“Section 301,” a trade statute drafted in 1974, authorizes presidents to use tariffs as negotiating leverage to solve specific trade policy problems, after demonstrating that the government of a relevant country is implementing unreasonable “acts, policies, or practices” that impose a “burden on U.S. commerce.”Secretary of the Treasury Scott Bessent announced that the Trump administration would use this law, along with “Section 232,” to restore the International Emergency Economic Powers Act tariff rates the Supreme Court struck down that month.
Five months later, the Trump administration’s Executive Order uses Section 301 to impose tariffs of 10% on goods from 6 U.S. trading partners (Canada, Ecuador, the European Union, Indonesia, Pakistan, and the U.K.) and of 12.5% on goods from another 54, from Australia, New Zealand and Japan to Chile, Colombia, Mexico, China, South Africa, and Bangladesh. Together, these countries are the source of about $3.3 trillion in goods, roughly 97% of the consumer goods, groceries, industrial inputs, and raw materials American families and businesses buy from abroad. Based on the $82 billion raised by last year’s 10% “IEEPA” global tariff, imposed on April 9, 2025, and in place until the Supreme Court’s decision in February, the action is likely to cost Americans roughly $100 billion a year.
The administration’s argument for this action is a claim that (a) the countries on its list are importing goods made with the use of forced labor, and using them to produce other goods competing with American products, and (b) this imposes a “burden” on U.S. commerce by unnaturally reducing the prices of their goods. Gresser’s July 2026 testimony, given before the U.S. Trade Representative Office’s “301 Committee,” rebuts both claims, arguing that the action fails on Constitutional grounds, and also fails to meet Section 301’s evidentiary standards:
- Secretary Bessent’s comment demonstrates that this action, along with the accompanying Section 301 investigation of “structural excess capacity” in manufacturing in 16 economies, is simply meant to replace the illegal IEEPA Executive Orders of 2025 and impose a general tariff increase, rather than to address a forced-labor policy question through policy reform. Section 301 does not authorize general tariff increases, as the Constitution reserves this to Congress by assigning power over “Taxes, Duties, Imposts, and Excises” to Congress in Article I. The Executive Order is therefore an impermissible breach of the separation of powers.
- The U.S. Trade Representative Office’s Report of June 2 recommending these tariffs fails to demonstrate that any of the countries it names are importing forced labor goods. Rather, it simply notes that there is some forced labor trade in the world, and that the listed countries must therefore be buying some. In some cases — for example, Spanish breweries’ imports of Burmese rice for malt liquor — it accuses the countries of buying goods Americans also buy. This cannot justify tariff imposition.
- USTR’s Report also fails to demonstrate that, if any of the listed countries are in fact buying forced labor goods, this would impose a “burden” on U.S. commerce. It argues that “in general”, forced labor enterprises would produce goods at lower costs than honorable and law-abiding businesses. This may well be true in some cases, but as Gresser’s testimony points out, the largest recent U.S. forced-labor enterprise – “Rojas Avila Harvesting,” a labor contractor active in Georgia onion and blueberry picking, 24 of whose executives and associates have pleaded guilty to human trafficking, forced labor, and other crimes — operated for years without affecting the prices of goods. Only empirical data and analysis could demonstrate the price effects USTR assumes to be a general pattern, and its report offers none.
- Outside the bounds of this particular action, the Trump administration has shown little interest in forced labor. To the contrary, it has sharply scaled back U.S. government efforts to eliminate forced labor, canceling all U.S. support for forced labor elimination overseas through DOGE last year and reducing the number of Labor Department inspectors to fight it at home.
