By Timothy S. Donahue

Top Takeaways:

• Tariffs may continue: The initiated Section 301 investigations into 59 countries and the EU, paves the way for new tariffs once the temporary Section 122 tariffs expire on July 24.
• Cigar producers included: Major cigar-exporting countries are on the list, though cigars might not ultimately face new duties.
• Process begins now: Public comments are open until April 15, with hearings set for April 28 before the USTR decides whether to recommend tariffs.

Following last month’s Supreme Court ruling that invalidated much of the Trump administration’s tariff framework, analysts predicted the White House would seek alternative legal routes to uphold its global tariff strategy.

One option was the Section 122 tariffs implemented in February. These measures established a baseline tariff rate of 10 percent on many countries, sometimes echoing earlier tariffs that had been struck down by the Court. The main difference lies in the legal authority used to impose them. However, the Section 122 tariffs are expected to be temporary and will expire on July 24 unless Congress renews them—an unlikely scenario given their political unpopularity and the upcoming midterm elections.

Writing for halfwheel, Charlie Minato, co-founder of the publication and a legendary cigar industry reporter, noted that the administration has now begun laying the groundwork for the next phase of tariffs.

On March 12, the Office of the U.S. Trade Representative (USTR) announced investigations into 59 countries and the European Union—described as “60 of the largest trading partners of the United States”—under Section 301. Officially, the investigations focus on allegations related to forced labor, although the process also serves as a legal mechanism for imposing additional tariffs.

The list includes the Dominican Republic, Honduras, and Nicaragua—the countries that produce most of the cigars imported into the United States. Costa Rica and Mexico, smaller cigar-producing nations, are also on the list.

The investigation involves almost half of the world’s countries, including close U.S. allies like Israel and Australia, geopolitical rivals such as China and Russia, and smaller trade partners like the Bahamas.

Under the Section 301 process, the USTR must hold a public comment period. Comments are accepted until April 15, and hearings are scheduled for April 28. The agency will then issue recommendations that could result in new tariffs based on allegations of forced labor.

The announcement did not include proposed tariff rates, but analysts expect the administration could use the Section 301 investigation to uphold its tariff policy after the Section 122 measures expire.

For some countries, Section 301 scrutiny is not new. Nicaragua has already undergone a multi-year investigation related to alleged human rights violations and potential breaches of the CAFTA-DR trade agreement, reports Minato.

“Despite the international consensus against forced labor, governments have failed to impose and effectively enforce measures banning goods produced with forced labor from entering their markets,” said Jamieson Greer, the U.S. trade representative. “For too long, American workers and firms have been forced to compete against foreign producers who may have an artificial cost advantage gained from the scourge of forced labor.”