Observers say the Donald Trump administration's declaration that it will impose at least a 10% additional tariff on 60 countries, including Korea, over the issue of imports produced with forced labor is effectively an attempt to revive the reciprocal tariff—stalled by a court ruling—under a different legal basis.
The Office of the United States Trade Representative (USTR) announced on the 2nd the results of its investigation under Section 301 of the Trade Act into "imports produced with forced labor" from 60 countries including Korea, saying, "They have imposed import bans on goods produced with forced labor but failed to enforce them effectively," and proposed an additional tariff of 10%–12.5%. Korea, along with Japan and the United Kingdom, was assigned a 12.5% tariff rate.
In February, after a federal court ruled the reciprocal tariff unlawful, the Trump administration imposed a 10% "global tariff" on trading partners worldwide based on Section 122 of the Trade Act. However, that tariff was set to expire in late next month because its duration is capped at 150 days. The Trump administration is seen as seeking to fill that gap by introducing a new form of tariff using the latest Section 301 findings.
The move was seen as somewhat anticipated. Since March, the USTR has been conducting investigations into imports of forced-labor products and overproduction issues under Section 301 of the Trade Act, which allows responses to discriminatory trade practices by foreign governments. Last month, after a court found global tariffs under the International Emergency Economic Powers Act (IEEPA) unlawful, President Trump also hinted that Section 301 could be used as an alternative.
Foreign media assessed that the Trump administration is invoking the forced-labor issue as a pretext to maintain the tariff regime. The Washington Post (WP) reported, "The Trump administration has taken a key step to rebuild tariff barriers around the U.S. economy," adding, "The new forced-labor tariff is only part of the administration's long-term tariff strategy."
Analysts say the latest tariff action based on Section 301 of the Trade Act is less likely to face legal challenges than before. During the first Trump administration, the same legal authority was used to impose tariffs on Chinese products. Former President Ronald Reagan and President Joe Biden also implemented sanctions against trading partners based on Section 301 of the Trade Act.
Ryan Majerus, a partner at the law firm King & Spalding who served at the USTR during Trump's first term, said, "The administration has formidable authority under Section 301. In effect, the administration acts as judge, jury, and enforcer," adding, "This action, targeting forced labor and excessive exports, is receiving bipartisan support."
Even if the tariff is again checked by the courts, the prevailing view is that the Trump administration will maintain its tariff policy in some fashion. Simon Evenett, a professor of geopolitics and strategy at the International Institute for Management Development (IMD) in Switzerland, told The New York Times (NYT), "The forced-labor tariff shows the administration is rebuilding tariff barriers through case-by-case investigations."
Steve Okun, CEO of the geopolitical consulting firm APAC Advisors, also said, "After the court put the brakes on tariffs based on IEEPA, the Trump administration needed a new legal basis to rebuild tariff barriers," adding, "This move was a convenient means to achieve that goal." He went on to predict, "Under the Trump administration, tariffs will remain in place."
The move has again thrown U.S. trading partners into confusion. Countries had pledged, through negotiations with the United States, to reduce or eliminate tariffs on U.S. products in exchange for maintaining certain tariff rates. But with new tariffs added, questions are being raised about the viability of existing agreements. The Wall Street Journal (WSJ) reported, "The latest tariffs have created new uncertainty over the future direction of U.S. tariff policy."