[US Tariff Season 2] Will It Be Tailored to Trump?... All Eyes on Powerful Section 301 Investigation

"In the world of international trade, it is akin to codifying a kind of 'law of force,' allowing one country to unilaterally pressure the other. (For international trade, it was the law of the frontier)."

Alan Wolff, Senior Fellow at the Peterson Institute for International Economics (PIIE) and former Deputy Director-General of the World Trade Organization (WTO), assessed Section 301 of the U.S. Trade Act, enacted in the 1970s, in his analysis report last month titled "Why Did President Trump's Tariff Attempt Gain Legitimacy?" Literally referring to it as "the law of the frontier," Wolff was alluding to the kind of powerful law that existed in the American West during the 19th century, when fists often took precedence over the law. In the current global environment, this can be interpreted as a mechanism that favors U.S. unilateral pressure over resolving disputes through multilateral norms. Experts are divided on the extent to which other countries’ positions will be reflected in the investigation results conducted under this law. However, there is broad consensus that, in one way or another, President Trump will be able to legitimize the reciprocal tariffs he desires.

U.S. President Donald Trump. Photo by Reuters Yonhap News

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When this law was enacted, the United States was facing foreign unfair product standards, intellectual property violations, service barriers, lack of transparency, and inefficient dispute resolution procedures-issues that could not be easily addressed through trade agreements alone. As a result, Congress granted the U.S. the authority to take retaliatory measures regardless of whether international rules had been breached. Wolff explained, "Section 301 was created as a negotiating tool and as a means to give the U.S. leverage in negotiations. It was designed to secure the elimination of unfair practices or equivalent concessions." He also pointed out, however, that "the current intent behind using Section 301 is to reimpose broad tariffs on almost all imports without clear authorization from Congress."

Wolff highlighted that there is a strong possibility that a new tariff regime under this law could unfold after July 24. Currently, the United States is maintaining a provisional universal tariff of 10% by invoking Section 122 of the Trade Act, but this measure is set to expire on July 24. The U.S. Trade Representative (USTR) has begun soliciting opinions on Section 301 and will hold public hearings at the end of this month and in early May. Jamieson Greer, U.S. Trade Representative, stated, in response to questions about the investigation period, "We are aware of the 150-day period," adding, "The goal is to reach a conclusion before the Section 122 tariff expires."

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The United States has launched investigations to determine whether countries such as Korea are subject to Section 301. Experts are divided on what the investigation results might be. Sang-ung Ha, professor of political science and international relations at Sogang University, commented, "It's still unclear what the outcome of the preliminary investigation will be. However, after the U.S. Supreme Court ruling, the Trump administration will likely not be able to proceed exactly as it wishes, as it did last year." He predicted, "They have no choice but to resort to Section 232 and Section 301, which previous presidents also used to raise tariffs, but since these measures have already been used frequently, we will be able to respond effectively." Section 232 allows the president to restrict imports on the grounds of "national security." Korea has already experienced the power of this law, accepting steel export quotas in exchange for exemption from a 25% tariff.

There are also views suggesting that the outcome will likely be tailored to the Trump administration's preferences. Hyun Yoon, professor at Sogang University Graduate School of International Studies, noted, "Preliminary investigations usually take more than a year, but aiming to complete it in just 150 days suggests that the U.S. has already anticipated the outcome and intends to carry out the investigation unilaterally." He added, "Given the tight timeline, it's uncertain how well the countries under investigation will be able to represent their positions during the hearings."

Professor Hyun further pointed out, "Recently, Korea did not respond to the U.S. request to send warships to the Strait of Hormuz, which raises concerns that President Trump's dissatisfaction might influence the Section 301 investigation." He continued, "With the U.S. economy and oil prices unstable due to the Iran war, President Trump is under significant pressure ahead of the U.S. midterm elections. In this situation, he may be tempted to take dramatic action, which could lead to a rushed tariff investigation."

Sang Sik Jang, Head of Research at the Korea International Trade Association, diagnosed, "Last year, reciprocal tariffs were imposed broadly across many items, making it a 'big hammer' approach. This time, however, Section 301 is selective, so it can be seen as 'targeted tariffs.'" He added, "Although the number of items has decreased, the tariff rates vary by country and by item, making the situation even more unpredictable compared to last year."

There is also analysis suggesting that the Trump administration could use Section 301 not simply as a means to impose tariffs, but as a bargaining chip for negotiations. Marcus Noland, Deputy Director of PIIE, wrote in an East Asia Forum (EAF) column that President Trump could continue to pressure allies and others using Section 301 and other legal tools. After declaring his intention to impose tariffs on "Liberation Day" (April 2) a year ago, Trump could use these measures to force the implementation of bilateral agreements reached with Japan, Korea, Taiwan, and others.

There is still a possibility that this new attempt to use Section 301 could fail. The Trump administration might not be able to produce the desired investigation results and subsequent actions before the provisional tariffs under Section 122 expire. Everett Eissenstat, former Trump administration trade official, told the Financial Times (FT), "Section 301 investigations typically take six to eight months to complete," adding, "This is a relatively quick timeline."

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