Investors should brace for another set of import taxes tied to excess-capacity claims, and for more legal battles

A container ship floats off the Port of Los Angeles on July 17.

The Trump administration's trade fights are far from over, even after its big move on Thursday evening to maintain its elevated tariffs for 60 economies.

In rolling out its new set of import taxes of 10% to 12.5% on Thursday, the Office of the U.S. Trade Representative relied on its investigation into forced labor that wrapped up last month and that was conducted through Section 301 of the Trade Act of 1974.

But even more tariffs are expected because the trade office is still working to wrap up a separate Section 301 probe into excess manufacturing capacity. That refers to when countries overproduce and then dump their excess goods into another nation, potentially putting the importer's local manufacturers out of business.

That investigation into overcapacity concerns was announced in March and is targeting 16 economies, including major trading partners like the European Union, China, Mexico, Japan and India. The probe is likely to conclude in the coming weeks, result in tariffs in the range of 10% to 12.5% that stack on top of most existing duties - and likely sparking Chinese retaliation, said Chris Krueger, an analyst and managing director at TD Cowen's Washington Research Group, in a note on Friday.

President Donald Trump and his aides had been expected to announce the forced-labor tariffs this week because an earlier set of levies based on Section 122 of the Trade Act of 1974 were due to expire Friday. Trump in February had turned to Section 122 to impose a 10% global tariff for a maximum of 150 days, with that move coming shortly after the Supreme Court ruled against his use of the International Emergency Economic Powers Act to levy his import taxes.

"While Section 301 tariffs are not permanent and remain subject to review processes and potential legal challenges, they are generally viewed as far more resilient than the framework struck down by the courts earlier this year," said Jim Reid, head of macroeconomic research at Deutsche Bank, in a note on Friday.

"The broader message is that tariffs are increasingly becoming a permanent feature of U.S. economic policy. Recent announcements have included a 25% tariff on many Brazilian goods, threats of further duties on Canadian imports, and the prospect of a 100% tariff on imported generic pharmaceuticals from 2028," Reid added.

A former general counsel for the USTR during the Clinton era, Jennifer Hillman, has agreed that legal challenges could be coming for the forced-labor tariffs.

"I think you'll see a challenge there - that there's just been an overreach and abuse of this particular statute," Hillman, who is now a professor at Georgetown University's law school, told MarketWatch earlier this week. "There's likely to also be a challenge to the underlying investigation - that you didn't actually go in and investigate the forced-labor practices in each one of these countries."

Overall, investors can view this week's tariff maneuvers as a sign that Trump and his aides are still embracing import taxes, even after a Supreme Court loss and as voters remain frustrated about the elevated cost of living.

"For investors, today's story is therefore no longer about whether tariffs survive, but about what comes next," Deutsche Bank's Reid said.

"The focus is likely to shift towards exemptions, country-specific negotiations, sectoral investigations and the risk of additional tariff rounds," he added. "The court rulings appeared to threaten a meaningful rollback of Trump's trade agenda. Instead, the administration has now demonstrated a pathway to reconstruct much of the tariff wall on a firmer legal foundation. The tariff may be dead, but long live the tariff."

-Victor Reklaitis

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July 24, 2026 12:10 ET (16:10 GMT)

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