Will There Be Further Adjustments to the Section 301 Forced Labor Tariffs If Forced Labor Laws Improve?
On Thursday, USTR announced its final tariff rates in the Section 301 investigation on forced labor imports. There are a wide range of ideas for how to challenge these tariffs in court, with some ideas broader than others. One broad approach would be to argue that these tariffs are just a recreation of the IEEPA tariffs, with the forced labor justification merely a pretext, and therefore these tariffs exceed the authority granted under Section 301. You can see this argument in a lawsuit filed on Friday by the Liberty Justice Center ("the purported rationale of addressing forced labor is simply a pretext for tariffs").
There are also narrower possible challenges, such as an argument that focuses on the actions taken by affected governments to address the specific unfair trade practices at issue here. If a government were to improve its laws/enforcement related to imports made with forced labor, it could argue that its tariff should be lowered. In this context, note that as USTR moved from proposed to final tariff rates in the investigation, a handful of countries got a slightly lower tariff, falling from 12.5% to 10%, on the basis of actions taken along these lines. As the Presidential memorandum released by the White House states:
... the Trade Representative has informed me that following consultation with certain economies in these investigations and publication of the Notice of Determinations, additional economies have imposed forced labor import prohibitions (Cambodia, Guatemala, Honduras, India, Sri Lanka, and Trinidad and Tobago) or undertaken commitments regarding forced labor import prohibitions in an Agreement on Reciprocal Trade (Jordan). As a result of these actions, the Trade Representative has advised me that the goods of these economies should be tariffed at the 10 percent rate to further encourage these economies to effectively enforce such prohibitions, and, in the case of Jordan, to enact and effectively enforce its commitments regarding forced labor import prohibitions.
Similarly, USTR's Federal Register notice explains:
Following government-to-government consultations pursuant to Section 303 of the Trade Act and the publication of proposed actions in the June 5, 2026 FRN, additional economies have imposed forced labor import prohibitions—Cambodia, Guatemala, Honduras, India, Sri Lanka, and Trinidad and Tobago; or undertaken commitments regarding forced labor import prohibitions in an ART—Jordan.
So the precedent exists: By addressing the unfair trade practices at issue, a government can get a lower tariff rate.
But will that precedent continue to be followed now that the final rates are set? My sense is that some governments will keep going with their efforts to improve their laws dealing with imports made with forced labor, either because they think it's a good idea or to try to satisfy U.S. demands. After they do so, presumably they will go to USTR (or President Trump directly) and ask for tariff relief. Will they get it?
The argument against an adjustment happening is that Section 301 does not provide any process for adjustments, so USTR doesn't have to do anything. The statute gives USTR lots of discretion, and the courts are likely to recognize this and stay out of USTR's business. As a result, the Trump administration – whose actual goal here is to impose a broad set of tariffs on worldwide imports – won't take any action to lower the tariffs.
The argument for an adjustment happening is that it's just plain common sense to make this adjustment, and maintaining the tariffs after the unfair trade practice has been eliminated would be arbitrary and capricious (to put it in Administrative Procedure Act terms). You can't impose a Section 301 remedy on unfair trade practices that no longer exist. And as the Presidential memorandum states, removing the unfair trade practices is the only purpose here: "Each tariff action directed in this memorandum is only for the purpose of obtaining the elimination of the specific economy’s act, policy, or practice found actionable under section 301 and not for any other purpose." If that purpose has been satisfied through elimination of the unfair trade practice, the tariff action no longer serves a purpose. Furthermore, the absence of an adjustment process spelled out in Section 301 shouldn't prevent USTR from making adjustments when it is reasonable to do so, and the courts won't let USTR get away with avoiding adjustments if that is the Trump administration's plan.
So how is this all going to play out? To find out, we'll need to have some government move ahead with its reforms, and then look for ways to make the case to the Trump administration that it has made improvements to its forced labor import laws or the enforcement thereof. And then, well, anyone's guess is probably as good as mine as to what happens next. I am more bullish on the argument for the courts stepping in to force USTR to change the rates than some people I've talked to are, but I don't have great confidence in any particular outcome here. If someone would ask Trump administration officials what their plan is in these circumstances, that could help shed a bit of light on the situation.