Both investigations include formal public comment periods, with written submissions due by April 15, 2026.
Major international trade developments have occurred in recent weeks, including: (1) the announcement of sweeping Section 301 investigations by the Office of the United States Trade Representative (USTR); (2) the issuance of orders by the U.S. Court of International Trade (CIT) affecting how companies may seek International Emergency Economic Powers Act (IEEPA) tariff refunds; and (3) new legal challenges to the recently enacted Section 122 tariffs. Each of these developments carries material implications for companies engaged in international trade and global supply chain management.
New Section 301 Investigations
Structural Excess Capacity and Production (16 Economies)
On March 11, 2026, the USTR initiated Section 301 investigations into “structural excess capacity and production in manufacturing sectors” in 16 economies: China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan and India. The USTR has alleged that the subject countries have developed production capacity that has resulted in overproduction and large or persistent trade surpluses.
The investigation covers a broad range of manufacturing sectors, including aluminum, automobiles, batteries, cement, chemicals, electronics, energy goods, glass, machine tools, machinery, paper, plastics, processed food and beverages, robotics, satellites, semiconductors, ships, solar modules, steel and transportation equipment. Policy interventions that the USTR has identified as contributing to structural excess capacity include production subsidies, wage suppression, noncommercial activities of state-owned enterprises, sustained market-access barriers, lax environmental or labor protections, subsidized lending and currency manipulation.
The USTR has requested consultations with the governments of all 16 investigated economies. Written public comments are due by April 15, 2026, and public hearings are scheduled to commence at the U.S. International Trade Commission on May 5, 2026.
Forced Labor Import Bans (60 Economies)
On March 12, 2026, the USTR initiated Section 301 investigations into forced labor that target 60 of the largest U.S. trading partners, collectively representing more than 99 percent of U.S. imports in 2024. The investigations will examine whether each economy’s failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor constitutes an act, policy or practice that is “unreasonable or discriminatory” and that “burdens or restricts U.S. commerce.” Pursuant to statute, an act, policy or practice is considered “unreasonable” if it constitutes a “persistent pattern of conduct that permits any form of forced or compulsory labor.”
The 60 economies under investigation include (among others): Brazil, Canada, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Peru, Venezuela, Australia, Cambodia, China, India, Indonesia, Japan, Kazakhstan, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand, Vietnam, the European Union (as a bloc), Morocco, Türkiye and the United Kingdom.
As noted by the USTR, these investigations will determine “whether foreign governments have taken sufficient steps to prohibit the importation of goods produced with forced labor and how the failure to eradicate these abhorrent practices impacts U.S. workers and businesses.”
The USTR has further stated that, although some trading partners have adopted measures intended to stop the importation or sale of products produced using forced labor (e.g., Canada, Mexico and the European Union), “none of these countries has adopted and effectively enforced a forced labor import prohibition to date.” If the USTR determines that any country’s practices are actionable, it must then determine what responsive measures to take, which could include the imposition of additional tariffs or import restrictions.
The USTR has requested consultations with the governments of all 60 countries. Written public comments and requests to testify at a public hearing are due by April 15, 2026, and public hearings are scheduled to be held at the U.S. International Trade Commission beginning on April 28, 2026.
Developments in Seeking Refunds of IEEPA Tariffs
As discussed in our previous Alert on the U.S. Supreme Court’s decision in Learning Resources, Inc. v. Trump, the Court held that the president does not have authority under IEEPA to impose tariffs. However, the Court did not address the process by which importers can seek to obtain refunds of the IEEPA tariffs that they previously paid.
Since the Court issued its ruling, the CIT has ordered U.S. Customs and Border Protection (CBP) to commence the process of refunding IEEPA tariffs to importers. In response to the CIT’s order, CBP has stated that it is developing a new automated system called the Consolidated Administration and Processing of Entries (CAPE) to process refund requests.
CAPE will have four components: (1) a claim portal where importers and customs brokers with ACE accounts can submit refund claims; (2) a mass processing module that recalculates duties as if IEEPA duties had never been declared; (3) a review and liquidation/reliquidation module; and (4) a refund that consolidates and electronically distributes refunds to designated bank accounts. CBP has filed periodic status reports with the CIT regarding the progress being made in the development of CAPE. Given the rate of progress, the CIT has suspended enactment of its order relating to the immediate refund of IEEPA riffs.
CBP anticipates a phased rollout, with the first phase covering the majority of formal and informal entries on which IEEPA duties were paid, excluding entries subject to antidumping or countervailing duties, entries with suspended or extended liquidation status and certain other entry types such as warehouse withdrawals and drawback claims.
However, it remains unclear when CAPE will be fully operational. It is also uncertain whether the government will appeal the CIT’s broad order directing CBP to process IEEPA tariff refunds to the U.S. Court of Appeals for the Federal Circuit. Given these uncertainties, it is recommended that importers wishing to obtain refunds of their IEEPA tariffs pursue a dual-track strategy of filing suit with the CIT and fulfilling any administrative requirements that may be required, including the timely filing of administrative protests with CBP.
Legal Challenges to Section 122 Tariffs
As previously discussed, on February 20, 2026, President Donald Trump announced that global tariffs of 10 percent would be imposed pursuant to Section 122 of the Trade Act of 1974, as amended. The Section 122 tariffs went into effect on February 24, 2026.
On March 5, 2026, the tariffs were formally challenged in a lawsuit filed by 24 states at the CIT. See State of Oregon, et al, v. Trump, et al. (Case No. 26-01472). In this case, the states challenge the legality of the Section 122 tariffs on the basis that (i) the statutory conditions required to implement tariffs under Section 122 have not been met and (ii) the tariffs the president imposed in the name of Section 122 go beyond the scope of tariffs provided for by the statute.
On March 9, 2026, the Liberty Justice Center also filed a lawsuit at the CIT, captioned Burlap and Barrel, Inc. v. Trump, Case No. 26-01606, challenging the president’s authority to impose global tariffs under Section 122. The plaintiffs, Burlap and Barrel, a New York-based spice importer, and Basic Fun, a Florida-based toy company, allege two principal counts. First, they argue the president’s Section 122 tariffs exceed his statutory authority because Section 122 is limited to addressing “large and serious United States balance-of-payments deficits,” which the complaint contends are economically impossible under the current system of floating exchange rates. The complaint alleges that the president has improperly conflated “trade deficits” with “balance-of-payments deficits” (two distinct economic concepts) and that no president has ever invoked Section 122 to impose tariffs since its enactment in 1974. The complaint further alleges that the proclamation’s numerous product and country exemptions violate Section 122’s requirement of nondiscriminatory and uniform application. The plaintiffs also argue that if Section 122 is interpreted to grant the president the broad authority he claims, such a delegation of Congress’ taxing power would violate the nondelegation doctrine (a constitutional principle rooted in Article I, Section 1, of the U.S. Constitution), which provides that all legislative powers are vested in Congress. The plaintiffs seek declaratory and injunctive relief along with damages equal to the tariffs they have been required to pay.
Why It Matters
Expanded Tariff Exposure
The two new Section 301 investigations could result in significant new tariffs or import restrictions across a vast range of economies and manufacturing sectors. Notably, the forced labor investigation covers 60 economies representing more than 99 percent of U.S. imports, meaning virtually all companies that import goods into the United States could be affected. The excess capacity investigation targets 16 economies across at least 21 manufacturing sectors, and a finding of actionable practices could result in additional duties on specific categories of goods.
Supply Chain and Compliance Risk
The forced labor investigation signals an intensified focus on supply chain integrity. Companies that source goods internationally (particularly in sectors identified as high-risk for forced labor, such as agriculture, garments, textiles, critical minerals, solar products and seafood) should expect heightened regulatory scrutiny. If the USTR determines that an economy’s failure to enforce forced labor import bans is actionable, the resulting duties or restrictions would increase the cost of importing from those economies and could force supply chain restructuring.
IEEPA Tariff Refund Opportunities
Companies that paid duties under the now-invalidated IEEPA tariffs have a pathway to obtain refunds through CBP’s CAPE system once it becomes operational. However, the system is still under development, the timing of full deployment remains uncertain, and it is unclear whether the government will appeal the CIT’s order directing CBP to process refunds. Accordingly, importers should pursue a dual-track strategy of filing suit with the CIT while also complying with any administrative requirements established by CBP, including timely filing of administrative protests and 28 U.S.C. § 1581(i) cases.
Uncertainty Around Section 122 Tariffs
The legal challenge in Burlap and Barrel introduces significant uncertainty about the durability of the current 10 percent (potentially 15 percent) global tariff imposed under Section 122. By their own terms, the Section 122 tariffs are temporary (limited to 150 days without congressional approval) but the legal outcome could accelerate their removal or, alternatively, validate the president’s authority. Either way, businesses should plan for the possibility that the tariff landscape may yet again change abruptly.
What Businesses Can Do
Review and Monitor
Businesses should conduct a thorough review of their current import activities to determine whether they source goods (directly or through supply chain inputs) from any of the 60 countries subject to forced labor investigation or the 16 countries subject to excess capacity investigation. Given the USTR's intensified focus on forced labor, businesses should also evaluate and strengthen their supply chain due diligence and compliance programs, including supplier audits, traceability mechanisms and contractual representations. Businesses also should closely monitor the outcome of the cases before the CIT challenging the Section 122 tariffs, which could create an opportunity for refunds of the Section 122 tariffs.
Participate in the Public Comment Process
Both investigations include formal public comment periods, with written submissions due by April 15, 2026. The USTR has specifically invited comments on whether the investigated economies' practices are "unreasonable or discriminatory," the extent to which those practices burden U.S. commerce, and what actions the USTR should take—including the "level and scope" of any additional duties or import restrictions. Companies and industry groups with a stake in the outcome should consider submitting comments through the USTR's electronic portal. Requests to testify at the public hearings (April 28 for forced labor and May 5 for excess capacity) must also be submitted by April 15, 2026.
Take Action to Seek IEEPA Tariff Refund
Importers that paid IEEPA tariffs should take action to protect their ability to obtain refunds of those IEEPA tariffs. For example, companies should consider filing lawsuits at the CIT if they have not already done so. Importers should also ensure that they file protests with CBP in a timely manner with respect to entries that have been liquidated by CBP. In addition, companies should monitor the progress being made by CBP in developing CAPE and should be prepared to file claims via CAPE once it becomes operational.
About Duane Morris
Given the significant developments in U.S. trade policy and the ongoing uncertainty surrounding tariff implementation, enforcement and refund procedures, Duane Morris’ Tariff Mitigation Task Force continues to assist clients navigating this complex environment. The task force consists of a multidisciplinary group of professionals with extensive experience in industries heavily impacted by tariffs, including automotive, construction, energy, fashion, retail, consumer products, life sciences, pharmaceuticals, electronics and semiconductors. Our team provides assistance in developing tariff mitigation strategies that optimize supply chains, minimize disruptions and identify opportunities to recover tariff-related costs. We are actively assisting clients with both tracks of the recommended dual strategy for seeking IEEPA tariff refunds (i.e., initiating cases at the CIT and filing submissions with CBP as necessary).
For More Information
If you have any questions about this Alert, please contact Geoffrey M. Goodale, Hope P. Krebs, Thomas R. Schmuhl, Eduardo Ramos-Gómez, Brian S. Goldstein, Raul Rangel Miguel, Laura M. González Alemán, any of the attorneys in our firm’s Tariff Mitigation Task Force or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.