US announces new tariffs on 60 trading partners

The United States said Thursday that it would impose new tariffs on 60 trading partners over forced labor concerns, replacing an expiring global duty rolled out by President Donald Trump earlier this year.

The levies, which take effect Friday, range from 10 percent to 12.5 percent and impact major economies like China, India and the European Union.

“The United States has had a forced labor import ban for nearly a century, and rigorously enforces it; it’s well past time for our trading partners to do the same,” said US Trade Representative Jamieson Greer in unveiling the duties.

The Trump administration has moved swiftly to rebuild the president’s tariff wall after the Supreme Court struck down a host of his duties in February — dealing a blow to his ability to unleash steep levies at will.

After the legal setback, Trump tapped different authorities to reimpose a 10-percent tariff on imports. But this only lasts 150 days, expiring Friday.

The volley of new duties, initially proposed in June, will now take its place.

The measures were proposed after a months-long investigation and are considered more resistant to legal challenges than earlier moves.

Under Thursday’s announcement, economies that have implemented a forced labor prohibition are hit with the lower 10-percent rate. They include Canada, the EU and the United Kingdom.

Others were deemed to deserve harsher levies, receiving the higher 12.5 percent tariff, a US official told reporters. Trading partners like China and Japan are covered in this group.

Goods already facing Trump’s sector-specific tariffs — like steel and aluminum — will not be impacted.

Goods entering under the US-Mexico-Canada free trade pact will also be exempt, a US official told reporters.

– Maintaining leverage –

Washington is separately investigating 16 economies over excess industrial capacity, in probes that could lead to additional duties.

These could result in different rates among countries eventually, as Trump had done before his legal setback.

The Trump administration’s move to impose a baseline tariff while sustaining the threat of further duties ahead maintains leverage over its trading partners, trade lawyer Greta Peisch told AFP.

It also creates an incentive for countries to comply with trade pacts that they earlier struck, she added.

In spending time on investigations, officials want their incoming tariffs to be robust if there are court challenges, said Peisch, a former USTR general counsel who is now a partner at Wiley Rein.

“This makes it much more likely that they stay for the duration of Trump’s term,” signaling a “much more protectionist world’s largest economy” moving forward, Josh Lipsky of the Atlantic Council think tank told AFP.

The Trump administration has been hunting for options that would allow it to aggressively deploy tariffs, said former US trade official Ryan Majerus.

In the longer term, Section 301 of the Trade Act of 1974, which Greer tapped to impose the latest duties, provides “more flexibility than people realize,” Majerus said.

Once they are in place, officials can modify them based on new developments, added Majerus, a partner at King & Spalding.

– ‘Fragile’ deals –

The latest salvo comes shortly after a separate 25-percent tariff took effect on various Brazilian goods, with Washington accusing the Latin American giant of unfair trade practices after a yearlong investigation.

This week, Trump also ordered new 50-percent tariffs on many Canadian products, citing Ottawa’s “discriminatory treatment” against American alcohol, automobile and dairy products.

The Canadian tariffs taking effect in a month relied on an untested legal provision, showing that Trump has “other tools in the toolkit” to wield, said Lipsky.

This signals that US tariff deals “are still fragile.”

Nonetheless, the EU, which earlier signed a trade pact with the United States, expects Washington “will honor the commitments that are spelled out under the EU-US Joint Statement.”

AFP

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