to renew the U.S.-Mexico-Canada Agreement by its scheduled deadline, opting instead for a process of annual reviews that could extend for up to a decade. Mexican officials have expressed a willingness to address American concerns about job losses and trade imbalances, but the administration has signaled continued skepticism about reaching a comprehensive new agreement with Ottawa and Mexico City in the near term.
Why It Matters
The shift toward Section 301 as the primary legal vehicle for tariffs reflects a more calculated, litigation-resistant strategy following repeated court defeats. If finalized, the forced-labor tariffs would give the administration a tool likely to survive future legal challenges, since Section 301 authority has a more established judicial track record than the emergency powers previously invoked.
For American businesses, the proposed tariffs create renewed uncertainty over supply chain costs just as many companies were adjusting to the now-invalidated Section 122 surcharge. Firms sourcing from the 45 countries facing the higher 12.5 percent rate, including major manufacturing hubs like China and Japan, will need to reassess import cost structures heading into the fall.
For Congress, the looming July 24 expiration of the Section 122 tariffs raises the stakes over whether lawmakers will act to extend that authority or allow the administration’s pivot to Section 301 to become the primary tariff framework going forward, a decision with significant implications for federal revenue projections tied to trade policy.
Economic and Global Context
Independent analysis estimates that Trump’s combined tariff measures could raise nearly 956 billion dollars in revenue between 2026 and 2035 on a conventional basis, though accounting for negative economic effects on growth reduces that figure to roughly 697 billion dollars. Economists project the tariffs amount to an average tax increase of between 700 and 1,500 dollars per American household in 2026, depending on the calculation method used, and estimate they could reduce long-run U.S. gross domestic product by roughly 0.3 percent before accounting for foreign retaliation.
The average effective tariff rate is expected to reach its highest level since 1972 if the Section 122 surcharge is allowed to lapse and is replaced by the newly proposed Section 301 rates. Despite the scale of the tariffs imposed since 2025, the overall U.S. trade deficit has shifted only modestly, falling by roughly 2.1 billion dollars last year, a change driven mostly by growth in the services trade surplus rather than reduced goods imports.
Internationally, the tariff overhaul has strained relationships with major trading partners. The European Union implemented its own trade agreement with Washington on July 1 after securing final approval from its member states, while Canada and Mexico continue to face 25 percent tariffs on automobiles and 50 percent tariffs on metals amid the unresolved USMCA renewal process.
Implications
For businesses, the coming weeks will bring clarity on final tariff rates once the USTR hearing concludes and the administration issues its determination, likely before the current Section 122 authority lapses later this month. Companies with exposure to the 60 countries named in the forced-labor investigation should prepare for potential cost increases regardless of which legal mechanism ultimately prevails.
For trading partners, particularly the 45 nations facing the steeper 12.5 percent proposed rate, the hearing represents a final opportunity to lobby for exemptions or demonstrate compliance efforts before the tariffs take effect.
For policymakers, the unresolved fate of the USMCA and the looming Section 122 expiration mean trade policy will remain a dominant economic storyline through the remainder of the summer, with direct consequences for consumer prices and manufacturing investment decisions across North America.
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