Trump launches Section 301 probe into forced labor in 60 countries including South Korea, China, and Japan

[The Financial News] The Trump administration in the United States of America (US) has launched a large-scale trade investigation targeting major trading partners, including South Korea, China, and Japan, over imports of goods produced with forced labor. The move is seen as part of efforts to craft new tariff measures to replace reciprocal tariffs that were invalidated by the Supreme Court of the United States (SCOTUS).
The Office of the United States Trade Representative (USTR) announced on the 12th (local time) that it has initiated a Section 301 of the Trade Act of 1974 investigation into imports of goods produced with forced labor, covering 60 economic entities. The list includes South Korea, China, and Japan, as well as the European Union (EU), the United Kingdom (UK), Canada, Australia, India, the Kingdom of Saudi Arabia (KSA), Switzerland, Vietnam, and most of the US’s other major trading partners.
In a statement posted on its website, USTR explained, "This investigation is intended to determine whether the policies and practices related to the failure of foreign governments to effectively impose and enforce prohibitions on the importation of goods produced with forced labor are unreasonable or discriminatory, and whether such acts burden or restrict US commerce."
Jamieson Greer of USTR stated, "Despite international consensus against forced labor, foreign governments have failed to prohibit the entry of goods produced with forced labor into their markets and to enforce such bans effectively." He argued, "As a result, US workers and businesses have been forced to compete with foreign producers that gain an artificial cost advantage through the whip of forced labor."
Greer went on to say, "This investigation will assess whether foreign governments have taken sufficient measures to block imports of goods produced with forced labor, and how these practices have affected US workers and businesses."
According to the Federal Register notice, USTR will accept written comments and requests to appear at a public hearing until the 15th of next month. It then plans to hold a Section 301 of the Trade Act of 1974 committee hearing starting on April 28, and, if necessary, continuing through May 1. Rebuttal comments will be accepted for seven days after the final day of the hearing. Once these procedures are completed, USTR is expected to decide on response measures, which could include the imposition of tariffs, based on the investigation’s findings.
This investigation is being conducted as part of efforts to design new tariff measures following last month’s Supreme Court of the United States ruling that struck down country-specific reciprocal tariffs and the so-called "fentanyl tariffs" imposed under the International Emergency Economic Powers Act (IEEPA). Section 301 of the Trade Act of 1974 provides the legal basis for the administration to take response measures, such as imposing tariffs, against unfair, unreasonable, or discriminatory foreign government policies and practices that restrict or burden US trade.
Separately, USTR the previous day also launched another Section 301 of the Trade Act of 1974 investigation targeting overcapacity issues in 16 economic entities, including South Korea, China, and Japan. As a result, the Trump administration is now pursuing two parallel Section 301 investigations—one on "overcapacity" and another on "imports of goods produced with forced labor"—to build the case for introducing new tariffs.
At present, following the Supreme Court of the United States ruling that invalidated reciprocal tariffs, the Trump administration has been imposing a 10% "global tariff" on all trading partners worldwide since the 24th of the same month, based on Section 122 of the Trade Act of 1974. However, this measure can remain in place for a maximum of only 150 days, meaning a new tariff regime must be in place before late July.
Market observers widely expect the Trump administration to use the findings of the Section 301 of the Trade Act of 1974 investigations into overcapacity and forced labor as the basis for a new tariff framework to replace the current global tariff. Some analysts also interpret these moves as part of a broader effort by the US to build new tools for trade pressure in the wake of the ruling that struck down reciprocal tariffs.

km@fnnews.com Reporter Kim Kyung-min Reporter