The Trump administration is building a more permanent tariff architecture to replace the temporary trade barriers that have defined its second-term economic policy. The new approach targets imports from 60 economies using Section 301 of the Trade Act of 1974, anchored to allegations that these countries haven’t done enough to prohibit goods produced with forced labor.
From emergency powers to something sturdier
The Supreme Court invalidated numerous tariffs that had been imposed under emergency powers, specifically the ones rolled out during what the administration dubbed “Liberation Day,” in February 2026. That ruling left a gaping hole in the White House’s trade strategy.
A temporary 10% global tariff imposed under Section 122 has been filling the gap, but it’s set to expire in July 2026.
The administration launched an investigation into forced-labor practices back in March 2026. The US Trade Representative determined that 60 economies had failed to impose and enforce adequate prohibitions against imports produced with forced labor. Public hearings on the matter kicked off on July 7, 2026, with written comments due by July 6.
The proposed tariff rates break down into two tiers. Countries with partial bans on forced-labor goods would face a 10% tariff. Countries with no prohibitions at all would get hit with 12.5%.
The legal chess match
Section 301 allows the US to impose tariffs in response to “unreasonable” or “discriminatory” trade practices by foreign governments. Congress passed the Uyghur Forced Labor Prevention Act in 2021, and customs enforcement around forced labor has been escalating for years. Using it as the legal foundation for broad-based tariffs across 60 economies is a significant expansion of the concept.
What this means for markets and investors
Sectors heavily reliant on imports from the targeted economies, including electronics, manufacturing, and consumer goods, could see margin compression as costs rise. The research context notes that sensitive industries such as electronics and artificial intelligence may see significant advocacy as the policy unfolds.
Higher import costs get passed to consumers, which means inflation data could surprise to the upside in late 2026.