US government launches new probes into trade practices under Trump
The US Trade Representative has opened a sweeping new front in the country’s trade war, launching Section 301 investigations into 76 economies over forced labor imports and excess industrial capacity. The move follows a February 2026 Supreme Court ruling that struck down broad tariffs imposed under the International Emergency Economic Powers Act, forcing the administration to find a different legal toolkit.
A patchwork strategy with real teeth
In March 2026, the USTR initiated 60 separate investigations into countries that have failed to ban imports produced through forced labor. A parallel batch of 16 investigations targets economies with structural excess industrial capacity, a list that includes China, India, the European Union, and Japan.
Section 301 gives the USTR authority to investigate and retaliate against foreign trade practices deemed “unreasonable” or discriminatory toward US commerce. It’s the same statute that underpinned the original Trump-era tariffs on Chinese goods back in 2018 and 2019.
By June 2026, the USTR had proposed tariffs of 10% on some economies and 12.5% on others based on their forced labor practices. Those final actions took effect on July 23, 2026. Brazil got singled out for a steeper 25% tariff on specific goods, effective July 22, 2026, addressing a mix of trade grievances beyond just forced labor.
Why Section 301, and why now
The timing traces directly back to the Supreme Court’s February 2026 decision, which invalidated the sweeping tariffs that had been imposed under IEEPA. The statute requires a more structured process: public hearings, comment periods, and formal consultations with affected parties before tariffs can be imposed. That process played out through the spring and early summer of 2026.
What the tariffs mean for markets
The forced labor angle adds a moral dimension that makes it politically difficult for targeted countries to push back too aggressively. The Brazil-specific 25% tariff suggests the administration is also willing to tailor its approach, applying higher rates where it identifies more severe or varied trade violations.
The original Section 301 tariffs on China in 2018 sparked a tit-for-tat escalation that rattled equity markets for over a year. With 76 economies now in the crosshairs instead of one, the potential for cascading trade conflicts is considerably higher.