By David Lawder
WASHINGTON, July 24 (Reuters) – On Friday, the United States announced new tariffs of 10% and 12.5% on products from 60 trading partners, including the EU and China. This decision comes as a response to claims that these countries have not done enough to stop imports made using forced labor. This action coincides with the expiration of a temporary global tariff of 10%.
This is the White House's first move to reinstate the extensive tariff system that was largely established during President Donald Trump's administration. A Supreme Court ruling in February had nullified his previous “reciprocal” tariffs, which had ranged from 10% to 50%, aimed at reducing the U.S. trade deficit.
While new tariffs were anticipated, trade partners across the globe have strongly challenged the rationale behind these measures. However, some acknowledged that they would not significantly alter existing tariffs and could even indicate a small improvement.
As a result of the tariffs, bond yields have risen slightly due to increased inflation concerns, but financial markets’ reaction has been muted, with more focus being on conflicts in the Middle East.
The newly announced tariffs, detailed in a notice from the Federal Register, affect 99.4% of U.S. imports but come with various exemptions, such as for oil, gas, fertilizer, and certain food products.
The U.S. claims that its trading partners have not effectively restricted the influx of goods tied to forced labor passing through their supply chains, a claim denied by these countries.
“The United States has enforced a forced labor import ban for almost a century, and it’s time for our trading partners to do the same,” said U.S. Trade Representative Jamieson Greer. “Today’s action will help address both a human rights violation and a distortive trading practice to enhance worker welfare everywhere.”
These tariffs have been imposed under Section 301 of the Trade Act of 1974, allowing the administration to maintain tariff regulations on nearly all U.S. imports, despite the Supreme Court ruling. The use of Section 301 likely reduces potential legal challenges, as it has previously stood up to court scrutiny.
Trump's temporary 10% global tariff expired at 12:01 a.m. EDT on Friday (0401 GMT) after 150 days, and the new tariffs took effect at the same moment. Goods already in transit are exempt until 12:01 a.m. EDT on July 28.
TARIFF DETAILS
The U.S. has set a 10% tariff on goods from countries including Argentina, Bangladesh, Britain, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, and Trinidad and Tobago. These countries have either bans on forced labor imports or have indicated plans for such bans but have not effectively enforced them.
The European Union, Taiwan, Japan, South Korea, and Switzerland faced rates that, when combined with existing most-favored-nation tariff rates, amounted to 10% or 12.5%.
The remaining 38 countries, including Vietnam and China, were assigned a 12.5% rate. Vietnam recently issued new regulations detailing a ban on forced labor imports, while China has been accused by the U.S. of detaining Uyghur minorities in work camps, a claim that Beijing denies.
Greer had previously assured that countries with U.S. trade agreements would not see their tariff rates exceeded by the new forced labor duties. The European Union welcomed this assurance, stating it aligns with U.S. tariff commitments made in their joint statement.
French Trade Minister Nicolas Forissier commented that, despite legal concerns, the tariffs provide clearer guidelines for businesses.
The Swiss government, while disputing the allegations regarding forced labor, acknowledged that the U.S. is adhering to its past commitments concerning tariff limits, which in their case is 12.5%.
Ignacio Garcia Bercero, a former chief negotiator for the EU, noted that the U.S. appears to be trying to ensure the new tariffs comply with the agreed tariff terms in the EU-U.S. trade deal. However, he pointed out that further tariffs related to another Section 301 investigation are expected soon, targeting 16 trading partners, including the EU, China, India, Japan, South Korea, and Switzerland.
Britain, not targeted in this latest investigation, stated that the new tariffs would not have adverse effects for them. “Our agreement with the U.S. remains intact, and today we see an upgrade in our trading terms with zero tariffs on whisky and medical technology,” a government spokesperson said.
The British Chamber of Commerce described the new tariffs as a mixed bag, noting the positive removal of U.S. tariffs on whisky and a competitive rate for steel, but a loss of advantage compared to the EU and other nations for certain products.
WIDELY TELEGRAPHED MOVE WITH EXEMPTIONS
The announcement prompted strong protests from some trade partners.
China voiced its opposition to unilateral tariffs, stating that trade wars do not benefit anyone.
Officials from the Trump administration have informed their Chinese counterparts of plans to restore tariffs on Chinese goods to the agreed-upon level of 20%, which was settled in a trade agreement during a meeting with Chinese President Xi Jinping in November 2025, but will not exceed this rate. Previously, tariffs on Chinese goods had been reduced to 10% before Friday’s announcement, aside from the 25% tariffs imposed during Trump’s first term on industrial goods.
Australia and Brazil criticized the tariffs as unjustified, vowing to seek their removal. Norway also expressed that there was "no basis" for these tariffs. Canada, faced with new U.S. tariffs worth $20 billion on Monday, issued a more understated response.
“We will continue to engage constructively with the United States on this issue, as well as other outstanding matters, for the benefit of our citizens,” stated Dominic LeBlanc, Canada’s minister responsible for U.S. trade.
Kelly Ann Shaw, a former trade advisor during Trump’s first term, noted that the new tariffs were in line with what had been previously indicated, although there were some adjustments, including the addition of 471 products to an exempt list.
“In terms of economic impact, I think this is more of a status quo,” she said.
Many products will be exempt from these tariffs, including oil, gas, fertilizer, certain foods, and those already subject to Section 232 national security tariffs, such as autos, steel, aluminum, and copper, according to officials.