The Trump administration will impose tariffs of 10% to 12.5% on 60 U.S. trading partners that will immediately replace 10% levies set to expire on Friday.
The new tariffs will apply to almost all U.S. imports, underscoring the administration's commitment to tariffs.
The duties will be issued under Section 301 of the Trade Act of 1974, which allows presidents to impose tariffs against countries that engage in unfair trade practices. The administration said the countries to be hit with new tariffs have failed to impose or effectively enforce prohibitions on importing goods made with forced labor.
The United States Trade Representative said it would impose 10% tariffs on economies that have partial forced labor bans or have agreed to do adopt them. The United Kingdom, Canada, Mexico and India fall into this bucket.
Countries without adequate provisions in place to prohibit goods made with forced labor, or to police the situation, are subject to 12.5% duties. China, South Korea and Japan among those in this group. Goods subject to sector or other national security-related tariffs will not be hit by these duties.
The duties are part of the administration's efforts to use different tools to re-create the global tariffs that were struck down by the Supreme Court in February. These new levies replace the 10% Section 122 tariffs the administration used as a bridge following the decision until it could find alternative means.
The tariffs hit during a week of developments that underscore the tariff uncertainty that persists. President Donald Trump has threatened 50% tariffs on about $20 billion of trade with Canada; implemented 50% tariffs on a select group of Brazilian goods; and threatened to impose 100% plus tariffs on generic drugs if they aren't made stateside in two years.
On Thursday, USTR also called into question a trade deal negotiated with the European Union because of continued friction over the region's Digital Markets Act and a recent $1 billion fine against Google.
For now, tariff back and forth isn't rattling the markets much, as most strategists have already baked in an average tariff rate of 10% to 15% and expect a spate of goods could be carved out, as the U.S. did with the recent levies on Brazil that spared the grocery aisle.
Nathaniel Halvorson, a partner at Baker & McKenzie and former USTR deputy assistant, said more trade actions are still to come.
But many of these will require a public comment period when companies will be able to push for exemptions and air their concerns -- as was the case with the forced labor tariffs, which drew more than 2,000 comments.
This process, Halvorson, is underappreciated and one reason to look beyond the "bombastic announcements" and more at the fine print in how tariffs are being applied.
"You may be looking at a much more targeted outcome, which is why business is able to tolerate some of this," he said.
(END) Dow Jones Newswires
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