How Section 301 Tariffs Could Disrupt Retail Supply Chains

Even before the Supreme Court struck down President Trump’s IEEPA-based tariffs, the administration had been exploring other ways to pursue similar trade measures. One of the key tools now being used is known as Section 301.

Section 301 comes from the Trade Act of 1974 and gives the Office of the U.S. Trade Representative broad authority to investigate whether a foreign country’s acts, policies, or practices are unfair and burden or restrict U.S. commerce. The authority is flexible, and if USTR makes an affirmative determination, it can lead to tariffs or other trade actions.

A Section 301 investigation follows these steps:

1. Initiation: Any person – it doesn’t have to be a person inside government – may file a petition requesting an investigation. USTR has 45 days to decide whether it will act.
2. Administration: A committee of trade staff investigates. They review petitions, conduct public hearings, and make recommendations regarding next steps.
3. Consultations: USTR requests consultations with the foreign government being investigated. 
4. Determinations and Implementation: USTR weighs all findings and determines if the alleged conduct is unfair and harms U.S. trade, typically within 12 months of the start of the investigation.
5. Retaliatory Action: Section 301 authorizes USTR to (1) impose tariffs or other import restrictions, (2) withdraw or suspend trade agreement concessions, and (3) enter into a binding agreement with the foreign government to either cease the conduct in question or compensate the U.S. USTR is required to prioritize tariffs if it opts for import restrictions. At this stage, USTR must seek public comments on proposed actions.
6. Subsequent Actions: Section 301 requires monitoring, modifying, and terminating actions. Foreign noncompliance is considered a violation of a trade agreement and subject to mandatory action. Section 301 actions terminate after four years, barring certain exceptions such as a request for continuation and review. 

USTR is now pursuing several Section 301 investigations. In March, Ambassador Jamieson Greer announced investigations related to structural excess capacity and production in manufacturing sectors involving 16 trading partners: China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India. The following day, USTR initiated 60 additional Section 301 investigations (listed here) related to whether trading partners have failed to impose and effectively enforce prohibitions on the importation of goods produced with forced labor.

There were already Section 301 tariffs on the books before these new investigations began. The most prominent are the China Section 301 tariffs first imposed in 2018.  

For retailers, Section 301 investigations can be difficult to plan around. The authority gives the administration broad discretion, and the investigations are conducted largely within the executive branch. While there are opportunities for public comments and hearings, businesses often have limited visibility into what specific benchmarks USTR is using or what outcome an investigation may produce.

The result is significant uncertainty for retailers and other businesses with global supply chains. A Section 301 investigation may not lead to tariffs, but it can. When tariffs are imposed, they can take effect without a vote of Congress, apply across broad categories of goods, and remain in place for years before another review is required.

That unpredictability matters. Retailers make sourcing, pricing, inventory, and supply chain decisions months or even years in advance. When new tariffs are possible across dozens of markets and product categories, businesses face difficult planning decisions with limited information. Higher import costs can affect contracts, product availability, consumer prices, and the ability of retailers to maintain stable supply chains.