The United States is advancing in the reconstruction of the tariff wall. The Department of Commerce intends to impose new tariffs ranging from 10% to 12.5% on dozens of countries following an investigation into alleged forced labor practices in the countries that sell products to these territories. The measure is the first serious initiative by the Donald Trump Administration to reactivate its tariff-based trade policy after the annulment of tariffs ordered in February by the US Supreme Court. Targeted by the new rates are 60 countries, including those of the EU, Mexico, the United Kingdom, China, India, and Japan.
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The measure could restart another small trade war at a time when the US has several open fronts on the global geopolitical board, with the Iran war and the energy price escalation.
Washington accuses them of not having done enough to prevent the import of products made with forced labor. The US Trade Representative’s office stated in a note published Tuesday night that this has caused American workers to “compete globally on unequal terms.” “It is unacceptable that our most important trading partners do not address the import of products made with forced labor,” said Jamieson Greer on Tuesday night when presenting the proposal, according to a statement.
After the resounding blow dealt by the Supreme Court to Trump’s tariff policy earlier this year, the White House approved generalized 10% import tariffs based on a provision of the 1974 Trade Act that requires congressional ratification. In parallel, the trade office launched a series of investigations into the non-compliance of dozens of countries importing products from countries or companies that did not respect forced labor rules. US authorities found in Article 301 of the cited trade law the legal loophole to maintain their tariff policy regardless of judges and Congress.
These tariffs will not take effect immediately. The rule provides for a period of public consultation and claims that may lead to some changes. It is expected that Congress will not validate the generalized tariffs approved by Donald Trump after the Supreme Court setback. So the US Administration will have to adjust the timelines to avoid a period of tax vacuum.
The Department of Commerce also maintains other parallel investigations based on Article 301. They analyze whether some trading partners maintain excess production capacity, a practice that would also harm US interests. The results of this investigation are expected to be known in the coming weeks. Article 301 allows imposing rates of up to 15%, so analysts do not rule out that tariffs subject to this second investigation will accumulate alongside those of the first forced labor case.
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The EU has responded immediately to the measure—which is based on US regulations on the import of goods made with forced labor—and has stated that it expects Washington to respect the tariff agreement it signed last July and is about to definitively approve after several delays. The pact, agreed to avoid 25% customs tariffs on all European products entering the US, stipulates that the community club would eliminate tariffs on US industrial products, while Washington agreed to limit its tariffs on most products to 15%. The EU is about to definitively approve the pact.
The European Commission, which has trade competencies for the 27 countries, has hinted that the measure is a covert way to reimpose tariffs and that this violates the pact signed between Donald Trump and the head of the European Executive, Ursula von der Leyen. That is the reading in Europe: that the White House is trying to rebuild its tariff trade policy at all costs.
“The Commission will carefully analyze the preliminary findings of the investigation and will continue to collaborate with the US Administration. That said, the EU considers the tariffs imposed for these reasons unjustified,” Brussels states in a communiqué, detailing European regulations to prohibit marketing in the European market of any product made with forced labor.
The latest tariff proposal would allow Trump to bypass the limitations previously imposed by the courts on his protectionist agenda and comes just weeks before the fixed 10% tariff imposed by the White House on dozens of countries after the defeat of the trade policy in the Supreme Court expires.
