Photo: Kevin Dietsch / Getty Images News / Getty Images
President Trump has announced a new wave of tariffs that will take effect at midnight tonight, replacing the expiring 10% temporary tariffs. These new tariffs, ranging from 10% to 12.5%, will affect 60 countries, including key trading partners such as the European Union, Canada, Mexico, India, and the United Kingdom. The tariffs are linked to imports of goods made with forced labor.
The U.S. Trade Representative's office stated that the tariffs will be implemented under Section 301 of the Trade Act of 1974. This follows a Supreme Court decision in February that struck down previous tariffs imposed under the International Emergency Economic Powers Act. NBC News reports that the new tariffs aim to address the failure of these economies to enforce prohibitions on goods produced with forced labor.
While the tariffs are set to impact a wide range of goods, exemptions include fertilizers, some fuels, foods, autos, metals, and pharmaceuticals. Yahoo Finance notes that these exemptions are in response to the ongoing war in Iran and rising prices.
The European Union and other affected countries have rejected the forced labor accusations. Ambassador Jamieson Greer emphasized the importance of enforcing forced labor import bans, which the U.S. has had for nearly a century. The new tariffs are expected to lead to a moderate increase in the overall effective tariff rate across the U.S. economy.
President Trump has consistently supported tariffs as a means to level the playing field between the U.S. and other countries. However, the new tariffs are likely to face legal challenges and international pushback, particularly from the European Union, which is the largest single U.S. trading partner.