Months after the Supreme Court struck down President Trump’s most sweeping global tariffs, the administration said it would levy new tariffs using a different legal mechanism.
On Tuesday, the Office of the U.S. Trade Representative proposed tariffs of at least 10% on more than a dozen countries over alleged failure to address forced labor concerns. Trading partners including the European Union and the U.K. will face 10% tariffs after the U.S. said an investigation found countries haven’t done enough to block imports of goods made from forced labor. Countries including China, Japan and India will face a 12.5% levy on imported goods because the U.S. says they don’t prohibit such imports and haven’t committed to doing so through deals with the administration.
How high are tariffs now?
The Supreme Court’s February ruling striking down the initial wave of Trump’s tariffs brought the average U.S. tariff rate on imports down to 8.2%, from 14.9%, according to the Tax Foundation, a policy research group. That same month, Trump imposed new, temporary 10% tariffs. The move, along with other tariff revisions, increased the average tariff rate to 11.7%.
The administration hasn’t said when the latest tariffs will take effect, although the expectation is for them to kick in once the current 10% tariffs expire in late July.
Meanwhile, tariffs on specific sectors remain in flux. For example, the Trump administration is expected to propose a change to the U.S.-Mexico-Canada Agreement that would increase the amount of U.S. content required in cars in order to qualify for lower tariffs. It also plans to impose tariffs of as much as 100% on certain branded pharmaceuticals.
What law is the Trump administration using?
Section 301 of the 1974 Trade Act allows a president to impose permanent duties as long as his administration can point to unfair trade practices that violate a trade agreement or place a burden on U.S. commerce. Trump used this provision to impose tariffs on China during his first term, accusing the country of harming the U.S. economy through theft of intellectual property and other practices. The Biden administration kept most of those tariffs in place and they remain to this day.
Section 301 is considered more legally durable than Trump’s earlier action to impose tariffs under the International Emergency Economic Powers Act of 1977. The administration has already conducted investigations required to impose the latest Section 301 tariffs it has proposed with a public hearing scheduled for early July.
The Supreme Court in February declared illegal the most sweeping tariffs Trump had imposed in his second term. The court ruled that the president went too far in enacting them, under the Ieepa, without clear authorization from Congress.
Could there be legal challenges?
Trump’s latest use of Section 301 to impose fresh tariffs could face broad legal challenge from numerous importers and is “unlikely to survive judicial review,” Alan Wolff, an attorney and former deputy director-general of the World Trade Organization, argued in a post for the Peterson Institute for International Economics.
That is partly because the 301 statute was written to address the practices of “ ‘a foreign country,’ using the singular,” Wolff wrote. “There is no indication that the Congress meant ‘one or more, or multiple foreign countries,’ to be addressed all at once.” The courts are also likely to see this as “mainly an attempt once again to transfer the full tariff power from the Congress to the president,” in violation of the Constitution, Wolff wrote.
Some U.S. trading partners pushed back on the proposed new tariffs. The EU called the levies unjustified. China said it doesn’t have forced labor and opposes using tariffs “as a pretext for political manipulation.”
What has been the impact of tariffs so far?
Economists say tariffs have helped push up the cost of consumer goods and have made manufacturing in the U.S. more expensive.
Businesses last year largely tried to eat the cost of the tariffs, amid worries that raising prices would scare away their consumers. Earlier this year, however, companies from Levi Strauss & Co. to spice seller McCormick & Co. said they would pass on tariff costs.
Some firms have gotten tariff refunds after the Supreme Court’s decision to strike down Trump’s Ieepa tariffs. Some are planning to pass along the refunds to their customers, while others are using the money to invest in their operations.
While the Iran war and rising energy prices are playing an increasing role in pushing up inflation, tariffs are having an outsize effect on imported items like tomatoes, electronics and clothing, all of which are getting more expensive. A price tracker by Harvard University shows that tariffs have helped push up the price of carpets, coffee, and building materials.
The Tax Foundation estimates that Trump’s tariffs in 2025 amounted to an average tax increase of $1,000 per U.S. household. Not yet accounting for the latest 301 tariffs, duties imposed this year will increase costs by $700, it added.
Write to Jeanne Whalen at Jeanne.Whalen@wsj.com and Chao Deng at chao.deng@wsj.com