Differential Forced Labour Tariffs by the US Can Be Challenged by Courts
Section 301 of the US Trade Act of 1974 was created to address specific unfair trade practices of trade partners that harm US commerce.
Chennai: Differential tariffs by the US on 60 countries under Section 301 of US Trade Act for forced labour are likely to face legal challenges, find experts. Earlier, reciprocal tariffs and punitive tariffs imposed by the US administration also were struck down by the US judiciary.
The tariff has been imposed on the imports from 60 economies, of which 17 economies, including India, Canada, the United Kingdom, Bangladesh and Pakistan, will face a 10% tariff, while the remaining 43 economies will be subject to a 12.5% tariff.
Section 301 of the US Trade Act of 1974 was created to address specific unfair trade practices of trade partners that harm US commerce. Tariffs imposed under Section 301 are expected to reflect the violation and be applied consistently across countries, finds GTRI.
However, the U.S. Trade Representative's (USTR) forced-labour determinations issued on July 23, 2026 suggest that the Trump administration is using Section 301 to preserve recent trade agreements and advance broader trade policy goals.
Countries now face different tariff treatment depending on whether they signed a trade agreement with the United States in the past two years. That departure from the traditional use of Section 301 is likely to face legal challenges.
The court ruling on reciprocal tariffs eliminated the basic premise on which the US administration negotiated the trade deals with several economies, including India.
The Section 301 tariffs largely have the same approach. Although the USTR found the European Union, Japan, South Korea, Taiwan and Switzerland to have failed to adequately address forced labour, it still granted them preferential treatment.
The EU and Taiwan now face a combined MFN plus Section 301 tariff ceiling of 10%, while Japan, South Korea and Switzerland face a 12.5% ceiling. Products with MFN tariffs below those levels pay only enough Section 301 duty to reach the ceiling, while products already at or above the ceiling pay no additional Section 301 duty.
India, which has not signed a trade deal yet, will pay the normal US MFN tariff plus the full 10% Section 301 duty, while EU exports pay only enough Section 301 duty to bring the total tariff to 10%.
