The United States has introduced new tariffs ranging from 10% to 12.5% on imports from 60 trading partners, including the European Union, China, India, Japan, and South Korea. The move, announced on Friday, represents the Trump administration's first major effort to rebuild its tariff framework after the Supreme Court struck down earlier reciprocal duties earlier this year.
The new measures, enacted under Section 301 of the Trade Act of 1974, replace a temporary universal 10% tariff that expired at 12:01 a.m. EDT on Friday. They cover 99.4% of US imports, though exemptions remain for energy, fertilizers, aircraft, certain food items, and critical minerals.
Legal Shift After Supreme Court Setback
The Supreme Court had previously ruled that Trump's 'Liberation Day' tariffs, imposed under emergency powers, exceeded presidential authority, stating that Congress holds primary responsibility for trade policy during peacetime. In response, the administration pivoted to Section 301, which permits tariffs following investigations into unfair foreign trade practices affecting US commerce.
US Trade Representative Jamieson Greer defended the new tariffs, arguing that many trading partners have failed to adequately prevent goods produced through forced labor from entering global supply chains. '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. He added that the tariffs aim to address both human rights concerns and trade distortions.
Tariff Tiers and Country Assignments
Unlike the previous reciprocal tariffs, which reached as high as 50%, the new duties generally fall between 10% and 12.5%. Countries such as Argentina, Bangladesh, Britain, Canada, India, Indonesia, Mexico, and Pakistan were placed in the 10% tier, with the administration citing inadequate enforcement of forced labor import bans. The European Union, Taiwan, Japan, South Korea, and Switzerland were assigned rates that, combined with existing most-favored-nation duties, total either 10% or 12.5%. Another 38 countries, including Vietnam and China, were placed in the higher 12.5% tier.
China continues to reject US allegations that products linked to forced labor from Xinjiang enter international markets, calling the claims politically motivated. The White House confirmed that goods already subject to separate national security tariffs—such as automobiles, steel, aluminum, and copper—will not face additional levies under this announcement. Imports already in transit before Friday's implementation remain exempt until July 28.
Refund Data and Economic Impact
Treasury data shows the government has refunded approximately $81 billion in tariffs during the current fiscal year, which began in October 2025, a sharp increase from roughly $5 billion in the same period a year earlier. This refund surge reflects the legal uncertainty surrounding the previous tariff regime.
The new tariffs come amid broader market adjustments. The dollar steadied near 101.40 as traders weighed the implications of the new measures alongside Middle East tensions. Meanwhile, cross-border shocks have been felt in specific sectors, as seen in the impact on Canadian companies like GM and Magna.
Legal and Political Reactions
Legal experts have questioned the durability of the new policy. Caroline Freund, a US trade expert, argued that the move is primarily about preserving Trump's tariff agenda rather than addressing labor standards. 'It is not about forced labour,' she said, adding that the administration is searching for an alternative legal basis after losing its earlier court battle.
Alan Wolff, senior fellow at the Peterson Institute for International Economics and former deputy director-general of the World Trade Organization, also questioned the legality. 'If they were challenged in court, the Supreme Court would likely overturn them,' he wrote. The Peterson Institute similarly argued that the investigation functions less as a labor standards initiative than as a mechanism to recreate the tariff structure invalidated earlier this year.
Trading partners have reacted with caution. China reiterated its opposition to unilateral tariffs, saying trade disputes benefit no one. The European Commission noted that the new tariff structure broadly respects commitments made under a recent EU-US joint statement. France acknowledged questions about the legal basis but suggested the announcement provides businesses with greater clarity. Switzerland disputed the forced labor allegations while welcoming Washington's adherence to previous agreements.
This article is for informational purposes only and does not constitute financial advice.
