US Section 301 Forced-Labour Tariffs: India Secures Lower 10% Band

The use of tariffs as instruments of trade and foreign policy has deep statutory roots in US law. Section 301 of the Trade Act of 1974 grants the executive broad authority to act against unfair foreign trade practices — including intellectual property violations, market access barriers, and, as now invoked, failures to prohibit forced labour. Alongside it, Section 232 of the Trade Expansion Act permits tariffs on national security grounds, and Section 338 of the Tariff Act of 1930, historically dormant, allows discriminatory duties on countries that disadvantage US commerce. These statutes vest wide discretionary power in the executive, but US courts have increasingly scrutinised whether their invocation meets statutory requirements — a tension that has directly shaped the current tariff architecture.

The multilateral framework governing tariffs is anchored in the World Trade Organization (WTO), specifically the Most Favoured Nation (MFN) principle under GATT Article I, which prohibits discriminatory tariff treatment among members. The US has increasingly relied on GATT Article XXI (the national security exception) and human-rights framings to shield its measures from WTO dispute panels. Critically, the WTO's Appellate Body has been effectively paralysed since the US blocked new appointments to it, leaving dispute resolution in limbo and reducing the systemic check on unilateral action. This institutional vacuum has emboldened the use of domestic trade statutes as substitutes for multilateral negotiation.