Can Section 301 effectively replace IEEPA? That is the $166 billion question
Since the Supreme Court struck down the tariffs implemented under the International Emergency Economic Powers Act (IEEPA) in February, the Trump administration has not backed down from its high tariff ambitions. Instead, it is looking to reconstruct the tariff wall through a sweeping expansion of investigations under Section 301 of the Trade Act of 1974—covering sixty economies and targeting forced labor and structural excess capacity.
While that effort is underway, the administration has enacted a 10 percent surcharge on all imports into the US under Section 122 of the Trade Act of 1974. Yet this provision only provides temporary authority and is set to expire on July 24 unless reauthorized by Congress.
On June 2, the Office of the US Trade Representative (USTR) announced proposed rates from the forced labor 301 investigation, and the rest are expected within days. This first round of remedies gives us insight into how the administration plans to build a new tariff regime. Drawing on what we know, we have modeled the potential new 301 architecture to show how much revenue the government can hope for. Our first estimate is that a Section 301-based regime could generate up to $169 billion, assuming 2025 import levels.
What will happen to IEEPA-era deals?
In the proposed remedies, USTR distinguishes between countries with a forced labor prohibition and economies that have undertaken commitments in their respective agreements regarding forced labor import prohibition. From this, we can glean that the administration values the IEEPA-era deals—but figuring out how it intends to carry them forward remains a challenge.
Specifically, USTR names Canada, Ecuador, the European Union (EU), Indonesia, Mexico, Pakistan, Argentina, Bangladesh, Cambodia, El Salvador, Guatemala, Malaysia, Taiwan, and the United Kingdom as economies that have taken steps to prohibit the importation of forced labor and proposes a 10 percent 301 tariff on most imports. USTR has proposed a 12.5 percent tariff for the remaining economies which have failed to enforce a forced labor prohibition.
There are a handful of countries—the United Kingdom, Ecuador, Guatemala, Argentina, and El Salvador—that are subject to only the forced labor 301 investigation and face a proposed 10 percent tariff. Conveniently, Washington negotiated agreements with these countries under IEEPA that set a 10 percent duty rate. For this reason, we assume these economies won’t face any additional tariffs, and imports could generate an additional $3.5 billion in revenue.
Other economies that negotiated deals may not be so lucky. The EU, Korea, Japan, Switzerland, and Liechtenstein negotiated agreements that effectively cap tariffs at 15 percent. Already, USTR has proposed a 10 percent tariff on European imports and a 12.5 percent tariff on Korean, Japanese, and Swiss imports—high rates, especially given that the second investigation has yet to produce any proposed remedies.
The key question here is whether the 301s will stack on most-favored-nation (MFN) rates, as they do for all China-related 301 tariffs. This is further complicated by the fact that the EU is still in the process of ratifying the Turnberry accord. The news out of Washington—especially if the tariffs stack—could quickly trigger a collapse of that deal and prompt retaliation. For this reason, we assume the government won’t raise overall tariffs above 15 percent, considering they may stack on MFN, generating $34 billion in annual revenue from EU imports, $6.3 billion from Japanese imports, $4.3 billion from Korean imports, and $3.2 billion from Swiss imports.
Previously negotiated reciprocal deals could offer even less tariff relief for economies subject to both Section 301 investigations. Indonesia, Taiwan, Cambodia, and Bangladesh all reached agreements with the US that locked in 15 to 19 percent tariff rates. Assuming the administration will use the second investigation to maintain similar levels, this could generate roughly $13 billion in additional revenue for Washington.
For the roughly forty economies lacking reciprocal frameworks and subject to the forced labor investigation, a 12.5 percent tariff could yield an additional $13 billion while extending US leverage across a wide range of trading partners, including Australia, Turkey, and Chile.
Since Canada and Mexico did not face IEEPA tariffs on goods covered by the United States-Mexico-Canada Agreement—an approach we assume will continue—they are excluded from this scenario.
Excess capacity, excess tariffs?
But what about countries that have yet to finalize deals with Washington? For many of them, the Supreme Court’s overturning of IEEPA provided an opportunity to halt or slow-walk agreements, banking on better outcomes in the future. Malaysia, for instance, declared its US tariff agreement null and void after the Supreme Court struck down IEEPA tariffs; India has repeatedly paused and restarted implementation; and Vietnam and Thailand have yet to ratify their deals.
While this strategy could have worked in a scenario where Trump abandoned his tariff strategy, it may instead yield a very different outcome, as demonstrated by the lower proposed rates for countries that struck deals. Several economies—some clear targets of the Trump administration—are now subject to both investigations and have no guarantee of lower tariff rates. Additionally, the US administration launched a third 301 investigation into Vietnam related to intellectual property, increasing the likelihood of even higher tariffs.
Against this backdrop, we modeled the proposed forced labor 301 rates and additional duties of 10 to 20 percent, totaling $48 billion in additional tariff revenue.
Brazil, which faced IEEPA tariffs of 50 percent, has also been the target of a separate 301 investigation launched in July 2025. On June 2, the United States Trade Representative (USTR) determined that most imports from Brazil should face a 25 percent tariff, likely stacking on top of a 12.5 percent forced labor tariff. This could generate an additional $6.2 billion.
Once again, China may be the biggest winner
As with most trade-related discussions, any analysis of Section 301 tariffs inevitably leads back to China. Countering Beijing is the central focus of the US administration’s efforts to reshape global trade—and although Trump and Xi agreed to a fragile truce last summer, the US still collected $92 billion in tariffs on Chinese imports in 2025, accounting for 35 percent of total revenue, through a mix of IEEPA tariffs, 301s dating back to 2018, and Section 232 national security tariffs.
China tariffs, given their scope and longevity, are designed to serve multiple objectives at once: generating revenue, creating leverage, and reshaping supply chains. But the collapse of IEEPA may ultimately give China one of the largest effective reductions in tariff exposure. Because Chinese imports faced substantial tariffs prior to the emergency measures, the scope to replicate an equivalent tariff wall without IEEPA authority is limited.
Assuming the government maintains all current 301s on China, stacks a 12.5 percent additional tariff from the forced labor investigation, and another 10 percent from the excess capacity 301—close to the 20 percent truce under IEEPA—the government could generate a maximum value of $66 billion.
While this is still significant revenue, it is striking that the proposed and assumed rates on China do not vary significantly compared to key US allies. One reason for this may be that a sharp tariff escalation risks destabilizing the US-China truce, potentially triggering another cycle of retaliation, supply chain disruption, and eventual de-escalation that would weaken both leverage and revenue. The challenge for the Trump administration is increasing pressure on Beijing without disrupting the fragile equilibrium that sustains it.
Another shaky wall built on IEEPA rubble
Based on 2025 import levels, our model of a Section 301 regime could theoretically generate nearly $170 billion in additional annual tariff revenue by raising tariffs on China and all partners involved in both Section 301 investigations. This would broadly match, and even exceed, the estimated $166 billion collected under IEEPA in 2025.
Our scenario, however, depends on a number of assumptions that may not hold. Ongoing negotiations could yield exemptions, trading partners could retaliate or secure carveouts, and courts could narrow executive authority.
Still, our broader conclusion holds: the Trump administration may be able to reconstruct much of the IEEPA tariff wall—but only through a patchwork of investigations and agreements that is more complex, and potentially more fragile, than what came before.
Madeline Chalecki is an assistant director at the Atlantic Council’s GeoEconomics Center.
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