Source Credit : Portfolio Prints
The United States on Friday imposed new tariffs of 10% and 12.5% on imports from 60 trading partners, including the European Union and China, alleging those countries had failed to adequately prevent goods made with forced labor from entering global supply chains. The move coincided with the expiration of a temporary 10% global tariff that had been in place for 150 days.
The tariffs mark the Trump administration’s first major effort to rebuild its broad tariff framework after the U.S. Supreme Court struck down President Donald Trump’s “reciprocal” tariffs earlier this year. Those duties, ranging from 10% to 50%, had been imposed under emergency powers as part of an effort to reduce the U.S. trade deficit.
While the announcement was widely anticipated, trading partners strongly rejected the rationale behind the new measures. Some governments argued the allegations were unfounded, while others noted that the latest tariffs would have little practical impact on existing trade arrangements and, in some cases, even represented a modest improvement.
Financial markets reacted cautiously. U.S. bond yields edged higher amid concerns that the tariffs could add to inflationary pressures, though broader market attention remained focused on developments in the Middle East.
According to a Federal Register notice, the tariffs cover approximately 99.4% of U.S. imports but include exemptions for a range of products, including oil and gas, fertilizers, certain food products, aircraft and parts, and critical minerals.
Washington argues that many trading partners have failed to effectively police forced-labor practices within their supply chains. The affected countries have broadly rejected those claims.
“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,” U.S. Trade Representative Jamieson Greer said in a statement.
“Today’s action will begin to correct what is both a human rights abuse and a distortive trade practice, improving the welfare of workers everywhere,” he added.
The tariffs were imposed under Section 301 of the Trade Act of 1974, providing the administration with an alternative legal pathway to maintain a baseline tariff structure following the Supreme Court’s ruling. Unlike the earlier emergency-based tariffs, Section 301 measures have historically survived judicial scrutiny, making them less vulnerable to legal challenges.
The temporary 10% global tariff officially expired at 12:01 a.m. EDT on Friday, and the new duties took effect immediately. Goods already in transit will remain exempt until July 28.
Countries including Argentina, Bangladesh, Britain, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, and Trinidad and Tobago were assigned a 10% tariff. The U.S. said these countries either have bans on forced-labor imports or plans to introduce them but have not effectively enforced those measures.
The European Union, Taiwan, Japan, South Korea, and Switzerland received rates that, when combined with existing most-favored-nation tariffs, amount to effective rates of either 10% or 12.5%.
The remaining 38 countries were assigned a 12.5% tariff. Among them are Vietnam and China. Vietnam recently strengthened its regulations governing imports linked to forced labor, while China continues to reject U.S. allegations regarding the treatment of Uyghur minorities and the use of forced labor in Xinjiang.
Greer had previously indicated that countries with existing trade agreements limiting U.S. tariff levels would not face rates exceeding those negotiated caps. European officials highlighted that commitment in their response.
“The EU notes positively the fact that this outcome is in line with the U.S. tariff commitments agreed under the EU-U.S. Joint Statement,” a European Commission spokesperson said, adding that the decision created “positive momentum” for further discussions on tariff exemptions and broader trade cooperation.
French Trade Minister Nicolas Forissier said the legal basis for the tariffs remained questionable but acknowledged that the move provided businesses with greater certainty regarding future trade conditions.
Switzerland also challenged the allegations underpinning the investigation while noting that Washington had respected previously agreed tariff ceilings.
Ignacio García Bercero, the EU’s former chief trade negotiator and now a senior fellow at Bruegel, said the United States had sought to align the new measures with existing EU-U.S. trade commitments. However, he warned that further tariffs could emerge from a separate Section 301 investigation into industrial overcapacity involving 16 trading partners, including the EU, China, India, Japan, South Korea, and Switzerland.
Britain, which is not part of that second investigation, said the latest measures would not negatively affect its trade relationship with Washington.
“Our agreement with the U.S. remains in place, and today we see an improvement to our trading terms with zero tariffs on whisky and medical technology,” a British government spokesperson said.
The British Chambers of Commerce described the outcome as mixed. While welcoming the removal of tariffs on whisky and relatively favorable treatment for steel exports, it noted that British exporters had lost some competitive advantages compared with businesses in the EU and other markets.
China responded more forcefully, reiterating its opposition to unilateral tariffs and arguing that trade wars benefit no one.
Trump administration officials have reportedly told Chinese counterparts that Washington intends to restore tariffs on Chinese goods to the 20% level agreed under the November 2025 trade truce between President Trump and Chinese President Xi Jinping, but not exceed that threshold. Prior to Friday’s announcement, China’s tariff rate had fallen to 10%, excluding separate first-term tariffs on industrial products.
Australia and Brazil described the new measures as unjustified and said they would seek their removal. Norway stated there was “no basis” for the tariffs, while Canada—already facing additional U.S. tariffs announced earlier this week—offered a more measured response.
“We will continue engaging constructively with the United States on this matter, as well as other outstanding issues, over the coming weeks to the mutual benefit of our citizens,” said Dominic LeBlanc, Canada’s minister responsible for U.S. trade relations.
Kelly Ann Shaw, a former White House trade adviser during Trump’s first term and now a partner at Akin Gump Strauss Hauer & Feld, said the announcement largely reflected what markets had expected, though several changes had been made, including the addition of 471 products to the exemption list.
“I think this is more status quo in terms of the economic impact,” Shaw said.
Among the products exempted from the new duties are oil and gas, fertilizers, certain food products, goods already subject to Section 232 national-security tariffs—including automobiles, steel, aluminum, and copper—as well as aircraft components and critical minerals.
Some industries emerged as clear beneficiaries. The Antwerp World Diamond Centre welcomed the restoration of a tariff exemption for polished diamonds, calling it a significant development for Belgium’s diamond sector. Belgium exported approximately $2.1 billion worth of polished diamonds to the United States in 2024. The exemption had lapsed following the Supreme Court’s February ruling that invalidated Trump’s earlier global tariffs.
