Trump revives global tariffs at 12.5% after court strikes down levies

President Donald Trump imposed tariffs of as much as 12.5% on goods from 60 trading partners Friday, reviving his trade war under a new legal authority hours after the Supreme Court struck down his original levies.

"This is the most sweeping international labor rights action the United States has ever taken, that any country has ever taken," a senior administration official told reporters Thursday.

The duties, issued under Section 301 of the Trade Act of 1974, affect roughly 99% of U.S. trade, according to U.S. Trade Representative Jamieson Greer. Most countries face 12.5% tariffs, including China and Vietnam, while 17 nations including the United Kingdom, Canada and Mexico face a lower 10% rate. The European Union faces additional levies to bring its total most-favored-nation rate to either 10% or 12.5%. Goods that comply with the USMCA trade deal, along with oil, gas and steel already covered by sector-specific tariffs, are exempt.

The new system replaces the 10% global levies imposed under Section 122 of the 1974 Trade Act, which expired at 12:01 a.m. Friday. Unlike those time-limited duties, Section 301 tariffs can last indefinitely — and trade experts say they are far more likely to survive legal challenges. The question now is whether they will achieve Trump's goal of reviving U.S. manufacturing or simply raise costs for consumers, as two-thirds of voters already say tariffs have done.

A Legal Workaround Built for Durability

The Supreme Court's Feb. 20 ruling struck down Trump's original tariff regime under the International Emergency Economic Powers Act, finding the 1977 law did not authorize the president to impose sweeping duties on foreign goods. The decision eliminated the majority of U.S. tariff revenue collected last year and forced the administration to scramble for alternative legal footing.

Trump responded within hours, ordering 10% tariffs under Section 122 — a provision that allows the president to address balance-of-payment issues but expires after 150 days. That deadline arrived Friday. The new Section 301 tariffs, by contrast, follow a formal investigation by Greer's office and carry no automatic expiration date.

"The expectation is continuity," said Blake Harden, managing director at Washington Council Ernst & Young. "We're really seeing a re-creation of that global tariff, and 301 being used as a way to lock that in."

The administration argues the tariffs target forced labor practices that give foreign producers an unfair cost advantage. Countries that already have forced-labor import bans — including the EU, whose own prohibition takes effect late next year — were still hit with duties because they have "failed to effectively enforce" their rules, the administration said.

Beyond the 301 Regime: Canada and Brazil

The forced-labor tariffs are not the only new trade action. On Monday, Trump signed proclamations imposing 50% duties on nearly $20 billion of Canadian goods under Section 338 of the 1930 Tariff Act, a rarely used authority. Those levies, effective Aug. 19, target Canadian wine, beer, hockey sticks, cement and dog leashes in retaliation for Ottawa's retaliatory tariffs on U.S. steel, aluminum, liquor, dairy and autos.

Canadian Prime Minister Mark Carney said the 50% tariffs violate the USMCA and that he and Trump agreed Tuesday to intensify trade negotiations. The USMCA, which governs nearly $1.6 trillion in annual trade, was not extended this month and now faces yearly reviews.

Separately, a 25% tariff on Brazilian goods took effect Wednesday, covering thousands of products including ethanol and affecting roughly $10 billion in trade — about one-fifth of Brazil's total exports to the U.S. That action also used Section 301 authority.

The administration is conducting additional Section 301 investigations into whether more than a dozen countries have built up excess manufacturing capacity, a probe that could trigger further tariffs. One such investigation already led to the 25% levy on Brazil announced this week.

"The president is not going to allow his trade policy and overall objectives to be undermined simply because one tool may be limited by a court," the senior administration official said Thursday. "We are going to get at these trade policies and practices."

The last time the U.S. imposed tariffs at this scale — Trump's original IEEPA-based regime in 2025 — the S&P 500 fell as much as 8% in the weeks following "liberation day" before the administration paused and repeatedly adjusted the levies. The new Section 301 tariffs, with their stronger legal foundation and forced-labor rationale, may prove harder to reverse. Tiffany Smith, vice president of global trade policy at the National Foreign Trade Council, said it would be "much harder" for a future administration to roll back tariffs framed as a human rights measure.

This article is for informational purposes only and does not constitute investment advice.