What are Sections 122, 301 and 232? Inside Trump’s latest move in the tariff battle

US President Donald Trump is actively considering three key tariff mechanisms -- Section 122, Section 301, and Section 232 -- in response to the Supreme Court’s recent decision that declared his use of emergency powers to impose broad import tariffs as unlawful. The administration’s approach now appears focussed on alternative legal frameworks to address international trade imbalances and safeguard domestic interests. 

"We will get back to the same tariff level for the countries. It will just be in a less direct and slightly more convoluted manner," US Treasury Secretary Scott Bessent stated on Friday, underlining the administration’s intent to maintain its tariff objectives through different statutory means. The potential use of these sections marks a significant shift in trade policy that could impact global supply chains and several trading partners.

Section 122

Section 122 of the Trade Act of 1974 grants the U.S. President authority to impose tariffs up to 15% on imports from any country deemed responsible for "a large and serious United States balance-of-payments deficit". The application of this section is subject to a maximum period of 150 days unless extended by Congress, and the President must consult with Congress on its implementation. This provision, which has never been previously utilised, is now positioned at the centre of Trump’s new tariff strategy. Trump announced plans to initiate a Section 122 process to apply a global tariff of 10%, moving away from previous broad-based emergency powers.

Section 301

Section 301 of the Trade Act of 1974 allows the U.S. Trade Representative (USTR) to investigate and impose trade measures if another country is found to have engaged in what is characterised as "unfair" trading practices. Historically, this has been a tool to address grievances such as discriminatory digital services taxes or market access impediments. Although no new Section 301 investigations have been launched in the immediate aftermath of Trump’s announcement, the mechanism remains a prominent option for targeting specific countries or sectors where the administration believes U.S. interests are being undermined.

The Section 301 framework has had particular relevance in trade disputes between the U.S. and India. The last Section 301 probe against India was linked to New Delhi’s digital services tax, which prompted retaliatory measures from the previous Trump administration and subsequent negotiations under President Biden. That dispute was largely resolved in 2021 when India agreed to phase out its digital levies as part of the OECD’s global minimum tax framework. The absence of a new Section 301 investigation against India in the current context signals a pause, but not an abandonment, of this tactic.

Section 232

Section 232 of the Trade Expansion Act of 1962 provides the U.S. President authority to impose tariffs on imports deemed a threat to national security, following a determination by the Secretary of Commerce. Unlike the other sections, Section 232 typically targets specific industries, such as steel, aluminium, and automotive products. The Trump administration previously employed Section 232 tariffs on several countries, including India, with ongoing effects on sectors like steel, aluminium, and certain automotive components.

Recent developments have seen some moderation of Section 232’s impact, especially following the U.S.-India trade agreement announced earlier this month. The agreement included commitments to remove tariffs on selected aircraft and aircraft parts, while also granting India a preferential tariff rate quota for automotive parts. Additionally, the deal opens discussions on possible negotiated outcomes for generic pharmaceuticals, pending further Section 232 investigations.

Facing legal and diplomatic headwinds, Trump has reiterated his determination to pursue alternative paths to maintain tariff pressure. During his response to the Supreme Court decision, he confirmed his intent to consider "other alternatives."