The Donald Trump administration has imposed new tariffs of 10% and 12.5% on goods from 60 trading partners, including Europe and China, over allegations of lax enforcement of forced labor bans. The new levies follow up on the old 10% global tariff that expired on July 23.
The White House has been relentless in terms of persisting with Trump’s vision of a near-global tariff, despite the United States Supreme Court’s February 2026 verdict, that shot down the Republican’s “reciprocal” duties of 10% to 50%, that were imposed under a national emergencies law to try to shrink Uncle Sam’s trade deficit.
The new tariffs, announced in a Federal Register notice, cover 99.4% of US imports. They also include numerous product exemptions, such as oil and gas, fertilizer, and certain food items.
“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. Today’s action will begin to correct what is both a human rights abuse and a distortive trade practice to improve the welfare of workers everywhere,” US Trade Representative Jamieson Greer said while announcing the tariffs.
Imposed under Section 301 of the Trade Act of 1974, the new duties allow the Trump administration to maintain a tariff floor on virtually all US imports despite the Supreme Court setback. Also, Section 301 has a prior history of surviving court challenges.
Argentina, Bangladesh, Britain, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, and Trinidad and Tobago will face a 10% tariff on their exports. The European Union, Taiwan, Japan, South Korea, and Switzerland have been assigned rates that, combined with pre-existing most-favored-nation (MFN) tariff rates, totaled 10% or 12.5%.
Vietnam, which issued a new decree this week to ban imports of goods made with forced labor, has been kept at the 12.5% slab. China, often accused by Washington of detaining Uyghur minorities in work camps, got featured in the same bracket too.
For the countries already having trade deals with Washington, the new forced labor duties would not push them above the caps decided under the bilateral arrangements.
However, the action has drawn stronger protests from trade partners like Australia and Brazil, who described the new tariffs as unjustified and said they would seek to have them removed, while Norway said there was “no basis” for them.
Canada, hit on Monday with new Trump tariffs on USD 20 billion worth of goods, saw its minister in charge of US trade, Dominic LeBlanc, commenting, “We will continue engaging constructively with the United States on this matter, as well as other outstanding issues, over the coming weeks to the mutual benefit of our citizens.”
However, the response from Prime Minister Mark Carney was a severe one, as he said, “Canada will do whatever it takes to defend itself in a trade war with the United States, including possible retaliatory measures. We are intensifying our trade negotiations with the United States and will not hesitate to defend our interests if we have to.”
Carney, who was attending a meeting of provincial premiers after Washington’s new 50% tariff announcements, which would take effect on August 19, described the whole situation as an “unwarranted” one.
While Trump and Carney previously agreed to intensify bilateral trade talks, Washington’s latest tariff aggression, along with the White House’s non-commitment on extending the United States-Mexico-Canada Agreement (USMCA) for another 16 years, have complicated things now.
The US is negotiating with Canada and Mexico on separate tracks, and Washington has said it is making more progress with Mexico. As per the analysts, this statement also raises the risk of Uncle Sam possibly seeking to force concessions on Canada that Mexico agrees to.
Talking about the US-Mexico talks, officials from both nations will meet for a fourth round of negotiations to revamp the North American trade pact in September, after talks this week exposed disagreements over changes to automotive content rules and other issues.
Greer met with Mexican President Claudia Sheinbaum and Economy Minister Marcelo Ebrard this week during a third round of talks over the USMCA. The officials discussed sectors like autos, economic security, labor, agriculture, and electronic payment services, as well as steel and aluminum products.
While the US and Mexico are neogtiating the six-year-old USMCA, which underpins nearly USD 1.6 trillion in regional trade that was once duty-free, if the negotiations spill into 2027, it will only result into a prolong business and investment uncertainty, something that both Mexico and Canada have been seeking to ease with Uncle Sam.
Washington has been demanding that vehicles contain 50% of US-made content to qualify for preferential market access into the world’s largest economy. The proposal, however, has been a non-starter for the Mexican government, with reports suggesting that the Latin American nation being unwilling to accept “even 1%” of American content, as such a provision “opens the door for a potential increase in the future” and sets a “problematic precedent.”
“Under the current trade pact, vehicles must contain 75% North American content to qualify for duty-free treatment, with 40% produced by workers earning at least USD 16 per hour—a threshold met in the US and Canada. The agreement, however, does not require that a fixed share of content come from any one country,” sources told the Reuters.
Mexico also wants Washington to reduce “Section 232” national security tariffs of 25% on autos and 50% on steel and aluminum before making concessions on other issues. But Trump has shown no sign of easing the tariffs.
The auto tariffs have also put Mexican auto factories at a cost disadvantage to competitors in Japan, South Korea, and the European Union (EU), which face a 15% levy to export cars to the US with no regional content requirements.
The US has reportedly nudged Mexican officials to propose alternative ways to meet Trump’s goals of bringing more automotive production back to the American shores, displacing Asian components (read China) in the North American supply chain, and reducing Washington’s trade deficit with Mexico.