Trump to impose 'forced labor' duties today as temporary 10% US tariffs expire
Under the final determination, the US will impose 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
Highlights:
- White House to impose tariffs of 10% and 12.5% on 60 trading partners
- Trump administration cites unfair trade practices statute to impose levies
- Many goods are exempt, including oil and gas, fertilizer and certain foodstuffs
- New duties cover 99.4% of all US imports
The Trump administration today (24 July) will impose new tariffs of 10% and 12.5% on goods from 60 trading partners, including the European Union, over allegations of lax enforcement of forced labor bans, just as a temporary 10% global tariff expires.
The move is the White House's latest effort to restore President Donald Trump's campaign vision of a near-global tariff after the US Supreme Court in February struck down his "reciprocal" duties of 10% to 50% imposed last year under a national emergencies law to try to shrink the US trade deficit.
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The new tariffs, announced yesterday in a Federal Register notice, will cover 99.4% of US imports, but include numerous product exemptions, such as oil and gas, fertilizer and certain food items.
Imposed under Section 301 of the Trade Act of 1974, the new duties allow the administration to maintain a tariff floor on virtually all US imports despite the Supreme Court setback. The tariffs are also likely to face less legal risk than those struck down in February, as Section 301 has survived prior court challenges.
Trump responded to the February Supreme Court ruling by imposing a temporary 10% tariff for 150 days that expires at 12:01am EDT today (0401 GMT). The new duties will take effect at that exact same moment, with goods in transit exempted until 12:01 am EDT on 28 July.
"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," US Trade Representative Jamieson Greer said in a statement. "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."
Greer has previously pledged that for countries that have reached trade deals with Washington that have capped US tariff rates, the new forced labor duties would not push them above those caps. The deals include anti-forced labor provisions.
Under the final determination, the US will impose 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.
The European Union, Taiwan, Japan, South Korea and Switzerland were assigned rates that, combined with pre-existing most-favored-nation tariff rates, would total 10% or 12.5%. The other 38 countries, including China, were assigned a 12.5% rate.
Similar rates, different tariff
"As expected, the forced labor tariffs largely replicate current tariff levels as negotiated in various reciprocal trade agreements, and replace the 10% tariffs under Section 122 that expire on Friday," said Tim Brightbill, a trade law partner with Wiley Rein in Washington.
A senior Trump administration official disputed suggestions that the forced labor tariffs were simply a direct replacement for the expiring levies despite the timing, similar duty rates and vast coverage of nearly all US imports.
The official said the US has stronger import bans on goods made with forced labor and enforces them more rigidly than any other country, giving rivals an unfair trading advantage over the US
Both Democrats and Republicans in Congress have been calling for the eradication of forced labor from global supply chains, "so we're really responding to that call," the official said.
The official added that Trump would "always use the tools at his disposal to achieve his trade policy objectives, and that includes tariffs."
Many goods will be exempted from the duties, including oil and gas, fertilizer, certain foodstuffs and goods that are already subject to Section 232 national security tariffs, such as autos, steel, aluminum and copper, the official said.
Other goods that comply with the US-Mexico-Canada Agreement on trade will also be exempted because of the highly integrated North American supply chain and high levels of US content in the goods.
The final Section 301 unfair trade practices tariffs largely track the forced labor duties proposed on June 1. Goods from countries that have passed adequate anti-forced labor laws will be levied at the lower 10% rate, and imports from those with inadequate bans will be subject to the higher 12.5% rate.
Recent actions and legislation by some countries, including India, moved them to the 10% tariff rate since the duties were first proposed.
After public hearings on the forced labor duties, the US Trade Representative's office also added some new exemptions, including for pig iron, certain sugar products, animal and seed products and certain chemicals.
