Three days of testimony in Washington close out the public phase of a plan to place new duties on 60 economies covering 99.4 percent of United States imports
WASHINGTON, July 9, 2026
The Office of the United States Trade Representative concluded three days of public hearings Thursday on its proposal to impose additional tariffs of 10 percent to 12.5 percent on goods from 60 economies that together account for 99.4 percent of all merchandise entering the United States, capping a week in which importers, foreign governments, domestic producers and labor advocates battled over the shape of what would rank among the broadest tariff actions in modern American history.
The hearings, held before the Section 301 Committee at the US International Trade Commission from July 7 through July 9, represent the final public step before USTR decides whether to adopt, modify or abandon the proposed duties. The agency determined in early June that every one of the 60 investigated economies had failed to “impose and effectively enforce a forced labor import prohibition,” a finding that under Section 301 of the Trade Act of 1974 opens the door to retaliatory tariffs even where no violation of international law has occurred.
The stakes extend far beyond the forced labor question itself. White House officials have made clear that they intend to use the forced labor investigations, along with other pending Section 301 cases, to restore import taxes to the levels that prevailed under President Trump’s emergency tariffs, which the Supreme Court ruled illegal in February, Bloomberg News reported. In the meantime, a temporary 10 percent global tariff imposed under Section 122 of the Trade Act remains in place, and it expires on July 24 unless Congress extends it.
That deadline gives this week’s proceedings unusual urgency. Trade lawyers widely expect the administration to have the new Section 301 duties finalized and ready to take effect by the time the Section 122 levies lapse, leaving little more than two weeks between the close of testimony and a decision that will reshape the cost structure of nearly every import transaction in the country.
From Emergency Powers to Section 301
The path to this week’s hearings began with a courtroom defeat. In February, the Supreme Court struck down the administration’s use of the International Emergency Economic Powers Act, or IEEPA, as the legal basis for its sweeping global tariffs. The ruling invalidated the centerpiece of the White House trade program and forced officials to hunt for firmer statutory ground.
The administration’s immediate answer was Section 122 of the Trade Act of 1974, a balance-of-payments authority that permits temporary import surcharges of up to 15 percent. Officials used it to impose a 10 percent global tariff, but the statute carries a hard limit: the surcharge can last only 150 days unless Congress votes to extend it. That clock runs out on July 24, 2026.
The longer-term answer arrived on March 12, when USTR self-initiated Section 301 investigations into 60 of the largest US trading partners, examining whether each had failed to prohibit and police the importation of goods made with forced labor. Section 301(b) authorizes the trade representative to act against foreign practices that are “unreasonable or discriminatory” and that burden US commerce, and the statute explicitly lists tolerance of “any form of forced or compulsory labor” as an example of unreasonable conduct. Attorneys at Sheppard Mullin, who had predicted a year earlier that the administration would respond to an IEEPA loss by “Section 301’ing the world,” noted that the strategy has now effectively come to pass.
The choice of statute matters because Section 301 is viewed as far more legally durable than the emergency powers the Supreme Court rejected. The law has been used for decades, most prominently in the China tariffs of the first Trump administration, and a Supreme Court decision in June that left Section 301 tariffs undisturbed has only strengthened the administration’s confidence in the tool.
On June 2, USTR announced affirmative determinations in all 60 investigations. The agency reached its conclusions after receiving more than 450 written submissions, hearing from nearly 60 witnesses during an earlier round of testimony, and conducting confidential government-to-government consultations with 46 of the 60 economies under review. The result was uniform: every investigated economy failed on adoption of a forced labor import ban, on enforcement, or on both.
What USTR Is Proposing
The proposed remedy comes in two tiers. Economies that have made forced-labor import-prohibition commitments under the administration’s Agreements on Reciprocal Trade, or that already maintain an import prohibition but do not enforce it effectively, would face an additional 10 percent duty. That group of 15 trading partners includes the European Union, Canada, Mexico, the United Kingdom, Taiwan, Indonesia, Pakistan and Ecuador. All other economies, a group of 45 that includes China, Japan, India, South Korea, Vietnam, Brazil, Australia and Switzerland, would face 12.5 percent.
USTR has also proposed a textile mechanism that would allow a defined volume of apparel and textile imports to enter at a reduced Section 301 rate. The mechanism is calibrated so that countries purchasing American textile inputs, such as US-grown cotton and US-spun yarn, receive tariff relief on the finished goods they ship back to the United States, an explicit attempt to knit foreign supply chains to domestic producers.
The proposal contains meaningful carve-outs. Goods identified in Annex A of the Federal Register notice would be excluded, as would all articles already subject to Section 232 national security tariffs, which currently cover steel, aluminum and copper. Goods from Canada and Mexico that comply with the United States-Mexico-Canada Agreement would be exempt, as would textiles and apparel entering duty-free under the CAFTA-DR agreement from Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua. Informational materials, donations and accompanied baggage round out the exclusion list.
Critically, the new duties would stack on top of any other applicable tariffs rather than replace them. An importer already paying Section 301 China duties, for example, would add the new forced labor rate to its existing burden. And the proposal is not the administration’s last word: President Trump retains final authority over rates and country coverage, and he may depart from USTR’s recommended approach in either direction.
Three Days of Testimony
The hearing schedule read like a cross-section of the American economy. Day one opened with a panel of foreign government officials, led by Mexico’s Ernesto Acevedo Fernandez, who testified on how Mexico’s USMCA Forced Labor Mechanism enforces its import prohibition. Diplomats and trade officials from Chile, Ecuador, Guatemala, Guyana, Honduras and Peru followed, each pressing the case that their governments should not face new duties.
Domestic producers took the opposite side of the ledger. The American Line Pipe Producers Association and the Steel Manufacturers Association testified in favor of the duties, arguing that a flood of imported steel mill and steel-containing products has been driven in part by low labor standards abroad and the absence of import bans on forced labor goods in competitor markets.
The American Petroleum Institute pushed in the other direction, asking USTR to drop duties on industrial inputs critical to oil and gas operations. The lobby group said those inputs have no link to forced labor and “simply cannot be sourced domestically either at all, or in sufficient quantities, by the industry responsible for meeting the Trump administration’s aim of U.S. energy dominance,” according to Bloomberg News.
Day two belonged largely to seafood, with the National Fisheries Institute, the Chilean salmon industry and domestic shrimp and catfish producers all appearing, alongside government representatives from India, Jordan and Pakistan. Pakistan’s representative argued that USTR’s recommendation is “disproportionate given the absence of evidence of forced labor in Pakistani export goods and Pakistan’s enactment of an import prohibition.”
Human rights organizations added another dimension. China Labor Watch told the committee that “any preferential tariff treatment, including the proposed textile mechanism or similar sector-specific mechanisms, should apply only to products that can be credibly and independently verified to be free from forced labor,” a warning that relief valves in the tariff structure could become loopholes for the very goods the action is meant to keep out.
The final day brought the Footwear Distributors and Retailers of America, the National Council of Textile Organizations and the American Cotton Producers to the same panel, followed by government witnesses from South Korea, Sri Lanka, South Africa and Vietnam. Vietnam’s representative disputed the finding that the country “has failed to impose and effectively enforce measures addressing goods associated with forced labor.” A closing session gathered the American Trailer Manufacturers Coalition, the Cigar Association of America, medical device makers and the cookware brand Le Creuset.
Le Creuset’s filing illustrated the dilemma facing premium import brands. The company employs nearly 800 people in the United States despite manufacturing nothing domestically, and it told USTR that its enameled cast iron cookware “presents no risk to American manufacturing due to the fact that there is no comparable domestic production of such premium enameled cast iron cookware to satisfy the demand.”
Running in parallel, USTR held a separate hearing this week on its Section 301 investigation of Brazil, where the agency has proposed a 25 percent tariff on most Brazilian products. Flavio Bolsonaro, the Brazilian senator and son of former President Jair Bolsonaro, was slated to testify on July 7 and urged the administration not to impose new tariffs before Brazil’s October election or to target Pix, the country’s popular instant-payment system. “The proposed tariffs would reward the very offenders they are meant to punish,” Bolsonaro wrote in his filing, arguing the measures would boost President Luiz Inacio Lula da Silva, whose popularity rose after he cast earlier US pressure as an attack on Brazilian sovereignty.
The Hundred Billion Dollar Question
The sharpest critique of the entire enterprise came from Ed Gresser, a former USTR official who now serves as vice president and director for trade and global markets at the Progressive Policy Institute. In prepared testimony shared with Bloomberg News, Gresser argued that the forced labor investigations betray the intended purpose of Section 301.
“Senior administration officials have described their purpose as not to address unreasonable ‘acts, policies, and practices’ burdening U.S. commerce, but to re-create the tariff rates set under last year’s illegal ‘IEEPA’ decrees,” Gresser said. He contended that USTR’s report proves neither that the listed economies import goods made with forced labor nor that their practices impose any burden on American commerce, and that the recommended tariffs, which he estimated at roughly 100 billion dollars a year in new costs for Americans, “are inappropriate and ought not to stand.”
Gresser’s argument goes to the legal heart of the action. Section 301 requires a finding that foreign practices burden or restrict US commerce. If the true purpose of the investigations is to reconstruct a tariff schedule the courts already struck down, challengers will argue the statutory findings are pretextual. That line of attack is likely to surface quickly in litigation if the duties are finalized, though the administration’s June win at the Supreme Court on Section 301 authority suggests the courts may be reluctant to second-guess the trade representative’s determinations.
Seafood Sounds the Alarm
Few industries put harder numbers on the table than seafood. Robert DeHaan of the National Fisheries Institute told the committee that the combination of a 12.5 percent tariff on 15 billion dollars in annual finfish and shellfish imports and a 10 percent tariff on another 9.3 billion dollars in annual seafood imports “would result in $2.86 billion in annual tariff liability for US seafood companies,” according to Undercurrent News, which reported that USTR got an earful from the sector on July 8.
The seafood fight also exposed how the proposal scrambles ordinary alliances. Chile’s salmon industry, facing the higher 12.5 percent tier, argued against duties on a product the United States cannot supply in sufficient volume. Domestic shrimp and catfish producers, by contrast, appeared before the same committee seeking stronger protection from imports, and the Coalition for Fair Trade in Seafood went further, calling for an even higher rate on seafood from Vietnam, whose processing industry the group described as particularly vulnerable to forced and child labor.
The new duties would land on a sector already paying heavily. US shrimp importers alone paid 312.7 million dollars in tariffs during the first four months of 2026, according to Undercurrent News trade data, and import volumes have fallen for nine consecutive months as costs work their way through the supply chain to restaurant menus and grocery shelves.
Economic Impact: Stacking, Sourcing and Sticker Shock
Economists reviewing the proposal have focused less on the headline rates, which are modest by the standards of last year’s emergency tariffs, than on their breadth and their interaction with existing duties. Because the forced labor tariffs would apply on top of current tariff schedules, the effective rate on many products would be substantially higher than 10 or 12.5 percent. A Chinese-origin good already subject to legacy Section 301 duties, for instance, could carry three separate layers of tariffs, while steel and aluminum articles remain under separate Section 232 rates of up to 50 percent.
The near-universal coverage is what distinguishes this action from every previous use of the statute. Prior Section 301 actions targeted single countries or specific practices. This one reaches 60 economies at once, including close allies such as Japan, South Korea, Australia, Norway and Switzerland, all of which face the higher 12.5 percent tier. Gresser’s estimate of roughly 100 billion dollars a year in new import costs implies a measurable contribution to consumer price inflation at a moment when tariff pass-through is already visible in categories from groceries to electronics.
The two-tier structure also creates a new diplomatic currency. The 10 percent tier is populated largely by governments that signed forced labor commitments under the administration’s Agreements on Reciprocal Trade, which gives every 12.5 percent country an obvious path to a lower rate: negotiate. Trade economists note that this design converts a labor rights instrument into ongoing leverage for the administration’s bilateral dealmaking, much as the threat of reciprocal tariffs did in 2025.
For foreign exporters, the calculus varies sharply by sector. USMCA-compliant goods from Canada and Mexico escape the duties entirely, deepening the cost advantage of North American sourcing. CAFTA-DR textile producers keep duty-free access, positioning Central America as a hedge for apparel buyers. Asian exporters outside any preferential arrangement absorb the full 12.5 percent, on top of whatever reciprocal or product-specific rates already apply to their goods.
Smaller importers may feel the squeeze most acutely. Large multinationals maintain trade compliance departments capable of remapping supply chains and pursuing exclusions, but the small and mid-sized businesses that make up the bulk of US importers of record typically lack the resources to shift sourcing on two weeks’ notice. Customs brokers report that many of their clients only learned of the proposed duties when the June determinations made headlines, and that cash flow planning for a new 10 to 12.5 percent line item on nearly every entry has become the dominant topic of client conversations this summer.
What Importers and Exporters Should Do Now
Trade counsel are urging importers to treat the coming weeks as their last real window to shape the outcome. Written comments closed on July 6, but the record remains open for post-hearing rebuttal submissions, and lawyers at Sheppard Mullin recommend that companies audit the proposed Annex A exclusion list against their own harmonized tariff schedule classifications, arguing that the comment process is the moment to make the case for products that should be excluded but are not.
The same advisors point to three other priorities. First, supply chain compliance: USTR’s report placed explicit emphasis on circumvention through third-country processing, meaning importers whose goods incorporate inputs from high-risk regions should expect more aggressive enforcement regardless of where final assembly occurs. Second, tariff stacking: companies already managing Section 232 or China-specific duties need to model the cumulative effect rather than the marginal rate. Third, the parallel track: USTR is simultaneously running a Section 301 investigation into structural excess industrial capacity covering 16 economies, which could add yet another layer of duties across a broad range of manufactured products.
For US exporters, the risk is retaliation. Several governments testifying this week hinted that new duties would not go unanswered, and the European Union, which only weeks ago implemented a trade deal removing its tariffs on US industrial goods, would face domestic pressure to respond if its 10 percent rate is finalized. Agricultural exporters, the perennial first target of retaliatory lists, are watching the proceedings with particular unease.
There is also a genuine policy debate beneath the politics. Labor advocates have long complained that the United States stands nearly alone in operating a meaningful forced labor import ban, enforced by Customs and Border Protection through withhold release orders and the Uyghur Forced Labor Prevention Act, while goods rejected at American ports simply divert to markets with no equivalent barrier. Supporters of the new tariffs argue that pressuring 60 governments to adopt and enforce their own prohibitions could close that gap in a way years of diplomacy never did. Skeptics respond that a flat duty on all goods from a country, regardless of any connection to forced labor, is a blunt instrument that punishes clean supply chains and tainted ones alike.
The Road to July 24
USTR now moves to deliberation. The agency may modify the proposed action, finalize it as drafted, or decline to adopt it, and the president retains the last word. The hearings were on the record but not livestreamed; full transcripts will be posted to the USTR website in the coming days, giving the public its first complete view of testimony that unfolded over three days at 500 E Street SW.
The practical deadline remains the expiration of the Section 122 global tariff on July 24. If the administration allows a gap between the old authority and the new one, importers would enjoy a brief window of lower duties, an outcome officials have signaled they intend to avoid. Most observers therefore expect a final determination within two weeks, with duties potentially effective the moment the temporary tariff lapses.
Whatever the final shape of the action, this week marked a turning point in how the United States wields tariff power. An authority written five decades ago to counter discrete unfair trade practices is being deployed against nearly the entire world at once, justified by a labor rights standard that no major trading partner was found to meet. The hearing room emptied Thursday afternoon, but for the businesses that move 3 trillion dollars in goods into the United States each year, the hard part is just beginning.