The Menacing 301 Tariffs Are Here!

On July 23, local time, the Office of the United States Trade Representative (USTR) issued a notice citing Section 301 of the Trade Act of 1974, using the pretext of so-called "forced labor" to impose tiered tariffs on 60 countries and regions worldwide.

From the "Liberation Day Tariffs" launched in April 2025, to Section 122 this past February, and now Section 301, the Trump administration has exhausted every means to prolong the effectiveness of U.S. tariff policies, delivering a fresh round of shocks and challenges to the global economic and trade order.

Announcement on the official USTR website.

Tariff Repackaging with a Seamless Transition

This U.S. tariff adjustment is meticulously designed, with a seamless transition between old and new policies—a clear sign that the White House has gone to great lengths to implement Trump's tariff agenda.

Precision Timing in Legal Transition

In February of this year, the U.S. Supreme Court ruled that the "reciprocal tariffs" imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA) were unconstitutional.

On the very day of the ruling, the Trump administration invoked Section 122 of the Trade Act of 1974, citing "balance of payments imbalances" to impose a 10% temporary tariff on all countries.

However, Section 122 grants the president tariff authority for only 150 days, with no possibility of extension. In other words, this temporary tariff would automatically expire on July 24.

To that end, the USTR initiated a replacement plan as early as March, launching two parallel Section 301 investigations: one targeting so-called "overcapacity," and the other directly aimed at "forced labor," covering the 60 economies in this round.

Ultimately, the "forced labor" investigation was completed in just five months—solely to ensure a seamless transition between the old and new policies.

At the same time, Section 301 has no statutory constraints on tariff rates or implementation duration, subject only to a mandatory review every four years.

This means the Trump administration can escape the "temporary" nature of high tariff barriers and legally pursue tariff policies over the long term.

On July 22, the U.S. Trade Representative testified at a hearing.

Precisely Calibrated Tariff Scope

This round covers approximately 99% of U.S. foreign trade volume, effectively bringing nearly all major trading partners into the tariff net, with differentiated rates based on unilaterally determined U.S. criteria.

• Tier 1 includes 17 economies—Canada, the UK, Mexico, and others—subject to a 10% tariff. The U.S. claims these economies have already implemented so-called "forced labor control measures," thus qualifying for lower rates.
• Tier 2 includes the EU, Japan, South Korea, Taiwan (China), and others. They are not subject to a standalone 12.5% tariff; instead, their Most-Favored-Nation (MFN) rates are stacked with Section 301 tariffs. As a result, the final applicable rates for these economies are capped between 10% and 12.5%.
• Tier 3 includes 38 economies—China, Brazil, Thailand, and others—subject to a 12.5% tariff. The U.S. alleges that these economies have not implemented "forced labor" bans, thus incurring higher rates.

This classification standard, determined at the USTR's sole discretion, is rash and absurd. "Forced labor" is nothing more than a veneer for the Trump administration's protectionist trade agenda.

 

Carefully Curated Exemption List

This tariff scheme also includes an exemption list, with all waivers concentrated in strategic goods indispensable to the U.S.

Minerals, pharmaceuticals, aviation components, and basic industrial raw materials are exempt from the new tariffs. This arrangement is heavily self-serving: by keeping upstream raw material imports tariff-free, the U.S. stabilizes domestic prices while shifting the entire tax burden onto foreign products.

Additionally, Cambodia, Indonesia, Malaysia, and Bangladesh can receive tariff exemptions on apparel and textiles, up to the value of U.S. cotton and textile raw materials they import. This is designed to encourage these four countries to buy more U.S. textile materials for their garment processing industries.

The Trump administration's tariff plan may appear legally grounded, but in reality, it places domestic law above multilateral trade rules. At its core, it remains the same "America First" hegemonic logic.

Interlocking Interests and Calculations

By switching tariff legal instruments, the U.S. has transformed temporary tariff measures into institutionalized tariff weapons, underpinned by complex interests and strategic calculations.

Pressuring International Trading Partners

• For allies, the U.S. has not granted exemptions, merely setting relatively lower rates to maintain a semblance of unity within the alliance system. The tiered tariff structure allows the U.S. to both coerce allies into making concessions on market access, rules of origin, and geopolitical issues, and to reinforce its control over the alliance system through economic means. Moreover, for U.S. allies to secure lower rates, they must amend domestic laws to align with U.S. standards and submit to verification.
• For China, the timing of this new Section 301 tariff carries strong overtones of strategic maneuvering. Although recent China-U.S. economic and trade teams have maintained communication, differences persist on issues like market access. This comes as high-level talks between the two sides are scheduled to resume, making the U.S. move a clear bid to gain additional bargaining leverage.

Consolidating Domestic Electoral Support

With the U.S. midterm elections approaching and the manufacturing reshoring narrative heating up, tariffs have become a highly cost-effective political tool.

On one hand, during the implementation of Section 122 tariffs, the federal government collected approximately $8 billion per month—a significant incremental revenue source for the Trump administration. By extending tariff policies, the administration can sustain this revenue stream to support domestic fiscal spending.

On the other hand, Trump continues to showcase his "America First" toughness to voters, thereby shoring up support among conservative constituencies. The core message is unmistakable: no matter what judicial rulings may obstruct, the administration's resolve to maintain high-pressure tariffs and uphold "America First" will never waver.

A Prelude to Further Actions

This round of Section 301 tariffs under the "forced labor" pretext is only the beginning. Another Section 301 investigation targeting so-called "industrial overcapacity" is still underway, and more targeted tariff barriers in key industries—steel, automobiles, new energy, and others—cannot be ruled out in the future.

This U.S. tariff policy reveals two clear trajectories: for high-tech, new energy, and other industrial commanding heights, the U.S. will continue tightening imports to curb the industrial upgrades of major competitors; for consumer goods like apparel and home furnishings, exemption policies are designed to alleviate domestic inflation and create breathing room.

The Trump administration has changed tariff justifications time and again, but its essence—wielding tariffs as a weapon and pursuing trade protectionism—has never changed. Such unilateral actions that undermine the international economic and trade order cannot resolve its own deep-seated structural problems and will ultimately backfire.

In an era of deep global economic integration, a zero-sum game leads nowhere. Only through equal consultation and mutual benefit can trade differences be genuinely resolved.

Jiu Wan Li: The High Ground

** 博客文章文責自負,不代表本公司立場 **

On July 28, local time, the U.S. Federal Communications Commission (FCC) officially updated its "Controlled List," adding advanced robotics equipment and power inverters manufactured abroad to its import restrictions.

Although the U.S. move did not directly name China, it is abundantly clear from the market landscape, policy continuity, and statements by U.S. officials that this is a "targeted effort to contain China."

On July 28, the U.S. Federal Communications Commission updated its "Controlled List."

Targeted Containment Aimed at Advanced Manufacturing

On the surface, the addition of advanced robotics equipment and power inverters—both civilian-use devices—to the controlled list is purportedly to prevent "remote manipulation and data leaks." In reality, however, it is intended to suppress two of China's dominant industries.

Precisely Blocking Key Sectors

This round of restrictions zeroes in on two of China's globally leading industries, with the ban taking effect immediately upon announcement.

The first is advanced robotics equipment. The FCC defines this as "controllable equipment with autonomous mobility, multimodal environmental perception capabilities, and wireless networking communication functions," explicitly citing humanoid robots and quadruped robots as typical examples.

Statistics show that China accounts for nearly 70% of global sales of quadruped robots, and has produced over 400 humanoid robot models—more than half of the global total. Chinese companies' production capacity and product performance consistently rank among the world's best.

Notably, on July 24, the U.S. House of Representatives passed the Fiscal Year 2027 National Defense Authorization Act, which explicitly restricts the U.S. military from procuring Chinese-made humanoid robots. Just four days later, the FCC extended the restrictions to the entire commercial market, a timeline far faster than market expectations.

The second category is power inverters. The controlled list primarily targets grid-tied inverters used in photovoltaic and energy storage systems that feature remote communication and control capabilities—commonly known as "smart inverters."

In 2025, approximately 90% of the world's inverters were produced by 23 companies across 7 countries, 16 of which are Chinese manufacturers. About 90% of inverters used in U.S. utility-scale solar projects rely on overseas supply, with Chinese companies being key suppliers.

Ironically, despite the U.S. Department of Energy having concluded in professional tests earlier this February that "there is no conclusive evidence of intentionally introduced malicious communication functions in Chinese-made inverters," the FCC has still blocked Chinese-produced power inverters on "national security" grounds.

A humanoid robot performs precision loading and unloading in a tablet manufacturing plant in Nanchang, Jiangxi.

A Multi-Layered Control Framework

The new regulations establish a three-tier enforcement structure: "ban as the core, flexible control, and limited exceptions."

Core Access Ban: Going forward, equipment models on the list will be completely prohibited from applying for or obtaining FCC certification, effectively closing off legal pathways for new models to enter the U.S. market.

Flexible Control for Old vs. New Products: Products that have already obtained FCC certification and are currently circulating in the U.S. market are temporarily allowed to continue sales and operations. However, all new products that have not completed certification will permanently lose access to the U.S. market.

At the same time, the FCC reserves the right to revoke the certification of existing products at any time, leaving ample policy room for further escalation and dynamic suppression in the future.

Limited Exception Access: The new rules also provide a "conditional waiver" application channel. Equipment manufacturers may submit special security assessment applications to the U.S. Department of Defense or the Department of Homeland Security. Only products that pass review will be granted conditional market access permits.

It is reported that similar equipment from Europe and Japan can clear customs quickly with only basic testing, while Chinese equipment must undergo additional rigorous procedures, including full source-code audits and long-term on-site factory inspections.

By unilaterally erecting trade barriers and overstretching the concept of national security, the U.S. is essentially using security as a pretext to protect its domestic industries.

Erecting Barriers Harms Everyone

This update to the controlled list will further aggravate technological barriers and supply chain competition in the global advanced manufacturing sector, benefiting no one.

Impact on China: Shrinking Overseas Market Space

The U.S. is a core high-value market for high-end smart equipment and power storage devices, and an important platform for Chinese companies to refine premium products, validate cutting-edge technologies, and build international brands.

Following the implementation of the new FCC rules, opportunities for new Chinese-made robots and networked inverters to enter the U.S. market will be significantly reduced, hindering Chinese companies' efforts to expand overseas and promote brand internationalization.

Current data shows that China's robot exports to the U.S. are limited. Industrial robot exports are mainly directed to Southeast Asia, and emerging humanoid robots have not yet reached large-scale commercial use. Therefore, the impact on the robotics industry is relatively manageable, mainly constraining China's ability to build a global industrial ecosystem for smart equipment.

The situation differs for inverters. In the short term, there will be a direct impact on Chinese manufacturers' operations. However, in the long run, it will not shake the global market share of Chinese inverters.

Furthermore, the U.S. regulatory logic has a strong spillover effect, and other countries may follow suit.

Impact on the U.S.: Higher Costs and Weakened Competitiveness

Chinese robots and inverters have been able to enter the U.S. market on a large scale over the long term because of their exceptional cost-performance ratio and stability.

By artificially blocking compliant, high-quality Chinese supply, the U.S. is forcing domestic companies to turn to more expensive alternatives from Europe, Japan, and other economies. This directly raises procurement and maintenance costs for U.S. data center construction, new energy integration, and smart equipment R&D, undermining its cost advantage and expansion capacity in global technological competition.

In fact, these new controls are likely to backfire on the U.S.'s domestic solar and AI industries.

The U.S.'s latest adjustment to its controlled list shows that, in the global technology race, facing the situation where it is being overtaken, the U.S. is not seeking to run faster, but rather to hinder its pursuers by erecting obstacles.

Today, the multipolarization of global technology and the division and cooperation of industrial chains are irreversible trends. Overstretching national security and pursuing unilateral protectionist trade measures will only deepen the fragmentation of technological ecosystems—and cannot stop the rise of China's high-end manufacturing sector.