Trump Trade 2.0: Section 301 and 232 Investigations and Tariff Relief, US-China Board of Trade, and IEEPA Refund Challenge

Proposed 301 Tariffs and Opportunity for Relief

On June 2, USTR released its conclusions from its Section 301 investigations into forced labor policies across 60 of the largest U.S. trading partners, determining that all 60 either lack full prohibitions on imports of goods made with forced labor or fail to effectively enforce their bans. USTR recommended a tariff rate of 10% for fourteen countries that have an existing forced labor import prohibition or have committed to one through an agreement with the US. This includes: the EU, Canada, Mexico, the UK, Argentina, El Salvador, Guatemala, Indonesia, Malaysia, and Taiwan among others. The remaining 46 economies, including China, Japan, South Korea, India, Brazil, Australia, Vietnam, Switzerland, Israel, and Saudi Arabia, would face 12.5%.

Of the 60 investigated economies, USTR found that only six maintain what it considers a forced labor import prohibition: Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan. But in each case, USTR determined that enforcement has been absent or negligible.

The proposed tariffs also include broad exclusions listed under Annex A of the Federal Register notice. Specific product categories including certain agricultural products, pharmaceuticals, chemicals, minerals, civil aircraft components, semiconductors, and metals are excluded from the proposed tariffs. Additionally, USTR clarified that the new proposed 301 tariffs do not stack on top of Section 232 tariffs and do not apply to USMCA qualified products.

USTR has opened a public comment period. Requests to appear at the hearing are due by June 22, written comments by July 6, and USTR will convene public hearings beginning July 7. Post-hearing rebuttal comments are due five days after the hearing concludes. Michael Best Strategies’ trade team is supporting clients’ strategy and engagement through the public comment and hearing processes.

The forced labor investigation is one of two Section 301 probes the administration launched in March after the Supreme Court struck down President Trump's IEEPA-based tariff regime in February. The second, targeting structural excess capacity in 16 countries including China, the EU, Japan, India, South Korea, and Mexico, remains pending following public hearings held May 5 through 8. Together, the two investigations are widely understood as the administration's primary vehicle for rebuilding durable tariff authority. Unlike Section 122, Section 301 carries no statutory rate cap and no built-in expiration, making it a potentially permanent tariff framework.

The announcement drew sharp international reaction. A European Commission spokesman called the tariffs "unjustified," while Bernd Lange, chair of the European Parliament's trade committee, wrote on X that "accusing the EU of all places of insufficient action against forced labor is absurd." China's commerce ministry said Beijing opposes "all forms of unilateral restrictions" and urged Washington and Beijing to "meet each other halfway." Legal observers have also raised questions about the action's durability; Georgetown and George Mason University law professors have argued that applying blanket tariffs on virtually all imports from 60 economies based on forced labor findings, when the vast majority of covered goods have no connection to forced labor, may face challenges similar to those that brought down the IEEPA tariffs. 

Section 301 Investigation on Brazil

USTR also proposed a 25% tariff on Brazilian imports following a separate 301 investigation. USTR identified six issues that led to their proposed tariffs: suppression of U.S. social media platforms and discriminatory treatment of U.S. electronic services; preferential treatment for Mexican and Indian imports; weak anti-corruption and intellectual property enforcement; barriers to U.S. ethanol exports; and failure to curb illegal deforestation.

Agricultural products, rare earth metals, aircraft equipment, and goods already subject to Section 232 tariffs would be exempt from the proposed tariffs. These categories cover approximately half of total U.S. imports from Brazil.

USTR Greer stated that, “We continue to have substantial differences in resolving the issues identified in this investigation.” However, USTR will continue to engage with Brazil with a statutory deadline of July 15 for the U.S. government to determine whether or not to implement these proposed tariffs. Public comments are due July 1, with a hearing scheduled for July 6.

Section 301 Investigation on Vietnam

On May 29, USTR initiated a separate Section 301 investigation into Vietnam's intellectual property protection and enforcement practices. The investigation follows Vietnam's designation as a "Priority Foreign Country" in USTR's 2026 Special 301 Report. USTR identifies five categories of practices: failure to combat online piracy, insufficient enforcement against counterfeiting, weak border enforcement, lack of enforcement against unlicensed software use, and absence of criminal measures against cable and satellite signal theft.

Appearing before the Senate, USTR Greer stated that "IP infringement in Vietnam continues to impair the competitive position of U.S. innovators and creators.". The U.S. and Vietnam reached a framework agreement in October 2025, but USTR stated that Vietnam has not made meaningful progress on IP issues through those negotiations

USTR must make a determination on whether the practices are actionable within six months, with a possible three-month extension. If the practices are found actionable, USTR could propose implementing new tariffs on Vietnamese imports. Written public comments are due July 2.

Section 232 Steel and Aluminum Tariffs Updated

On June 1, 2026, President Trump issued a proclamation modifying the Section 232 tariff regimes on steel, aluminum, copper, and derivative products. The action preserves the April 2026 tiered tariff framework—50% on primary metal articles, 25% on most derivative products, and a temporary 15% rate for select downstream equipment—while introducing targeted adjustments effective June 8, 2026 through December 31, 2027.

The proclamation expands the scope of products eligible for reduced tariff treatment by broadening Annex III (15% category) to include agricultural equipment, certain residential HVAC systems and components, and other industrial machinery.

Under Annex I-C, the 25% tariff on certain mobile industrial equipment may be reduced to a maximum combined 15% (or lower) for qualifying countries (Argentina, Ecuador, El Salvador, Guatemala, Japan, the Republic of Korea, Liechtenstein, Switzerland, Taiwan, the United Kingdom, or the European Union) and products. It further lowers the U.S.-origin metal content threshold required for preferential treatment from 95% to 85%, thereby expanding eligibility for the existing 10% tariff rate for products made predominantly with U.S. metal inputs. For USMCA-origin goods from Canada and Mexico, the 25% tariff continues to apply only to non‑U.S. content, but the proclamation maintains a minimum effective tariff rate of 15%.

In addition, the proclamation expands tariff coverage by adding new derivative products—such as steel racks and aluminum lithographic plates—to the 25% category.

These temporary adjustments are intended to provide targeted relief to downstream manufacturing sectors while maintaining the broader Section 232 protective framework.

USTR Calls for Information on US-China Board of Trade

On June 2, USTR announced that it will be seeking public comments on the scope and operation of a new U.S.-China Board of Trade. The Board of Trade, agreed to by President Trump and Chinese President Xi Jinping during their May summit in Beijing, is a proposed government-to-government mechanism designed to manage bilateral trade on an ongoing basis by identifying non-sensitive products eligible for mutual tariff modifications. USTR identifies the Board of Trade as a mechanism to promote reciprocity, durability, and balance in the trade relationship. The notice asks stakeholders to identify Chinese products that pose minimal economic and national security risks and could return to lower most-favored-nation tariff rates. USTR is also seeking input on U.S. exports to China currently subject to retaliatory tariffs, including agricultural goods.

U.S. and Chinese officials have indicated that approximately $30 billion worth of goods on each side could initially be considered for tariff relief under the mechanism. USTR Greer signaled that the Board represents a shift in the Administration's approach to Beijing, noting the U.S. has "come to terms with the fact that there's not going to be some giant comprehensive reform of the way the Chinese political system works, including all these economic elements of it, but we can have some managed trade."

Written comments are due July 10, with rebuttals accepted through July 27. See the Federal Register notice here and request for comments here.

Government Challenge to IEEPA Refund Order

A significant legal dispute has emerged over IEEPA tariff refunds for "finally liquidated" entries, those more than 90 days past liquidation.

On May 27, the CIT issued a show cause order lifting the suspension of the April 17 universal injunction. The original injunction had directed CBP to refund IEEPA duties on all entries regardless of liquidation status.

On May 29, DOJ filed a motion stating that it will appeal the universal injunction to the U.S. Court of Appeals. DOJ argued that CBP lacks statutory authority to reliquidate finally liquidated entries without an importer-specific court order, and that the CIT's injunction amounts to an unlawful universal injunction extending relief to importers who have not filed suit. On June 2, DOJ formally filed the appeal with the Federal Circuit.

Refunds for entries processed through CAPE Phase 1 are not affected by the appeal. The dispute centers on whether importers with finally liquidated entries who have not independently filed suit at the CIT will need to do so to obtain refunds. If the government's position prevails, those importers would need to bring individual court actions rather than relying on the universal refund process.

For further legal information, please see the Michael Best update on the matter here.

The Michael Best legal and government relations teams are well-positioned to assist companies in navigating the tariff and trade policy, the CBP refund process, and CIT litigation. Please contact Sarah Helton (sarah.helton@michaelbest.com) or Jeffrey Dunn (jsdunn@michaelbest.com) if you are interested.