United States Economy Faces New Tariffs on 60 Trading Partners

The United States economy confronts fresh import duties ranging from 10% to 12.5% on goods from 60 trading partners including China, India, Japan, South Korea and the European Union, effective Friday, replacing temporary 10% levies that expired after a Supreme Court ruling struck down earlier duties. [1] [3]

New Tariffs Take Effect as Temporary Levies Expire

The United States said Thursday that it would impose new tariffs on 60 trading partners over forced labour concerns, replacing an expiring global duty. [1] The levies, which take effect Friday, range from 10 per cent to 12.5 per cent and impact major economies like China, India and the European Union. [1] The United States imposed late on Thursday a fresh wave of tariffs against 60 countries, including China, Japan, South Korea, India and European Union member states, hours before a temporary 10 per cent blanket levy was due to expire. [2] The tariffs, ranging from 10 to 12.5 per cent, affect countries accounting for 99% of US imports. [3] China faces a 12.5 per cent tariff rate, while Japan, South Korea, Switzerland and the European Union are subject to tariffs ranging from 10 per cent to 12.5 per cent. [2] Countries like Canada, Mexico, India, Indonesia and the United Kingdom face 10 per cent tariffs on top of their other US import levies. [2]

Rationale Centered on Forced Labour Concerns

"The United States has had a forced labour import ban for nearly a century, and rigorously enforces it; it's well past time for our trading partners to do the same," said US Trade Representative Jamieson Greer in unveiling the duties. [1] “Today’s action will begin to correct what is both a human rights abuse and distortive trade practice to improve the welfare of workers everywhere,” US Trade Representative Jamieson Greer said in a statement. [2] The tariffs stem from a Section 301 investigation into forced labour, with countries that have implemented prohibitions receiving the 10% rate and others hit with 12.5%. [1] [2] Economies that have implemented a forced labour prohibition are hit with the lower 10-per cent rate, including Canada, the EU and the United Kingdom, while others such as China and Japan receive the higher 12.5 per cent tariff. [1]

Legal Shift After Supreme Court Setback

The measures follow the Supreme Court invalidating tariffs imposed under the International Emergency Economic Powers Act, prompting the administration to use more durable legal authorities. [1] [3] After the legal setback, the administration tapped different authorities to reimpose a 10-per cent tariff on imports, but this only lasts 150 days and expires Friday. [1] The volley of new duties, initially proposed in June, will now take its place under Section 301 of the Trade Act of 1974. [1] Trump had turned to temporary levies after the Supreme Court struck down his biggest and boldest tariffs in February. [3] The new tariffs are considered more resistant to legal challenges than earlier moves. [1]

Exemptions and Ongoing Investigations

Exemptions apply to goods already subject to sector-specific tariffs such as steel and aluminium, as well as products qualifying under the US-Mexico-Canada Agreement. [1] Goods already facing sector-specific tariffs like steel and aluminium will not be impacted, and goods entering under the US-Mexico-Canada free trade pact will also be exempt. [1] Some products including oil and gas and fertiliser are exempt from the new tariffs. [3] Additional Section 301 probes into excess industrial capacity in 16 economies could lead to further duties, maintaining leverage over trading partners. [1] [2] Washington is separately investigating 16 economies over excess industrial capacity, in probes that could lead to additional duties, and another Section 301 investigation under the 1974 Trade Act is ongoing, focused on excess industrial capacity in 16 economies including mainland China, Taiwan, India, Japan, South Korea, Mexico, the European Union and several Southeast Asian countries. [1] [2]

Broader Trade Agenda and Expert Views

Recent separate tariffs include 25% on certain Brazilian goods and 50% on many Canadian products, signalling fragility in existing trade deals. [1] The latest salvo comes shortly after a separate 25-per cent tariff took effect on various Brazilian goods, with Washington accusing the Latin American giant of unfair trade practices after a yearlong investigation, and this week Trump also ordered new 50-per cent tariffs on many Canadian products. [1] The Trump administration's move to impose a baseline tariff while sustaining the threat of further duties ahead maintains leverage over its trading partners. [1] It also creates an incentive for countries to comply with trade pacts that they earlier struck. [1] In spending time on investigations, officials want their incoming tariffs to be robust if there are court challenges, said trade lawyer Greta Peisch. [1] "This makes it much more likely that they stay for the duration of Trump's term," signalling a "much more protectionist world's largest economy" moving forward, Josh Lipsky of the Atlantic Council think tank told AFP. [1] The Trump administration has been hunting for options that would allow it to aggressively deploy tariffs, said former US trade official Ryan Majerus. [1] In the longer term, Section 301 of the Trade Act of 1974 provides "more flexibility than people realise," Majerus said. [1] Once they are in place, officials can modify them based on new developments. [1] The Canadian tariffs taking effect in a month relied on an untested legal provision, showing that Trump has "other tools in the toolkit" to wield, said Lipsky, signalling that US tariff deals "are still fragile." [1]

Impact on Forced Labour and Human Rights

Human rights watchers say it is reasonable to be sceptical of the motivation behind the tariffs, but they say the levies could make an impact on the problem of forced labour. [3] "We've gone on record for years now advocating for import bans, not as a magic bullet, it's not a silver bullet, but as a potentially effective tool in combating forced labour across the globe," said Martina Vandenberg, founder and president of The Human Trafficking Legal Center. [3] "It's possible to be extremely critical of tariffs, as we are, and to be very concerned about blanket tariffs used as bludgeons against countries," she said. [3] "And yet I think it's undeniable that there is a significant response in terms of the adoption of import bans." [3] Vandenberg urged that the tariffs be implemented in a phased approach to give countries time to implement a ban or a plan for enforcement. [3] "Our concern is that the import bans will be thin slips of paper with no enforcement," she said. [3] "Countries need time to build import ban mechanisms that are meaningful and enforceable." [3] Kenya Davis, partner at Boies Schiller Flexner, said the Uyghur Forced Labor Prevention Act is the most significant legislation related to forced labour that the US had passed before the tariffs. [3] "The level of effectiveness is certainly up for debate, but it certainly has drawn attention to the issue of labour trafficking and forced labour," she said. [3] Isabelle Glimcher, senior research scientist for global labour at the NYU Stern Center for Human Rights, said one flaw in the tariffs is that they focus on levying the tax on countries based on goods they import – not goods they make domestically. [3] She said the impending tariff threat has spurred several countries such as India to amend their foreign trade policies to include a forced labour import ban. [3] European Union forced labour regulations due to come into effect later next year are also contributing. [3] "Not all of these things are necessarily or wholly attributable to the Section 301 investigations, but it does seem like countries are responding and starting to take all of this seriously," she said. [3]

What to watch next: Additional Section 301 probes into excess industrial capacity in 16 economies could lead to further duties.