The Trump administration’s 10% universal tariff, imposed on all nations in February, will expire at midnight on July 24 (local time). To replace it, the administration is advancing plans to impose a “forced labor tariff” of up to 12.5% on 60 countries, including Japan, under Section 301 of the Trade Act.
The expiring measure was a 150-day temporary tariff under Section 122 of the Trade Act. After the Supreme Court invalidated reciprocal tariffs and fentanyl-related tariffs based on the International Emergency Economic Powers Act (IEEPA), the Trump administration swiftly introduced this temporary tariff citing balance-of-payments issues.
The U.S. Trade Representative (USTR) is now in the final stages of transitioning the tariff’s legal basis to Section 301 of the Trade Act, which allows for responses to unfair trade practices. In June, the USTR released a draft proposal to impose additional tariffs of 10% or 12.5% on 60 countries and regions — including South Korea, Japan, and China — citing insufficient measures to block imports of goods manufactured with forced labor.
The first country targeted was Brazil. On July 15 (local time), the USTR announced a 25% Section 301 tariff on Brazil effective July 22. The cited justifications included Brazilian court orders requiring X (formerly Twitter), Meta, and Google to remove certain political content, ethanol tariffs, illegal deforestation, and corruption issues. According to the Brazilian government, the affected exports to the U.S. total approximately $7.4 billion (roughly 11 trillion won). President Luiz Inácio Lula da Silva has strongly protested the move and hinted at retaliatory measures.
Japan was classified in the USTR’s original draft as subject to the 12.5% tariff, primarily because the Japanese government has not introduced import bans on forced-labor products. In contrast, 14 countries and regions — including the European Union, Indonesia, and Mexico, which already enforce embargoes, as well as Argentina and Cambodia, which have specified forced-labor countermeasures in trade agreements with the Trump administration — were placed in the relatively lower 10% tariff category.
USTR Representative Jamieson Greer has indicated a willingness to honor trade agreements concluded with Japan, the EU, and others. Japan had previously agreed with the U.S. during reciprocal tariff negotiations to cap its total tariff burden — combining additional and existing tariffs — at 15%, raising the possibility that some relief measures may be applied going forward.
Taiwan was classified among the 14 countries proposed for the lower 10% rate in the Section 301 tariff draft. Taiwan had previously signed the U.S.-Taiwan Agreement on Reciprocal Trade (ART) with the United States, and the U.S. side recognized the commitments under ART, qualifying Taiwan for the 10% rate. The list of 14 countries also includes Canada, Mexico, and the United Kingdom.
South Korea is also on the 60-country list but has secured an agreement capping its tariff ceiling at 15% in exchange for pledging approximately $350 billion (roughly 520.6 trillion won) in U.S. investment last year. Trade experts assess that it is unlikely South Korea will face a tariff rate higher than this under the Section 301 investigation.
Beyond the forced-labor tariff, the Trump administration is separately pursuing Section 301 investigations targeting overcapacity and U.S. trade surplus issues. These investigations cover 16 countries and regions, including South Korea, Japan, China, and the EU, with additional probes into non-tariff barriers in the digital services sector also planned.
As the tariff transition approaches, backlash from the international community and U.S. domestic industries is intensifying. At a USTR public hearing held from July 7 to 9, the Australian government argued that any measure under Section 301 would be unjustified, while the Swiss government pointed to a lack of evidence that its policies have adversely affected the United States. U.S. companies, particularly in materials and retail, are also voicing concerns over surging procurement costs.
Meanwhile, refund claims filed with U.S. Customs authorities for tariffs invalidated by the Supreme Court ruling had surpassed $121.7 billion (approximately 181 trillion won) as of July 10. The total amount of invalidated tariffs originally reached $166 billion (roughly 246.9 trillion won).
Section 301 of the Trade Act, enacted in 1974, served as a core tool for sanctioning China during Trump’s first term and has withstood numerous legal challenges, earning a reputation for strong legal stability. However, once imposed, its structure makes frequent rate adjustments — like those seen with reciprocal tariffs — difficult. Experts assess that if targeted companies pursue additional litigation, tariff policy could remain a major variable in U.S. economic management throughout Trump’s presidency.