Donald Trump. (Photo: Kenny Holston/AFP)
The US announced on Thursday that it would impose new tariffs on 60 trading partners over forced labor concerns. It replaces a global import tariff that pres. Donald Trump introduced earlier this year and now expires.
The new tariffs, which come into effect on Friday, range between 10% and 12.5% and affect major economies such as China, India and the European Union (EU).
“The US has had a ban on the importation of products produced by forced labor for almost a century, and strictly enforces it; it is long past time that our trading partners do the same,” said Jamieson Greer, the US Trade Representative.
He previously said the economies targeted by the tariffs represent the majority of America’s trade.
The Trump administration moved quickly to rebuild the president’s tariff wall, after the US Supreme Court struck down many of his tariffs in February. This was a setback for Trump’s ability to introduce sharp tariffs at will.
After this setback, Trump used other legal powers to reintroduce an import tariff of 10%. However, this rate only applies for 150 days and expires on Friday.
The series of new tariffs, initially proposed in June, will now replace them.
The measures were planned after an investigation of several months and are considered to be more resistant to possible lawsuits than the previous tariff measures.
According to Thursday’s announcement, economies that have already introduced, or committed to, a ban on the import of products produced by forced labor will pay the lower rate of 10%. Canada, the EU, India and the United Kingdom count among them.
China, Japan, South Korea and dozens of other countries will pay the higher rate of 12.5%.
However, the EU, Taiwan, Japan, South Korea and Switzerland get some relief in terms of trade agreements they previously reached with the US.
The new tariffs quickly drew criticism from the targeted countries.
Pres. Donald Trump is tans in Japan. (Foto: Philip Fong / AFP)
Japanese government spokesman Minoru Kihara said Tokyo “regrets” the tariffs because the higher rate “is based solely on the fact that there is no ban on the import of products produced by forced labor”.
Don Farrell, Australia’s trade minister, labeled the tariffs “unjustified” and argued that they were “contrary to our free trade agreement and should be removed”.
Goods such as steel and aluminium, which are already subject to sector-specific tariffs, will not be affected by the new measures.
Certain energy products and fertilizers will also be excluded, as well as goods covered by the free trade agreement between the US, Mexico and Canada, a US official told reporters.
Washington is separately investigating 16 economies about excess industrial capacity. These investigations may lead to further charges.
Experts warn that this could eventually lead to different tariff rates for different countries.
Greta Peisch, a trade lawyer, told AFP that the Trump administration’s decision to introduce a basic tariff while maintaining the possibility of further tariffs gives Washington leverage over its trading partners.
It also creates an incentive for countries to comply with trade agreements they entered into earlier, she added.
According to Peisch, American officials want to ensure through thorough investigations that the new tariffs are sufficiently well founded to withstand possible court challenges. Peisch is a former general counsel for the office of the US Trade Representative and is currently a partner at Wiley Rein.
“This makes it much more likely that they will remain in effect for the duration of Trump’s tenure,” Josh Lipsky of the Atlantic Council told AFP. According to him, this indicates that the world’s largest economy will be “much more protectionist” in the future.
The reinstatement of tariffs also increases government revenue, he added.
‘Fragile’ agreements
The latest tariff measures follow shortly after a 25% tariff on several Brazilian goods came into effect. Washington has accused Brazil of unfair trade practices.
This week, Trump also ordered new tariffs of 50% on numerous Canadian products. He cited Ottawa’s “discriminatory treatment” of American alcohol, cars and dairy products as the reason.
The Canadian tariffs, which come into effect in a month, are based on a legal provision that has not been tested before. According to Lipsky, this shows that Trump still has other tools that he can use quickly.
This suggests that America’s tariff agreements are “still fragile”, he said.