President Trump’s new tariffs will take effect just as the worldwide temporary 10% tariffs expire at 12:01 a.m. on July 24. (Alex Brandon/Associated Press)
key takeaways:
- President Donald Trump imposed 10% to 12.5% Section 301 tariffs on imports from 60 countries as the temporary worldwide tariffs are set to expire on July 24.
- The tariffs affect countries representing 99% of US imports and were introduced after the Supreme Court struck down sweeping tariffs imposed under the IEEPA.
- The US Trade Representative is investigating 16 countries for alleged overproduction, while rights advocates say enforcement and transparency will determine the impact of the tariffs.
President Donald Trump is moving forward with new double-digit tariffs on dozens of US trading partners as the clock on the stopgap levy imposed after a crushing defeat at the Supreme Court expires on July 24.
The United States will impose taxes ranging from 10% to 12.5% on imports from 60 countries that account for 99% of US imports, accusing them of inadequately enforcing restrictions on goods produced by forced labor.
The new tariffs will take effect just as the worldwide temporary 10% tariffs expire at 12:01 a.m. on July 24. Trump turned to those temporary tariffs after the Supreme Court struck down his biggest and boldest tariffs in February.
Now he is touting more durable tariffs under Section 301 of the Trade Act of 1974, which allows the president to impose import taxes and other sanctions against countries found to engage in “unfair,” “unfair” or “discriminatory” trade practices. Trump used Section 301 to impose major tariffs on China in his first term and survived court challenges.
More Section 301 tariffs likely to come: The Office of the US Trade Representative has launched an investigation into whether 16 countries – which account for 70% of US imports – have overproduced goods, driving down prices and hurting US companies in global markets. The administration has not yet completed that investigation.
Trump, who argues that higher tariffs would revive American manufacturing, last year reversed decades of US policy that had always favored low tariffs and free trade. Invoking the International Emergency Economic Powers Act of 1977, he imposed double-digit tariffs on imports from nearly every country on earth, and said America’s long-running trade deficit amounted to a national emergency.
But the Supreme Court ruled that IEEPA did not authorize the tariffs. The decision forced the administration to pay refunds to importers who had paid the tariffs.
In response, Trump announced a worldwide 10% tariff under Section 122 of the Trade Act of 1974. But he can avail Section 122 levy only for 150 days; His time expires on July 24.
The administration initially proposed forced labor charges last month. Since then, some countries have tightened forced labor enforcement and are eligible for lower tariffs, a senior administration official said on condition of anonymity. For example, the official said, duty on imports from India was initially set at 12.5%, but will now be 10%.
Some products – including oil and gas and fertilizers – are exempted from the new tariffs announced on July 23. Also exempted are products that qualify for duty-free status under the US-Mexico-Canada Agreement, the North American trade deal that Trump negotiated in his first term.
A containership at the Port of Los Angeles. (Kyle Grillot/Bloomberg)
Tariffs are paid by companies in the United States that import foreign products. Importers usually try to pass on the costs by charging higher prices to consumers. Americans are already frustrated with the high cost of living. So the administration is taking a risk imposing new tariffs before the November 3 midterm elections.
Human rights watchdogs say it is reasonable to be skeptical of the motivations behind the tariffs. But he says the levy could impact the problem of forced labour.
Forced labor is defined by the International Labor Organization’s Forced Labor Convention of 1930 as “all work or service which is exacted from any person under threat of any penalty and to which the said person has not voluntarily offered himself.”
According to the latest data from the ILO, the UN agency focused on human and labor rights, about 27.6 million people were in forced labor around the world on any given day in 2021.
“We have been advocating for import bans for years, not as a magic bullet, nor as a silver bullet, but as a potentially effective tool in combating forced labor around the world,” said Martina Vandenberg, founder and president of The Human Trafficking Legal Center.
“It’s possible to be overly critical of tariffs, as we are, and to be very concerned about blanket tariffs being used as an attack against countries,” he said. “And yet I think it’s undeniable that there is a significant response in terms of adopting import restrictions.”
However Vandenberg and his organization urged in testimony that the tariffs be implemented in a phased manner to give countries time to implement sanctions or enforcement plans.
“Our concern is that import restrictions will remain just thin slips of paper without any enforcement,” he said. “Countries need time to create meaningful and enforceable import restriction mechanisms.”
The Uyghur Forced Labor Prevention Act, a US federal law passed in 2021 that bans the import of goods manufactured in whole or in part in China’s Xinjiang region or by designated entities, is the most significant forced labor-related legislation the US has passed prior to the tariffs, said Kenya Davis, partner at Boies Schiller Flexner.
“The level of effectiveness is certainly debatable, but it has certainly drawn attention to the issue of labor trafficking and forced labour,” he said. “And so, if nothing else, these import restrictions will serve to bring greater awareness to forced labor.”
But without a “comprehensive approach” that provides transparency about who is involved in investigations, and programs that provide assistance to countries in implementing sanctions, “I am very cautious in my enthusiasm about (tariffs),” he said.
Isabelle Gleicher, senior research scientist for global labor at the NYU Stern Center for Human Rights, said one flaw with tariffs is that they focus on taxing countries based on the goods they import — not the goods they make domestically.
But he said the threat of impending tariffs has prompted many countries like India to amend their foreign trade policies to include forced labor import restrictions. He said EU forced labor rules set to come into force late next year are also contributing.
“All of these things don’t necessarily or completely warrant a Section 301 investigation, but (it) seems like countries are reacting and starting to take all of this seriously,” he said.
