The Trump administration is reportedly preparing a new tariff plan that could cover approximately 60 trading partners. A key shift is that this policy would primarily rely on a specific legal statute, moving away from the previous reliance on "national emergency" declarations, in an effort to reduce the legal risk of another court injunction.

According to reports, U.S. Trade Representative Jamison Greer stated in a media interview that the administration is expected to use Section 301 of the Trade Act of 1974 to impose tariffs of 10% to 12.5% on 60 countries and regions, citing allegations of "forced labor."

Significance of the Policy Shift

This development signals a move in U.S. trade policy away from dependence on presidential emergency powers and towards the use of traditional trade law instruments. In February, the U.S. Supreme Court ruled that the broad tariffs previously implemented by the Trump administration under the International Emergency Economic Powers Act (IEEPA) lacked a legal basis. Subsequently, the White House pivoted to using Section 122 of the Trade Act of 1974 to introduce a 10% global tariff, a measure set to expire on July 24. Now, the administration aims to rebuild a tariff framework using Section 301 of the same act, which is considered to have a more solid legal foundation.

Latest Developments

According to sources, two government officials familiar with the matter indicated that the U.S. government may use Section 301 to impose tariffs of 10% to 12.5% on 60 countries, justifying the move by citing alleged "forced labor practices."

Trade Representative Greer told media that "some action is expected soon," but did not provide a specific timeline. He noted that the U.S. has laws prohibiting trade in goods linked to forced labor, while most other countries either lack such laws or do not enforce them. He emphasized that the proposed tariffs would cover "about 99% of trade."

The 10% tariff rate would apply to imports from trade partners such as Canada, the European Union, Mexico, Taiwan (China), and the United Kingdom, which are deemed to have taken measures to address forced labor concerns. However, goods from over 40 other major economies, including China, India, and Japan, would face a higher tariff rate of 12.5%.

Greer also indicated that the administration does not rule out invoking Section 122 authority again as a transitional measure.

Potential Implications

U.S. trade partners face renewed uncertainty. With the investigation potentially covering around 60 economies, major U.S. trading partners could once again confront the risk of uniform tariff increases. Although the proposed rates are lower than some previous "reciprocal tariff" proposals, the coverage remains extensive.

Tariff measures under Section 301 possess a stronger legal foundation. Removing these tariffs would pose political risks for the government, suggesting they could remain in place for a prolonged period. As noted by a trade policy expert, it would be considerably more difficult for a future administration to revoke such tariffs.

This new round of tariffs is "certain to face legal challenges and could be overturned," according to a trade reporter. However, even if overturned, the process could take several months.

What Comes Next?

The coming days represent a critical window. Whether the new measures face fresh legal challenges, and whether major U.S. trade partners implement retaliatory measures, will determine how long this tariff policy ultimately lasts and will influence the future global trade landscape.

While the potential new tariffs would match the current 10% rate already in effect, the U.S. government is also conducting other investigations that could grant it the legal authority to propose even higher tariffs.

Recent announcements by former President Trump regarding new unilateral tariff measures targeting Canada and Brazil indicate his administration continues to view tariffs as a core trade policy tool. This could also heighten uncertainty in the ongoing negotiations related to the U.S.-Mexico-Canada Agreement, which Trump has expressed a desire to exit, potentially widening the rift with Canada.

Related Measures

On a separate note, an announcement stated that imported generic drugs will face progressively increasing tariffs starting in 2028, marking the first time the generic drug industry has been brought into the scope of trade taxes. According to the announcement, all generic drugs imported into the U.S. will continue to enjoy zero tariffs until August 1, 2026. Following that, tariffs will be raised to 100% over one year, and subsequently increased further to 200%.