Trump Team Proposes New Tariff Round On 60 Countries Over Forced Labor Practices

The U.S. Trade Representative has issued an overnight statement and proposed a new round of tariffs of at least 10% on imports from 60 trading partners, marking the administration's largest attempt yet to rebuild its tariff empire after the Supreme Court struck down earlier levies.

The new duties stem from Section 301 of the Trade Act of 1974, which investigates whether trading partners are failing to block products made with forced labor - or slave labor. 

Those tariffs would apply to Canada, Mexico, the EU, Taiwan, and the UK, while goods from China, India, Japan, South Korea, Brazil, and Switzerland would face a higher 12.5% rate. The USTR explained that the higher rate targets countries that have failed to impose or effectively enforce forced-labor import bans.

"The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field," U.S. Trade Representative Jamieson Greer wrote in a statement.

Greer added, "We will no longer tolerate this disparity. Some trading partners have taken initial steps to prevent the importation of forced labor goods, including through the USMCA and commitments in Agreements on Reciprocal Trade. However, each of our trading partners must do more to ensure that trade does not perversely encourage and entrench forced labor globally."

The proposed new levies will enter public review in the coming weeks, with hearings scheduled for June 22. Written comments are due by July 6, and public hearings will begin on July 7.

Deborah Elms, head of trade policy at the Hinrich Foundation in Singapore, told Bloomberg in response to the development that "trading partners will be understandably upset by this determination."

"You've opened a door now for a whole lot of new tariff and non-tariff adjustments," Elms said.

She added, "It's very impactful because Section 301 is an extremely powerful tool, and it's unlikely to be overturned." 

In February, President Trump's protectionist trade agenda to rebuild America's industrial core suffered a sharp blow when the Supreme Court struck down levies he imposed under the International Emergency Economic Powers Act, ruling that the statute did not authorize the president to impose sweeping tariffs without congressional approval.

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That decision by the High Court forced the Trump team to pivot to longer-lasting but slower trade authorities, such as Section 122 and Section 301 of the Trade Act of 1974. Section 122 can be used to impose temporary import duties, while Section 301 requires investigations into unfair foreign trade practices, providing a legal pathway for the forced-labor probe to make tariffs great again.