Key Takeaways:
The Trump administration replaced expiring emergency tariffs with levies of as much as 12.5% on more than 60 economies, a move trading partners and analysts say is less about labor standards than about reshaping global trade rules.
The US imposed tariffs of 10% or 12.5% on imports from more than 60 trading partners effective 12:01 a.m. Friday, citing failures to enforce bans on forced-labor goods, as the legal basis for President Donald Trump's earlier emergency levies expired.
"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. The tariffs follow a months-long investigation and public hearings under Section 301 of the Trade Act of 1974.
The 10% rate applies to nations that have made commitments to enforce forced-labor import prohibitions, including the European Union, Canada, India, Mexico and the United Kingdom. The 12.5% rate targets those that have not, including China, Japan, Australia, Brazil, South Korea, Vietnam, Saudi Arabia and Russia. Exemptions include goods already subject to steel and aluminum tariffs and products already loaded onto vessels before the effective date.
The new duties replace the temporary 10% global tariff Trump imposed under Section 122 of the Trade Act of 1974 after the Supreme Court in February ruled his earlier emergency tariffs unlawful. That temporary authority expired at 12:01 a.m. Friday. The government is in the midst of refunding $166 billion to companies that paid tariffs later ruled illegal, with Customs and Border Protection having processed about $85 billion through May.
A rationale under scrutiny
Several US trading partners publicly rejected the forced-labor justification. The European Commission called the tariffs unjustified, reiterating its commitment to the Turnberry deal that capped tariff rates on most EU goods at 15%. Vietnam's foreign ministry said the country strictly prohibits forced labor and complies with International Labor Organization regulations. The International Chamber of Commerce's Deputy Secretary-General Andrew Wilson said the "arbitrary nature" of the tariffs was a cause for concern.
Analysts said the investigation's true purpose may extend beyond labor standards. "They believe they'll be able to stick indefinitely," Dave Townsend, a partner at Dorsey & Whitney representing foreign clients in trade litigation, told USA TODAY, referring to the administration's strategy of finding durable legal footing for tariffs after the Supreme Court setback.
The Committee for a Responsible Federal Budget projects the forced-labor tariffs could generate nearly $1 trillion over a decade, roughly half the revenue the invalidated emergency tariffs were expected to produce. Scott Lincicome, vice president of general economics at the Cato Institute, said other levies — including those on steel, aluminum and automobiles — could make up the difference. Greer also continues to investigate whether 16 countries produced more than they needed to burden or restrict US commerce.
Legal durability and market impact
The new tariffs are likely to face legal challenges. Alan Wolff, a senior fellow at the Peterson Institute for International Economics and former deputy director-general of the World Trade Organization, wrote that the "new tariffs would represent another case of presidential overreach" and that the Supreme Court would likely overturn them if challenged. However, Lincicome said that as long as the administration has checked procedural boxes, courts are more likely to uphold the duties.
The New York Federal Reserve estimated that 90% of the economic burden from tariffs is passed on to US consumers and businesses. A Harris Poll survey found 72% of Americans believe tariffs have had a negative impact on consumers, including 64% of Republican voters. The previous 10% emergency tariffs, imposed in April 2025, affected more than 90 countries before the Supreme Court invalidated them.
The last time the US imposed broad tariffs under Section 301 — during Trump's first term on $370 billion of Chinese goods — bilateral trade with China contracted by roughly 15% over the following 12 months, according to Census Bureau data. The current average US tariff on Chinese goods already exceeds 30% after multiple escalation rounds, and the new 12.5% levy adds to that cumulative burden.
This article is for informational purposes only and does not constitute investment advice.
