Trump's New Trade Strategy: Section 301 Becomes Primary Tool for Tariffs

US President Donald Trump is undergoing a significant shift in his trade enforcement strategy following a pivotal ruling by the US Supreme Court. The court has curtailed the President's ability to use the International Emergency Economic Powers Act (IEEPA) to unilaterally impose heavy tariffs overnight. In response, the Trump administration is now focusing on Section 301 of the Trade Act of 1974 as its primary mechanism for trade protectionism. This shift moves the administration away from sudden executive mandates toward a more structured, albeit lengthy, legal and investigative process.

Supreme Court Ruling and the Curb on IEEPA

For years, the IEEPA served as a potent tool for the Trump administration, allowing for the immediate imposition of tariffs ranging from 10% to 50% on imports from various nations. This was often used not just for economic reasons but as a form of diplomatic use. However, the Supreme Court's recent intervention has restricted these 'arbitrary' powers. Michael Froman, President of the Council on Foreign Relations, noted that the President can no longer work with tariffs solely for personal or political retaliation. The ruling effectively closes the door on using emergency powers for what critics termed 'political blackmail' against trade partners.

Section 122: The 150-Day Temporary Measure

To maintain pressure on global trade partners while navigating the new legal landscape, the Trump administration has invoked Section 122 of the 1974 Trade Act. Under this provision, Trump signed an executive order imposing a 10% global duty. Section 122 allows the President to impose tariffs of up to 15% for a maximum of 150 days without a prior lengthy investigation. US Treasury Secretary Scott Bessent described this as a temporary bridge. The goal is to keep trade partners under pressure while the government conducts the more rigorous and legally defensible investigations required under other sections of the trade law.

Section 301: The New Tool Against Unfair Trade

Section 301 has emerged as the cornerstone of Trump's revised trade strategy. ' Jamieson Greer, the US Trade Representative (USTR), has indicated that his team is preparing to launch new investigations into several major trading partners. These probes will focus on issues such as pharmaceutical pricing, industrial overcapacity, forced labor, and discrimination against US tech firms. While investigations into China and Brazil are already underway, nations like Vietnam and Canada are expected to come under scrutiny soon.

The Requirement for Formal Legal Investigations

Unlike the immediate nature of IEEPA, Section 301 requires a formal and transparent investigative process. The administration must gather evidence, establish a legal basis, and invite public comments before any permanent tariffs can be enacted. This process typically takes up to a year to complete. Consequently, the administration can no longer impose tariffs on Mexico or Canada overnight based on non-trade issues like fentanyl trafficking, while every tariff decision must now be backed by a solid commercial and legal justification, providing a degree of predictability and transparency for international markets.

Section 232 and National Security Interests

In addition to Section 301, the administration continues to use Section 232 of the Trade Expansion Act of 1962. This provision allows for tariffs based on national security concerns. Currently, it's being applied to sectors such as automobiles, auto parts, heavy trucks, copper, and wood products like furniture. However, Section 232 is generally applied globally rather than targeting specific countries. Because of this, for targeted actions against individual nations, Section 301 remains the administration's most effective 'Brahmastra,' now bound by the discipline of a formal legal framework.