WASHINGTON – The US is proposing tariffs of at least 10 per cent on imports from most major trading partners following an investigation into goods allegedly produced by forced labour, as President Donald Trump seeks to rebuild the sweeping tariff wall struck down by the US Supreme Court.
The 10 per cent rate would apply to imports from Canada, Mexico, the European Union, Taiwan and Britain, among other places, according to a statement from the Office of the US Trade Representative.
Products from other major economies, including China, India, Japan, South Korea, Brazil and Switzerland, would be subject to a 12.5 per cent levy.
The trade office said it was imposing the lower rate on goods from economies that impose prohibitions on forced labour import prohibitions or have committed to doing so, while those “that have failed to impose and effectively enforce” them received a higher rate.
The move is a major step in Trump’s push to reinstate the country-by-country tariffs he imposed during his first year in office before they were deemed unconstitutional.
The recommended duties are a result of probes launched under a separate legal authority known as Section 301 of the Trade Act of 1974.
The levies won’t go into effect immediately and are subject to a public comment and review period before implementation, which could result in changes before any duties are codified.
Written comments are due to be submitted by July 6, and a Section 301 panel is expected to convene public hearings beginning on July 7, according to the notice.
“The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field,” US Trade Representative Jamieson Greer said in a statement.
“We will no longer tolerate this disparity.”
The move will test the tolerance of the largest US economic partners, who have largely restrained from retaliating against Trump’s tariffs, opting instead to negotiate deals to lower import taxes and ensure market access.
The forced-labour probes were just one prong of the administration’s effort to revive Trump’s tariffs.
There are a separate raft of 301 investigations into US trading partners’ excess manufacturing capacity.
There are several proposed exceptions to the tariff regime.
Apparel and textile imports from some countries would be able to enter the US at a reduced tariff rate – with those quotas set according to the volume of US exports of textiles to those nations.
Other products are exempt from the tariffs entirely, including beef, tomatoes, bananas, coffee, orange juice and other food items.
Metals, which are already covered by other levies, are excluded, as are certain fuels and chemicals.
Trump’s broad trade agenda suffered a sharp blow in February when the Supreme Court struck down levies he imposed using emergency powers.
The 301 probe into forced-labour practices initially targeted around 60 economies.
Section 301 tariffs are seen as more legally sound and flexible than other powers Trump has eyed, but also more time-consuming.
As a stopgap measure, the president also implemented a 10 per cent global levy under Section 122 of the trade law, though those import taxes expire in July.
The Section 122 tariffs are themselves subject to an ongoing legal challenge.
Greer has said the goal was to complete a series of trade investigations to allow Trump to quickly enact new tariffs after the outgoing measures expire.
The moves pose questions about the stability of a truce with China following a summit between Trump and counterpart Xi Jinping in May that saw them agree to establish new boards on trade and investment to manage the relationship between the world’s two largest economies.
More broadly, the levies arrive at a pivotal time for the global economy with financial markets already on edge over the Iran war and a resultant spike in oil and gas prices.
Those higher energy prices have fuelled new fears about inflation and in the US exacerbated affordability concerns among voters that threaten Trump’s Republican Party in November’s midterm elections. BLOOMBERG
