US enacts new tariffs on 60 trading partners following legal setback

A new wave of US tariffs targeting 60 trading partners came into effect today (July 24).

The new tariffs replace a global duty introduced earlier this year by President Donald Trump, which was set to expire.

The tariffs range between 10% and 12.5%, impacting major economies such as China, India, and the European Union.

“The US has prohibited the importation of goods produced with forced labor for nearly a century and rigorously enforces that prohibition; it is long past time for our trading partners to do the same,” US Trade Representative Jamieson Greer said.

Greer previously added that the targeted economies account for the majority of US trade.

Following a Supreme Court decision in February that struck down a series of tariffs imposed by the President—delivering a blow to the President’s ability to levy high tariffs at will—the Trump administration moved swiftly to rebuild the President’s “tariff wall.”

After that setback, Trump invoked different legal authorities to reimpose a 10% duty on imports. However, that measure lasted only 150 days and expired today.

The new series of tariffs, initially proposed in June, is now coming into force.

These measures were planned following months of investigation and are considered more resilient to legal challenges compared to previous actions.

According to Thursday’s announcement, a lower rate of 10% will apply to economies that prohibit or commit to prohibiting the import of goods produced using forced labor.

These include Canada, the EU, India, and the United Kingdom.

China, Japan, South Korea, and dozens of other nations have been subjected to a higher tariff rate of 12.5%.

However, the EU, Taiwan, Japan, South Korea, and Switzerland will benefit from certain exemptions under trade agreements previously signed with the US.

The new tariffs were immediately condemned by target countries. Japan stated it found the duties “regrettable,” while the Australian trade minister described them as “unfair.”

Goods already subject to sector-specific tariffs, such as steel and aluminum, will not be affected.

A US official told reporters that specific energy products and fertilizers, as well as goods covered under the US-Mexico-Canada free trade agreement, will also be exempt.

Washington is separately investigating 16 economies over “excess industrial capacity,” inquiries that could lead to additional tariffs.

Experts warn that this could ultimately result in differing rates across countries.

Trade lawyer Greta Peisch told AFP that the Trump administration’s move to implement a baseline tariff while maintaining the threat of additional duties preserves its leverage over trading partners.

Peisch added that this also creates an incentive for countries to comply with previously signed trade agreements.

By taking time for investigations, officials want to ensure that the tariffs imposed are robust in the event of court challenges.

Peisch is a former general counsel at the Office of the US Trade Representative and currently serves as a partner at Wiley Rein.

Josh Lipsky of the Atlantic Council told AFP, “This makes it much more likely that tariffs will remain in place throughout Trump’s term,” pointing to a “much more protectionist global economy” ahead.

Lipsky added that the reimposition of tariffs also increases government revenues.

Former US trade official Ryan Majerus said the Trump administration is seeking options that will allow it to aggressively enforce tariffs.

Majerus noted that, in the long run, Section 301 of the Trade Act of 1974, which Greer invoked to apply the latest tariffs, offers “more flexibility than people realize.”

Majerus, now a partner at King & Spalding, added that once the tariffs are in place, officials can modify them based on new developments.

This latest move comes shortly after a 25% tariff on various Brazilian goods took effect after Washington accused the Latin American giant of unfair trade practices.

This week, Trump also ordered new 50% tariffs on many Canadian products, citing Ottawa’s “discriminatory treatment” of American alcoholic beverages, automobiles, and dairy products.

Lipsky noted that the Canadian tariffs, set to take effect in a month, are based on an untested legal provision, demonstrating that Trump possesses other tools he can rapidly deploy.

This situation indicates that US tariff agreements remain “fragile.”

Nevertheless, the EU, which has signed a trade deal, expects Washington to “abide by the commitments set out in the EU-US Joint Statement.”