Supreme Court overturns tariffs, Trump administration imposes new ones

The U.S. administration has announced new tariffs of 10% or 12.5% on trade with 60 countries and country groups, including the European Union, set to take effect just after midnight on July 23-24 Eastern Time. These new duties will replace the previous global 10% tariff rate, which was introduced by the Trump administration and subsequently overturned by the Supreme Court. The announcement was made on the website of the U.S. Trade Representative, Jamieson Greer.

The new tariffs are being implemented under Section 301 of the Trade Act of 1974. This provision allows the U.S. president to impose duties on countries engaging in "unreasonable or discriminatory trade practices." The Trump administration is leveraging this statute by citing allegations that certain countries have not adequately adopted or enforced regulations prohibiting the import of goods manufactured using forced labor. The U.S. argues that this puts American companies, which must comply with such regulations, at a competitive disadvantage.

A 10% tariff rate will apply to countries that have implemented regulations banning goods made with forced labor but are not enforcing them sufficiently. This rate will affect trade relations with the EU, among others. For other countries, including China, Japan, and South Korea, a higher tariff rate of 12.5% has been announced. The U.S. Trade Representative's office stated that investigations concerned "the non-adoption and ineffective enforcement of the prohibition of the import of goods manufactured with forced labor."

Notably, certain categories of products, such as steel, aluminum, automobiles, and auto parts, are excluded from these new tariffs. Some food and agricultural products will also be exempt. The "Wall Street Journal" observed that these tariffs, once implemented, could remain in effect indefinitely and be unilaterally altered by the head of state, suggesting the administration is building a new tariff architecture. High-ranking White House officials indicated that the president does not intend to allow his trade policy or broader objectives to be undermined by judicial decisions or other limitations on available tools.