Key Takeaways:
The White House is rebuilding its tariff architecture on a new legal foundation after the Supreme Court dismantled the old one.
The Trump administration proposed tariffs of as much as 12.5% on 60 economies Tuesday, using a Section 301 forced-labor investigation to replace emergency powers the Supreme Court struck down four months ago.
"The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable," U.S. Trade Representative Jamieson Greer said in a statement. "This creates a dynamic where American workers are forced to compete globally on an unlevel playing field."
Fourteen economies including the European Union, Britain, Canada and Mexico face a baseline 10% tariff, while 45 others including China, Japan, India and South Korea would be hit with 12.5% levies. The USTR said the first group had partial enforcement plans in place, while the second lacked prohibitions or bilateral agreements. The proposed duties come with a 76-page exemption list covering beef, coffee, aircraft parts, energy, rare earths, pharmaceuticals and organic chemicals.
The shift to Section 301 — a statute with no expiration date or rate cap — marks the administration's third attempt at broad tariffs in six months, after the Supreme Court in February and a trade court in May struck down earlier efforts. A public comment period runs through July 6, with hearings starting July 7, ahead of the July 24 expiration of a temporary 10% tariff imposed after the court ruling.
The proposal drew sharp pushback from trading partners. Bernd Lange, chair of the European Parliament's trade committee, called the U.S. findings "utterly absurd," noting the EU passed its own forced-labor import ban in 2024, though it does not take effect until December 2027. "The impression is increasingly emerging that a tariff measure is sought first, and only then is a suitable legal justification found," he said.
Britain said it was in regular talks with the U.S. and that preferential market access it had negotiated remained in place. Taiwan expressed confidence the final outcome would reflect existing agreements. Beijing, facing the higher 12.5% rate, said it opposed all forms of unilateral tariffs and denied the existence of forced labor in China.
The current average U.S. tariff rate stands at 9.3% despite some headline rates being far higher, according to Grace Zwemmer, U.S. economist at Oxford Economics. After the previous tariff escalation under emergency powers, bilateral trade flows with targeted nations contracted as supply chains adjusted, though the administration has not released updated aggregate figures.
Exemptions and the Pattern of Tariff Relief
The 76-page exemption list continues a pattern that has defined the Trump tariff campaign since it began in 2025: broad levies announced with sweeping rhetoric, then narrowed by exceptions. After the "Liberation Day" announcement last year, the White House exempted iPhones and other consumer electronics. In November, the administration carved out a swath of food products to address grocery prices. On Monday, the White House cut tariffs on industrial and agricultural equipment including combines and bulldozers to 15% from 25%.
What Comes Next
The USTR is finalizing a parallel Section 301 investigation into excess industrial capacity in 16 trading partners including China and the EU, which could provide the legal basis for a permanent tariff system. On Monday, the agency proposed a 25% duty on many Brazilian goods over digital trade practices. The cumulative effect of multiple probes could leave broad swaths of U.S. imports subject to Section 301 tariffs regardless of the forced-labor outcome.
French Finance Minister Roland Lescure said the goal remained to ratify the trade accord sealed with Washington last year, which set EU tariffs at 15% on a broad range of exports. Whether the new Section 301 duties would exceed that agreed level is the key question, Lange said.
This article is for informational purposes only and does not constitute investment advice.
