These latest investigations collectively cover almost all trade into the United States (roughly 99 percent). They involve alleged structural excess capacity in 16 economies (including China, the European Union, Japan, Korea, and Mexico), and lack of sufficient protections against imports made with forced labor in 60 economies (again involving China, Japan, and the EU, as well as Canada, Switzerland, and the United Kingdom). The scale of these investigations is unprecedented, as is the administration’s transparent intent to use Section 301 to replace the tariffs imposed under IEEPA that the Supreme Court had just invalidated. Treasury Secretary Scott Bessent, for example, said in March that he expects “tariff rates will be back to their old rate within five months.”
The legal and constitutional question is whether this effort will succeed. More precisely: can the president use perfunctory Section 301 investigations against every major trading partner as an adaptable, permanent mechanism to set and then adjust tariff rates for every country in the world indefinitely, at the president’s will?
The administration’s use of Section 301 is not merely aggressive but structurally transformative. By combining mass investigations, expansive use of the statute’s tariff-modification authority, and the judicial deference historically accorded to USTR, Section 301 can be made to function as something that it was never designed to be: a de facto permanent delegation of tariff-setting power to the executive. The constitutional delegation question, which the Court avoided in Learning Resources, has not gone away. It has migrated to a new statutory vehicle, and courts will have to confront it.
What the Court Left Open
The Supreme Court resolved Learning Resources on narrow grounds. Rather than reach the constitutional question of whether Congress can delegate broad tariff-setting authority to the executive, the majority held that IEEPA itself does not grant that power, relying on the major questions doctrine—a separation-of-powers principle that requires clear congressional authorization before agencies can decide questions of “vast economic and political significance.” Justice Clarence Thomas, writing alone in dissent, argued that Congress could in fact delegate all of this power to the president, and that IEEPA had done so.
That leaves three constitutional and statutory interpretation issues unresolved. The first is the non-delegation question Thomas raised: how much taxing authority can Congress delegate to the executive? The second is the major questions issue: whether any statute, however broadly worded, should be read to authorize tariffs of this scale and indefinite duration absent a clear statement from Congress. The third is arbitrary and capricious review: whether decision making is an abuse of power because the agency relied on factors beyond those Congress intended, failed to consider important aspects of the problem, or offered explanations that run counter to the evidence.
The Object and Purpose of Section 301
Congress enacted Section 301 of the 1974 Trade Act in the context of Japan’s rise as a major trade competitor and the U.S. wish for further General Agreement on Tariffs and Trade (GATT) negotiations to open foreign markets. Section 301 requires findings about “acts, policies, or practices”—not about outcomes such as trade balances or capacity utilization rates. It gives the president a negotiating tool to press individual trading partners to cease specific “unfair” practices, such as export subsidies, discriminatory licensing, and intellectual-property violations. Subsequent amendments in 1979, 1984, and 1988 expanded the definition of unfair practices and required USTR under Super 301 to identify priority foreign countries and practices for targeted action—making the statute more targeted, not less, as a tool to reduce trade barriers. The 1994 Uruguay Round Agreements Act tied Section 301 to WTO dispute settlement, which limited its unilateral use, as recorded in commitments that the United States made in an early WTO case.
Throughout its history, the statute operated as a tool to open markets and enhance intellectual property protection. From 1974 through 2016, USTR conducted roughly 130 Section 301 investigations, the great majority of them aimed at particular practices relating to particular industries of major trading partners (including the EU, Canada, Japan, and South Korea). This pattern shifted during the first Trump administration when USTR launched a broad-based investigation against Chinese treatment of U.S. intellectual property, which resulted in high U.S. tariffs imposed on most Chinese products. Although unilateral and broad in remedy, that 2017–2018 investigation remained based on a factual record identifying specific unfair practices related to one country.
The current sets of investigations, however, are nothing like anything before. USTR is investigating 86 economies simultaneously covering 99 percent of imports, under a dramatically accelerated 150-day timetable, and grounding the investigations in broad theories of “structural excess capacity” and forced labor, including against countries with more stringent labor protections than the United States. What was historically a case-specific, fact-intensive, dispute-driven process is being executed at a pace and breadth that Section 301 was never designed to accommodate.
Three Potential Legal Challenges
Non-Delegation Doctrine
Unlike IEEPA, the Trade Act of 1974 expressly authorizes tariffs as a remedy for unfair trade practices. Non-delegation thus appears to be the weakest of three potential grounds for legal challenge. However, although Congress delegated authority to raise tariffs, it did so within limits. If the president indeed claims that Section 301 constitutes a de facto delegation to raise tariffs against all countries and to change those tariffs at will following perfunctory “investigations,” then non-delegation issues arise. Even the Federal Circuit, in its decision upholding the first-term tariffs, emphasized that any modification must “be tailored to achieve Section 301’s statutory goal of eliminating the investigated conduct” and cannot be used to “raise tariffs for any reason whatsoever.”
Major Questions Doctrine
In the same case which addressed non-delegation, the Federal Circuit held that the major questions doctrine does not apply to the Section 301 tariffs in question. However, it did so only in the narrow context of the first Trump administration’s modification of tariffs imposed pursuant to an existing Section 301 investigation. It has yet to decide whether the doctrine applies to the broader question now before the courts: does Section 301 authorize tariffs imposed globally on all imports from all major trading partners, indefinitely, and modifiable at will without new investigations? The argument against the administration involves statutory interpretation in light of Section 301’s purpose: Section 301 was designed to open specific foreign markets and remedy specific unfair practices, and not to function as a global tariff-setting mechanism or a revenue-raising tool delegated to the president.
Arbitrary and Capricious Review
Claimants can also check the administration’s use of Section 301 through arbitrary and capricious review. This doctrine, under the Administrative Procedure Act, requires courts to set aside any agency action that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.” The standard requires agencies to examine the relevant facts, articulate a satisfactory explanation, and show a rational connection between the facts found and the choice made. Courts do not assess whether they would have made the same policy choice—they rather ask whether the agency considered the relevant issues, explained itself coherently, stayed within the statutory framework, and avoided reasoning inconsistent with the factual record.
There are four likely criteria that courts will apply in determining whether tariffs imposed under Section 301 satisfy this standard:
- Pretextual abuse: Are investigations structured to replicate tariff levels previously invalidated under another statute, rather than to remedy identified unfair trade practices on a case-by-case basis? Put otherwise, does the simultaneous use of Section 301 against all trade from all major trading partners constitute an abuse that is not in accordance with law?
- Adequacy of the record: Does the scale and speed of investigations undermine the factual basis required for reasoned decision-making?
- Fit between means and ends: Are the tariffs meaningfully tailored to the conduct identified, or do they operate as generalized trade restrictions untethered to specific findings?
- Internal consistency: Are similarly situated countries treated differently without coherent explanation, or do the rationales conflict across investigations?
These factors provide a workable framework for distinguishing aggressive but lawful uses of Section 301 from actions that amount to an abuse of authority.
The Challenge for USTR to Survive Arbitrariness Review
Evidence points against USTR’s investigations across all four factors.
Pace and Capacity
USTR typically takes 12 to 18 months to complete a Section 301 investigation. The administration, however, has instructed the agency to finish these new investigations in 150 days, timed to resolve just before the temporary Section 122 tariffs (which have been challenged successfully before the Court of International Trade) expire on July 24. USTR has roughly 200–250 staff and about 40 attorneys to handle the workload.
By comparison, USTR completed a total of 11 Section 301 investigations across the entire 2017–2025 period. The volume of cases generated by the 301 tariffs imposed on China alone caused capacity problems during Trump’s first term. The agency is now being asked to produce, on a compressed timetable, fact-intensive findings on theories far broader than anything used before under Section 301. That mismatch raises adequacy-of-the-record concerns.
Methodological Inconsistency and Error
USTR has already made a significant factual mistake on the public record. In a Federal Register notice initiating the structural excess capacity investigation, the agency alleged a $27 billion U.S. trade deficit with Singapore. Singapore’s Ministry of Trade and Industry responded with data documenting the opposite: a $27 billion U.S. surplus in 2024 The Ministry also disputed USTR’s claim of underutilized manufacturing capacity by noting that over 90 percent of Singapore’s industrial space was occupied. Although USTR still has time to correct this error, this type of factual error on the agency’s initiating notice—and regarding one of the major indicators that USTR is using to justify its excess capacity investigation against 16 economies—is the sort of defect that courts may question under arbitrary and capricious review.
Even more problematic is the methodological inconsistency that underpins the investigations. Structural excess capacity results when a country’s manufacturing output far outstrips both global and domestic demand; the essential idea is that countries are flooding the market through government subsidies and other measures. But in attempting to demonstrate this outcome, USTR shifts between bilateral and global trade surpluses, and between aggregate and sector-specific surpluses without any legally defensible rationale—appearing instead to select whichever statistics better support a finding of excess capacity for the country in question.
Japan’s inclusion is justified on the basis of its bilateral surplus with the United States—despite having a global goods trade deficit. Singapore, by contrast, is included on the basis of its global surplus—despite having a bilateral deficit with the United States. Both Japan and Thailand are alleged to have excess capacity because specific sectors of their economies have global trade surpluses; both countries, however, have global goods trade deficits at the aggregate level. Under such a loose and inconsistent methodology, the United States itself would meet USTR’s criteria for having structural excess capacity.
This methodological incoherence goes far beyond a simple factual error that USTR could correct on remand. The notice treats trade surpluses as the evidence of unfair conduct, when in fact trade surpluses are an inevitable feature of the global economy, reflecting country-by-country variations in macroeconomic policy and sector specialization. It also focus on outcomes rather than “acts, policies, and practices” that the statute requires. Both the factual errors and the broader methodological vagueness and inconsistencies provide evidence that expose the investigations to legal vulnerability.
The Comment Record Goes Against USTR
The public comments submitted during the structural excess capacity investigation overwhelmingly identify China as the sole source of the problem, with over 40 percent of the country-specific comments focusing on China. Moreover, even commenters who accept the China overcapacity diagnosis—such as the U.S.-China Business Council—advocate for narrowly targeted tariffs with robust exclusions, citing data that past Section 301 tariffs were absorbed by U.S. businesses or passed to consumers, with only 14 percent producing any U.S. reshoring. Comments from foreign governments and industry associations regarding the other countries under investigation tell a different story. Trade lobby group BusinessEurope argued that most EU countries do not have industrial overcapacity and are themselves harmed by Chinese overcapacity.
Multiple submissions from academic economists and think tanks also challenge the three core indicators USTR has proposed: trade surpluses, low industrial capacity utilization rates, and overproduction. A particular difficulty for USTR’s manufacturing-capacity-utilization metric is that the United States has a lower rate than many of the economies it is investigating. Similarly, many countries subject to forced labor investigations, such as EU members, have much stronger labor protections than the United States.
Additionally, the agency must respond to comments submitted on the record. The current factual record provides limited support for substantial tariffs targeting structural excess capacity in most of the 16 economies investigated, and the mismatch between the breadth of the investigation and the strength of the evidence is a significant legal vulnerability that maps directly onto the fit-between-means-and-ends and internal-consistency factors.
The Remand Challenge
Even if courts find that USTR’s investigations fail arbitrary and capricious review, the default remedy is to remand back to the agency rather than to vacate the underlying tariffs. Remand is likely when failures involve insufficient explanation, inadequate consideration of comments, or thin evidentiary records that can be addressed through further process. Since each investigation will result in a distinct determination and (likely) imposition of tariffs, and since different plaintiffs will challenge these determinations before the Court of International Trade (CIT) (which is the specialized Article III federal court that will hear all challenges), the litigation could get messy. Because all these cases will run through CIT, the resulting precedent will be uniform: a ruling on what Section 301 requires in one case will shape what USTR must establish in all of them.
Remand gives USTR additional time to supplement the factual record behind a determination, revise its analyses, and cure procedural defects. In addition, courts are unlikely to impose a temporary injunction on the tariffs during the remand period. USTR, as a result, may not be overly concerned about arbitrary and capricious review. Procedural failures alone are unlikely to halt the administration’s broader strategy.
However, there are three reasons why USTR may still not prevail.
First, even procedural remands create binding precedents. A remand holding that Section 301 requires specific factual development tailored to statutory ends or greater internal consistency across investigations would constrain future Section 301 actions. The broader the precedential constraints on what an initial investigation must establish, the narrower the scope for later modification of tariffs based on a previously completed investigation. Repeated remands across multiple investigations would create considerable pressure on USTR, making the administration’s desire for accelerated, broad investigations harder to achieve.
Second, remand is not the only remedy available. Where the administrative record directly contradicts the agency’s findings, courts can and do vacate them. If a factual error like the one regarding Singapore is included in a final investigation, vacatur becomes more likely. Severe or repeated procedural failures also can support vacatur.
Third, the core concern with the current investigations is a substantive one: that they are pretextually wielded to replicate (or largely replicate) tariff levels imposed under IEEPA that the Supreme Court invalidated. A finding of pretext goes to the legitimacy of the agency’s action and cannot be cured by gathering more evidence. Meaningful constraint, if any, will depend on courts willing to find substantive defects—such as pretextual abuse—that cannot be cured by a better administrative record.
What’s at Stake
The administration’s strategy is best understood as an attempt to reconstruct the IEEPA authority it lost in Learning Resources: a standing executive power to set or modify tariffs on any goods from any country at any time. Section 301 has become the administration’s chosen primary statutory authority for replacing the IEEPA tariffs. If the strategy succeeds through perfunctory investigations, expansive use of the modification authority, and judicial deference to USTR, the constitutional delegation question that Thomas raised in Learning Resources will become largely irrelevant. Delegation will have occurred de facto, regardless of whether the Supreme Court ever resolves the question de jure.
These Section 301 investigations are unlikely to be the last. USTR has signaled potential future ones that could trigger tariffs regarding drug pricing, alleged discrimination against U.S. technology companies, digital goods, digital services taxes, ocean pollution, and trade practices related to seafood, rice, and other goods. These could serve as fallbacks if the current investigations are deemed insufficient. They also could trigger additional measures if the underlying strategy proves successful. Either way, the legal questions raised by the current investigations will not be resolved in a single case or a single presidential term.
Three potential paths could clarify the scope of Section 301 tariff authority. First, the courts could apply the major questions doctrine to deployment of Section 301 at scale, finding that the wholesale conversion of a dispute-specific tool into a global tariff-setting mechanism is the kind of decision Congress must specify explicitly, if indeed permitted under the non-delegation doctrine. Second, the courts could tighten arbitrary and capricious review, particularly around the fit between investigative findings and tariff impositions in order to constrain their pretextual use. Third, Congress could amend Section 301 to clarify its scope—or, more likely, fail to act and allow the executive interpretation to prevail in practice unless the courts intervene.
There is a “power in naming,” whether it be national security or unfairness. If the executive can apply whatever label suits its purpose, such naming is inextricably linked to presidential assertions of power. It can be used to engage in war externally, to unleash ICE forces internally, or to take over the tariff and foreign commerce powers from Congress and wield trade wars against the entire world. Each successful exercise of that power reinforces the idea that the president’s authority is de facto without limit, requiring only some tweak of statutory analysis for the president to reach the desired result.
The stakes in the Section 301 cases are high. The underlying questions are, first, whether Congress retains any meaningful role in setting international trade and tariff policy; and, second, whether the judiciary is willing to impose meaningful constraints on executive claims to unlimited authority.
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