The Trump administration will impose tariffs of up to 12.5% starting Friday on goods from 60 U.S. trading partners accused of failing to crack down on forced labor, it announced Thursday, a move that will extend the administration’s tariffs on much of the world.
Most of the trading partners will face 12.5% tariffs, including Vietnam and China, but a lower 10% rate will apply to 17 countries that have some prohibitions on forced labor, including the United Kingdom, Canada and Mexico. Five other trading partners — including the European Union — will face some additional levy to get their total most-favored-nation tariff rate to either 10% or 12.5%.
A senior administration official described the measure as “the most sweeping international labor rights action the United States has ever taken, that any country has ever taken.”
The official told reporters the Trump administration views forced labor as a problem not only because of human rights concerns, but also because countries that don’t enforce bans on forced labor have an “unfair advantage” over the United States, which does enforce such bans.
“This action advances longstanding bipartisan objectives by pairing enforcement with incentives that encourage our trading partners to adopt and effectively enforce the type of import prohibitions that we do,” an official said earlier Thursday.
Some imports are exempted from the levies, including oil and gas, things that aren’t produced in the U.S. or could cause economic disruptions, goods where a tariff wouldn’t contribute to the elimination of unfair trading practices and goods like steel that are already covered by sector-specific tariffs. Many goods that comply with the U.S.-Mexico-Canada Agreement, a trade deal signed during the first Trump administration, are also exempt.
The new tariffs will go into effect at 12:01 a.m. on Friday, which is when a separate set of 10% levies on most imports is scheduled to expire.
The forced labor duties mark the latest attempt by President Trump to resurrect his global system of tariffs after a Supreme Court ruling earlier this year struck down most of his country-by-country tariffs. The high court ruled that Mr. Trump had illegally used an emergency economic powers law to impose tariffs on much of the world.
Mr. Trump vowed to reinstate his tariffs through other legal routes, arguing the levies are necessary to revive U.S. manufacturing and prevent what he views as unfair trade practices by other countries. Many economists warn tariffs can lead to higher consumer prices and more sluggish economic growth.
Almost immediately after the Supreme Court’s February ruling, Mr. Trump ordered 10% tariffs on most global imports under a law called Section 122, which gives the president the power to deal with balance-of-payment issues. But that legal authority lasted for only 150 days.
The Section 122 tariffs will largely be replaced by Thursday’s forced labor tariffs, which were issued under another legal authority known as Section 301. That law allows for longer-lasting tariffs in response to unfair trade practices, but only if the government conducts an investigation, which U.S. Trade Representative Jamieson Greer’s office wrapped up this week.
The administration is conducting several other Section 301 investigations that could lead to more tariffs. One probe triggered 25% tariffs on Brazil this week, and the administration launched a long-running investigation earlier this year into whether more than a dozen countries have unfairly built up “excess capacity” in manufacturing.
Goods like steel, aluminum and car parts are subject to tariffs under a separate law called Section 232. And yet another federal law — Section 338 — was invoked this week to slap tariffs on Canadian milk, alcohol and hockey equipment.
“The president is not going to allow his trade policy and overall objectives to be undermined simply because … one tool may be limited by a court or something else,” a senior administration official said Thursday. “We are going to get at these trade policies and practices, the president is always going to look to tariffs as a tool to do it, and he’s always going to use negotiation as well to obtain resolution of these issues.”