WASHINGTON — After the Supreme Court struck down his preferred import levies in February, President Donald Trump quickly implemented temporary trade taxes as replacements. However, these interim measures will end in under three months.
The current administration is now working urgently to establish more permanent import fees that will continue generating revenue for the federal treasury while maintaining the president’s protective trade barriers around America’s economy.
Beginning this week, the Office of the U.S. Trade Representative will commence hearings for two separate investigations expected to result in additional U.S. import taxes — fees paid by American importers and typically transferred to consumers through increased prices, adding to existing cost-of-living concerns.
While Trump’s latest import tax initiative will likely encounter legal opposition, it appears more legally sound than the version the Supreme Court overturned.
The first hearing, scheduled for Tuesday and Wednesday, will examine whether 60 nations — spanning from Nigeria to Norway and representing 99% of American imports — adequately prevent trade in goods produced through forced labor.
“For too long, American workers and firms have been forced to compete against foreign producers who may have an artificial cost advantage gained from the scourge of forced labor,” U.S. Trade Representative Jamieson Greer stated in March. The administration may impose new import taxes on violating countries.
The following week will feature hearings investigating whether 16 American trading partners — including China, the European Union and Japan — are manufacturing excess goods, reducing prices and disadvantaging U.S. producers. These nations under scrutiny represent 70% of U.S. imports, according to Tax Foundation analyst Erica York. This investigation could also trigger additional import fees.
Most significant economies, including China, the EU and Japan, appear on both investigation lists.
The administration has initiated these cases using Section 301 of the Trade Act of 1974, which permits import taxes and other penalties against nations engaging in “unjustifiable,” “unreasonable” or “discriminatory” trade practices.
Trade Representative Greer, who leads these investigations, has stated he will not predetermine their outcomes.
However, importers and foreign governments question whether the process will be impartial. Treasury Secretary Scott Bessent has already announced the government will replace original tariff income with new import taxes, including Section 301 levies, before investigations conclude. Trump himself has declared that new import fees “are going to get us more money.”
“If you believe the Treasury secretary and the president, then the cake is already baked,” said Scott Lincicome of the libertarian Cato Institute’s Center for Trade Policy Studies. “These investigations will result in tariffs that approximate what the Supreme Court overruled in February.”
On February 20, the Supreme Court determined Trump exceeded his authority by using the 1977 International Emergency Economic Powers Act (IEEPA) to impose substantial import taxes on nearly every global nation. Trump had utilized this act extensively to place taxes on imports. For instance, he threatened new fees on Canada over a Canadian television advertisement criticizing his trade policies.
He leveraged IEEPA tariff threats to pressure major trading partners — including the EU, Japan and South Korea — into accepting unfavorable trade deals. These levies generated significant income — $166 billion — before the Supreme Court ended them, ruling IEEPA couldn’t authorize import taxes. The federal government must now reimburse importers who paid those fees.
Trump had an immediate method to recover some lost income — previously projected at $1.6 trillion over ten years — at least temporarily. Section 122 of the Trade Act of 1974 permits presidents to impose global import taxes up to 15% for 150 days maximum.
The administration acted immediately. Two days following the Supreme Court ruling, it imposed 10% Section 122 import taxes. Trump indicated he would increase these to the 15% maximum but hasn’t.
These temporary measures expire July 24. Congress could extend them, but lawmakers show little interest in approving what essentially amounts to a major tax increase as November’s midterm elections approach, given voters’ existing anger over high prices partly attributable to import taxes.
Section 301 provides another avenue to recreate the protective effects of the rejected IEEPA levies. Section 301 import taxes have no size limitations and last four years with possible extensions.
Most importantly for the Trump administration after its Supreme Court loss, Section 301 import taxes survived legal challenges when the president used them during his first term against China over Beijing’s aggressive policies promoting domestic technology companies.
Future 301 import taxes will certainly face court challenges, but judges may uphold them.
“Even if it is a veiled — or less-than-veiled — attempt to reinitiate the IEEPA tariffs, he still has the cover of the process itself,” explained trade attorney Joyce Adetutu, a partner at Vinson & Elkins law firm.
Critics have highlighted the rapid pace of Trump’s current investigations. Implementing Section 301 import taxes against China during the president’s first term required nearly a year of investigation and public input. If current investigations produce new taxes in time to replace expiring Section 122 levies, the timeline will be less than half as long.
“It’s such a short timeframe,” said Kenya Davis, a partner at Boies Schiller Flexner law firm who has worked pro bono on human trafficking and forced labor issues. “It’s so condensed that it doesn’t make a lot of sense that they can do it that quickly.”
Importers preparing for renewed costly import taxes can find some reassurance knowing Trump’s Section 301 levies likely won’t be as unpredictable as his IEEPA fees, since he must follow established procedures before implementation.
“One of the reasons Trump used IEEPA is because it was just a complete blank slate” — or appeared to be before the Supreme Court ruling, Cato’s Lincicome explained, describing it as “a little tariff switch in the Oval Office that Trump could flip on and off anytime he wants; he wakes up in the morning and he doesn’t like a Canadian television commercial, he flips the switch … You really can’t do that with 301.”
