The US Trade Probe Strategy After the Supreme Court
The context matters more than the announcement. On February 20, the U.S. Supreme Court ruled 6-3 that President Trump had exceeded his authority by using the International Emergency Economic Powers Act to impose country-specific reciprocal tariffs, striking down the centerpiece of his trade agenda. Within days, the administration pivoted to Section 301 of the Trade Act of 1974 — a statute that allows the USTR to investigate and impose tariffs on a country-by-country basis through a formal investigation process rather than executive emergency declaration. The forced labor US trade probe against 60 economies, combined with the excess-capacity investigation against 16 economies announced one day earlier, represents the most sweeping use of Section 301 since the statute’s creation. This is part of The Rio Times’ comprehensive coverage of Latin American financial markets and economic developments.
USTR Ambassador Jamieson Greer told reporters he hopes to conclude the investigations — including proposed remedies — before temporary 10% tariffs imposed under Section 122 expire in July. Deborah Elms of the Hinrich Foundation called the April 28 hearing timeline “unrealistically short” given the breadth of countries involved. Wendy Cutler, former U.S. trade representative and vice president at the Asia Society Policy Institute, observed that with reciprocal tariffs struck down, the administration made clear that Plan B would be deployed immediately.
What the US Trade Probe Means for Latin America
Nine Latin American economies are on the list: Brazil, Argentina, Chile, Colombia, Ecuador, El Salvador, Guatemala, Honduras, and Nicaragua, plus the Caribbean’s Bahamas, Guiana, and Trinidad and Tobago. For Brazil specifically, the forced labor allegation targets the agricultural sector, where in 2024 the Labor Ministry rescued over 2,000 workers from conditions analogous to slavery. Brazilian diplomats privately worry that these documented vulnerabilities — which Brazil itself has actively combated — will be instrumentalized to justify tariffs rather than addressed through cooperation. The Itamaraty’s August 2025 response to the prior Section 301 investigation argued that Brazil’s policies are transparent, non-discriminatory, and WTO-compliant, while reiterating that Brazil does not recognize the legitimacy of unilateral instruments like Section 301.
The combined effect of both investigations is substantial. Brazil already faces Section 232 tariffs on steel, aluminum, copper, and lumber affecting approximately $10.9 billion in exports. The ongoing July 2025 Section 301 probe covers digital trade, ethanol, intellectual property, and deforestation. Now the forced labor investigation adds another vector. CNN Brasil reported that 22% of Brazil’s trade flow with the United States is already impacted by surcharges — and any additional tariffs resulting from these new probes would further compress that corridor.
Allies and Rivals on the Same List
Trade experts noted the remarkable breadth of the list. The European Union — which enacted its own forced labor regulation banning products made with forced labor from its market — sits alongside Venezuela and Libya on the same investigation docket. The UK, Japan, Australia, and Canada are targeted alongside Bangladesh and Cambodia. Elms of the Hinrich Foundation argued that targeting countries that already have legislative frameworks against forced labor while sparing others with weaker records does not make analytical sense. The sweeping scope risks alienating the very partners Washington needs for a collective response to Chinese industrial overcapacity. CBS News noted that Greer’s statement does not explicitly threaten tariffs — but Section 301 authorizes them, along with import restrictions and the suspension of trade agreement concessions, if investigations conclude that unfair practices exist.
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