The U.S. tariffs that replaced Washington's struck-down emergency duties have now been collected for more than 100 days, charging 10% or 12.5% on goods from 60 economies, including nearly every major exporter in Asia, while a federal trade court decides whether they are legal.

For Asian manufacturers and the investors who own them, the case is one of the biggest unresolved legal questions in U.S. trade policy. USTR's fact sheet sets two tiers, 10% for partners that have committed to ban imports made with forced labor and 12.5% for those that have not. The duties, which took effect July 24, apply to China, Hong Kong, Singapore, Thailand, the Philippines and Vietnam at 12.5%, and to India, Indonesia, Malaysia, Cambodia, Bangladesh, Sri Lanka and Pakistan at 10%, according to a client note from law firm Troutman Pepper Locke. Japan and South Korea face a cap of 12.5% on the combined ordinary and Section 301 duty, and Taiwan a 10% cap. A ruling against the tariffs could open a second wave of refunds, after the one already under way for the emergency duties. A ruling for the government would leave the duties in place on most of the region's shipments to the U.S.

What the Court of International Trade is weighing

A three-judge panel of the U.S. Court of International Trade in New York heard oral arguments on Sept. 30 in a consolidated case, In re Section 301 Forced Labor Cases. Plaintiffs include spice importer Burlap and Barrel and watch retailer Collective Horology, represented by the Liberty Justice Center, as well as a coalition of state attorneys general, according to the law firm Coppersmith.

The importers sued on July 24, the day the tariffs took effect, Supply Chain Dive reported. They argue the U.S. Trade Representative's office set the rates before finishing its investigation, did no meaningful country-by-country analysis and failed to make the country-specific findings tying a particular foreign practice to the tariffs that, in their reading, the statute requires, according to the Liberty Justice Center. They also say the duties closely track the structure of the earlier program under the International Emergency Economic Powers Act (IEEPA), which the Supreme Court ruled in February did not authorize tariffs.

The Liberty Justice Center said the duties reach products from economies accounting for about 99.4% of U.S. imports. Its lawyers said they do not dispute that forced labor is wrong; their claim is that USTR stretched its authority.

Importers and the Justice Department filed new briefs on Oct. 16 laying out sharply different readings of the legal basis for the duties, according to a summary published by the trade newsletter Inside U.S. Trade. No ruling has been issued, and the hearing did not suspend collection. Coppersmith warned clients that a favorable decision would not automatically mean refunds for every importer, since outcomes could depend on the court's order, appeals and the status of individual entries.

How the duties hit Asian exporters

The tariffs rest on a July 23 presidential memorandum directing USTR to act under Section 301 of the Trade Act of 1974. That memorandum treats each partner's tariff as legally independent, Troutman said, so a court ruling against one country's duty should not automatically sink the others. That raises the chance of a split outcome.

The design differs by economy. For Japan, South Korea and Taiwan, the Section 301 rate is set so the ordinary most-favored-nation duty plus the new charge equals the cap. Where the ordinary duty already meets or exceeds the cap, nothing extra is owed. Goods covered by Section 232 national security tariffs, including metals, vehicles and parts, and semiconductors, are exempt, so the new duties do not stack on those. They do stack on existing Section 301 tariffs on China, according to logistics firm Dimerco's tracker.

Southeast Asia's exporters split into two tiers. Singapore, Thailand, the Philippines and Vietnam pay 12.5%, while Indonesia, Malaysia and Cambodia pay 10% with product exemptions, according to a legal update from regional law firm DFDL. Brunei, Laos, Myanmar and Timor-Leste are not covered. USTR also directed, where feasible, tariff-rate quotas for textiles and apparel from Cambodia, Indonesia and Malaysia tied to their use of U.S. inputs, but Kuehne+Nagel said those quotas had not yet been put in place, leaving the 10% rate on those goods for now. USTR added 471 product lines to its exemption list after public comments, Troutman said.

The forced-labor case is not the only Section 301 risk for the region. DFDL noted that a separate probe into "structural excess capacity," opened March 11, covers Cambodia, Indonesia, Malaysia, Singapore, Thailand and Vietnam and has not yet produced tariffs. Vietnam also faces an intellectual property investigation, covered in Capital Times' report on its Nov. 29 tariff deadline.

Refunds, and what comes next

Importers have a template for what a loss for the government could look like. U.S. Customs and Border Protection is still working through refunds of the IEEPA duties. Its "Phase 3" claims system accepted claims for 425,517 shipments in its first seven hours, according to an Oct. 6 CBP declaration, and the agency told the court in an Oct. 26 declaration that it would admit more importers on a rolling basis, according to summaries published by Inside U.S. Trade.

Any Section 301 refund would flow to the U.S. importer of record, not directly to Asian suppliers, though many exporters share tariff costs with buyers under contract terms. Coppersmith advised importers to tally duties paid since July 24 under the 9903.05 series of tariff headings and keep those records separate from other duties.

Earlier tariff rulings have not been final at the trade court level: its May decision against the temporary Section 122 duties is under appeal, Supply Chain Dive reported. The trade court has set no public date for its decision. The next fixed date for Asian exporters is Nov. 29, when the Vietnam intellectual property case reaches its deadline.