The United States (U.S) has imposed new tariffs of 10% and 12.5% on goods from 60 trading partners, including the EU and China, on the allegations that the affected countries failed to curb imports made by forced labour passing through their supply chains, after its temporary 10% global tariff expired.
The President Donald Trump administration’s temporary 10% global tariff expired at 12:01 a.m. EDT on Friday (0401 GMT) after 150 days and new duties took effect at that exact same moment, with goods in transit exempted until 12:01 a.m. EDT on July 28.
The tariffs imposition on Friday by the administration is its first step in efforts to rebuild the administration’s near-global tariff wall after the U.S. Supreme Court in February ruled against Trump’s “reciprocal” duties of 10% to 50% imposed last year under a national emergencies law to try close the U.S. trade deficit gap.
The new tariffs, announced in a Federal Register notice, cover 99.4% of U.S. imports, but include numerous product exemptions, such as oil and gas, fertilizer and certain food items.
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The U.S. Trade Representative Jamieson Greer stated: “The United States has had a forced labor import ban for nearly a century, and rigorously enforces it. It’s well past time for our trading partners to do the same.”
“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”, it added.
Imposed under Section 301 of the Trade Act of 1974, the new duties allow the administration to maintain a tariff floor on virtually all U.S. imports despite the Supreme Court setback, and the tariffs are also likely to face less legal risk as Section 301 has survived prior court challenges.
The U.S. imposed a 10% duty on goods of Argentina, Bangladesh, Britain, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, alleging that they had bans or plans to ban forced labor imports but are not effectively enforcing such prohibitions.
The European Union, Taiwan, Japan, South Korea and Switzerland were assigned rates that, combined with pre-existing most-favored-nation tariff rates, totaled 10% or 12.5%.
The other 38 countries were assigned a 12.5% rate. These include Vietnam, which issued a new decree this week that sets out more detailed rules banning imports of goods made with forced labor, and China – accused by the U.S. of detaining Uyghur minorities in work camps, which Beijing denies.
Commenting on the tariff order, Australian Trade Minister, Don Farrell, was quoted as saying that the imposition of new tariffs by the United States was completely unjustified, and that the government would continue to “argue very strongly” for U.S. trade officials to remove all duties on Australian goods.
Also, the Bank of France Governor, Emmanuel Moulin, was reported to have told BFM Business TV station that “for Europe, it ought not to change much because we have the Turnberry agreement which should be respected by Donald Trump. But obviously it creates more uncertainty for world trade and clearly it’s not favourable for growth.”
This is even as Reuters reported that the Government of Brazil stated: “Lacking a legal basis under domestic law to support its protectionist trade policy, the U.S. Trade Representative chose to manipulate an issue of great importance to human rights and workers’ rights movement.”
Describing the tariffs as arbitrary and unjustified, Brazil hinted that it would immediately initiate procedures to trigger the response instruments under its “Reciprocity Law” and will take the matter to the World Trade Organization’s (WTO’s) dispute settlement mechanism.
