By Staff Reporter
ISLAMABAD: The Trump administration imposed fresh tariffs of 10% to 12.5% on goods from 60 trading partners on Friday, invoking allegations that these countries have failed to adequately police forced labor in their supply chains, a levy that takes effect just as a temporary global tariff lapses.
The new duties, unveiled Thursday in a Federal Register notice, target countries including Pakistan, the European Union and China, and mark the White House’s latest attempt to preserve a near-universal tariff structure after the Supreme Court in February struck down the administration’s earlier “reciprocal” tariffs, which had ranged from 10% to 50%. Those levies, imposed last year under a national emergencies statute, were designed to narrow the US trade deficit.
The replacement tariffs, invoked under Section 301 of the Trade Act of 1974, cover 99.4% of US imports, according to the notice, though the administration carved out exemptions for oil and gas, fertilizer, certain food products, and other categories. The legal basis is considered more durable than the emergency powers cited in the earlier tariffs, since Section 301 has withstood previous court challenges.
The new duties took effect at 12:01 a.m. EDT Friday — the identical moment Trump’s temporary 10% global tariff expired after a 150-day run imposed in response to the Supreme Court’s February ruling. Goods already in transit will be exempted from the new tariffs until 12:01 a.m. EDT on July 28.
US Trade Representative Jamieson Greer framed the action as an enforcement gap correction rather than a workaround for the expiring tariff. “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,” Greer said in a statement. He added that the action would “begin to correct what is both a human rights abuse and distortive trade practice to improve the welfare of workers everywhere,” and said he was encouraged by partners that had moved to adopt their own forced-labor import prohibitions.
Greer has previously indicated that trading partners with existing tariff-cap agreements with Washington will not see the new forced-labor duties push their overall rates above those negotiated ceilings.
Argentina, Bangladesh, Britain, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka and Trinidad and Tobago will face a 10% duty under the determination.
The European Union, Taiwan, Japan, South Korea and Switzerland were assigned rates that, layered atop existing most-favored-nation tariffs, bring their combined totals to 10% or 12.5%.
The remaining 38 countries were assigned a flat 12.5% rate. That group includes Vietnam, which issued a decree this week detailing new rules banning imports of forced-labor goods, and China, which the US has accused of detaining Uyghur minorities in internment camps — an allegation Beijing denies.
Separately, Trump administration officials have told their Chinese counterparts they intend to raise second-term tariffs on Chinese goods back to the 20% level agreed under a November 2025 trade truce with President Xi Jinping, without exceeding that threshold. Ahead of Friday’s action, China’s tariff rate had eased to 10%, a figure that excludes the 25% levy imposed on industrial goods during Trump’s first term.
A senior Trump administration official rejected characterizations of the forced-labor tariffs as a direct substitute for the expiring levy, despite the overlapping timing, comparable rates and near-total coverage of US imports. The official argued that US import bans on forced-labor goods are stronger and more rigorously enforced than those of any other country, putting American businesses at a competitive disadvantage. The official also pointed to bipartisan pressure in Congress to root out forced labor from global supply chains as a driver of the policy.
Goods already covered by Section 232 national security tariffs — including autos, steel, aluminum and copper — will be exempted from the new duties, the official said, as will aircraft and parts, and critical minerals. Products compliant with the US-Mexico-Canada Agreement will also be exempted, reflecting the deep integration of North American supply chains and the high share of US content in those goods.
Trade attorneys said the Section 301 basis for the new tariffs positions them to survive legal challenges more easily than the emergency-powers tariffs the Supreme Court rejected in February. Ryan Majerus, a trade lawyer and former Commerce Department official now a partner at King and Spalding, said the new tariffs could be harder to challenge in court because Section 301 has withstood past challenges and some judges may be reluctant to block actions aimed at curbing forced labor.
“Once the 301 duties are placed, they have a lot of flexibility to adjust them,” Majerus said. “It’s a sledgehammer. It’s also intended to keep the 10% baseline in place, and they think they’re well protected when this goes to court.”
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 final tariffs largely matched what had been signaled in advance, with some adjustments — including roughly 471 additional products added to an exclusion list. “I think this is more status quo in terms of the economic impact,” she said, noting that partners such as the EU had negotiated tariff caps that would keep their new rates below levels set under earlier agreements.
The tariffs drew swift objections from several affected governments. European Union foreign policy chief Kaja Kallas, speaking to Reuters on the sidelines of ASEAN meetings in Manila, said the bloc viewed the move as a shock and disputed the administration’s rationale. “If you compare our labour laws to the ones of the United States, I mean, we have paid vacations, we have very good labour conditions for our employees, so it’s not really grounded,” she said.
Norway’s Foreign Minister Espen Barth Eide said “there is no basis for this tariff against Norway because we already have clear rules that are intended to prevent trade in goods produced using forced labor.”
Australia and Brazil called the tariffs unjustified and said they would push for their removal. Canada, which was hit Monday with separate new US tariffs on $20 billion worth of goods, offered a restrained response to what it termed a unilateral action. “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 US trade.
The announcement rattled sovereign debt markets in several affected countries. Pakistan’s international bonds slid 0.5% Friday, with its 2036 issuance falling to bid at 97.80 cents. Indonesia’s 2045 maturity registered matching losses, also bid at 88.48 cents. Sri Lanka’s 2033 maturity dropped just over a cent to bid at 93.05 cents on the dollar — notable given that the US is Sri Lanka’s largest single export market, absorbing roughly $3 billion in shipments annually, most of it apparel.
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