Section 301: Trump's New Tactic to Impose Tariffs Again — India Has Faced It Before
- Jun 3
- 3 min read
By Pranjal Gupta
New Delhi, June 3: After the US Supreme Court invalidated Donald Trump's global tariffs in February, the President returned with another round of additional duties on commodities entering America from 60 trade partners. An official statement from the Office of the US Trade Representative (USTR) stated that a list of countries, including India, used forced labour to manufacture goods imported by America, warranting action. Since prohibiting imports outright under Section 301 of the US Trade Act of 1974 could mount excessive pressure on American workers, the US decided to impose a rate new tax.
Under this law, the US investigates unfair foreign acts, policies, or practices affecting US commerce. "Section 301 may be used to respond to unjustifiable, unreasonable, or discriminatory foreign government acts, policies, or practices that burden or restrict US commerce. Under Section 302(b) of the Trade Act, the Trade Representative may self-initiate an investigation under Section 301," the official statement read.
Some Countries to Face 12.5% Tariff, Others Only 10%
Per findings from the investigation conducted by the Trump administration, 54 countries lack a proper law banning forced-labour imports. Because no such law exists, goods produced through forced labour continue entering American markets via trade - and these countries will consequently face a 12.5% tariff.
Meanwhile, some countries do have such laws but fail to enforce them. The US argues that their border control, policing, or legal systems are doing a poor job of actually stopping those goods in practice.
Countries facing 12.5% tariffs: Algeria, Angola, Argentina, Australia, the Bahamas, Bahrain, Bangladesh, Brazil, Cambodia, Chile, China, Colombia, Costa Rica, the Dominican Republic, Egypt, El Salvador, Guatemala, Guyana, Honduras, Hong Kong, India, Iraq, Israel, Japan, Jordan, Kazakhstan, Kuwait, Libya, Malaysia, Morocco, New Zealand, Nicaragua, Nigeria, Norway, Oman, Peru, the Philippines, Qatar, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Sri Lanka, Switzerland, Taiwan, Thailand, Trinidad and Tobago, Türkiye, the United Arab Emirates, the United Kingdom, Uruguay, Venezuela, and Vietnam.
Countries facing 10% tariffs: Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan.
India Has Faced Same Law Before
In 2021, the Biden administration threatened a 25% tariff on Indian imports after a Section 301 investigation alleged that India's Digital Services Tax (DST) was unreasonable, discriminatory, and harmful to US commerce. However, the Biden administration immediately suspended these tariffs for 180 days to allow time for international tax negotiations.
The friction originated when India imposed a 2% tax — effective April 2020 — on earnings generated within the country by foreign technology and e-commerce companies such as Amazon, Facebook, and Google.
India Pushes Back
The Ministry of Commerce and Industry clarified on Wednesday (June 3) that the latest US tariffs have not yet been imposed, and that India remains engaged in ongoing talks with US officials on the matter.
This comes at a crucial juncture, as a USTR delegation led by Assistant USTR Brendan Lynch is visiting India for negotiations on the proposed India–US Bilateral Trade Agreement (BTA). According to US Ambassador to India Sergio Gor, the two nations have been working on the BTA for over a year and a half, with the deal said to be 99% complete.
Those negotiations are now heavily shadowed by the simultaneous Section 301 investigations, which propose to impose fresh tariffs on India.
