Explained: Trump's new tariffs on 60 trading partners after Supreme Court setback

The United States on Friday imposed fresh tariffs ranging from 10% to 12.5% on imports from 60 trading partners, including the European Union, China, India, Japan and South Korea, marking the first major step by President Donald Trump's administration to rebuild its global tariff regime after the US Supreme Court struck down his previous reciprocal duties earlier this year.

The new measures, introduced under Section 301 of the Trade Act of 1974, replace the temporary universal 10% tariff that expired at 12:01 a.m. EDT on Friday.

They cover 99.4% of US imports, although a wide range of products, including energy, fertilizers, aircraft, certain food items and critical minerals, remain exempt.

Washington justified the action by arguing that many trading partners had failed to adequately prevent goods produced through forced labor from entering global supply chains, an allegation several affected governments rejected.

Treasury data shows the government has refunded about $81 billion in tariffs during the current fiscal year, which began in October 2025, up sharply from roughly $5 billion in the corresponding period a year earlier.

New legal route revives Trump's tariff agenda

The move comes months after the Supreme Court ruled that Trump's earlier "Liberation Day" tariffs, imposed under emergency powers, exceeded presidential authority because Congress—not the White House—holds primary responsibility for setting trade policy during peacetime.

Instead of relying on emergency legislation, the administration has now turned to Section 301, which allows tariffs following investigations into unfair foreign trade practices that affect US commerce.

US Trade Representative Jamieson Greer defended the decision, arguing that America's trading partners had not done enough to stop imports linked to forced labor.

"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," Greer said.

He added that the new tariffs were intended to address both human rights concerns and trade distortions.

Unlike the previous reciprocal tariffs, which ranged as high as 50%, the new duties generally fall between 10% and 12.5%.

Countries assigned different tariff tiers

The administration placed Argentina, Bangladesh, Britain, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka and Trinidad and Tobago in the 10% category, arguing that while these countries had bans or plans targeting forced labor imports, enforcement remained inadequate.

The European Union, Taiwan, Japan, South Korea and Switzerland were assigned tariff rates that, when combined with existing most-favored-nation duties, total either 10% or 12.5%.

Another 38 countries—including Vietnam and China—were placed in the higher 12.5% tier.

China continues to reject US allegations that products linked to forced labor from Xinjiang enter international markets, maintaining that claims regarding the treatment of Uyghur minorities are politically motivated.

The White House said goods already subject to separate national security tariffs—including automobiles, steel, aluminium and copper—would not face additional levies under Friday's announcement.

Imports already in transit before Friday's implementation will remain exempt until July 28.

Legal experts question durability of the policy

Although Section 301 has previously survived judicial scrutiny, some legal experts believe the administration could still face fresh challenges.

Caroline Freund, a US trade expert, argued the latest move is primarily about preserving Trump's tariff agenda rather than addressing labor standards.

"It is not about forced labour," she said, adding that the administration was searching for an alternative legal basis after losing its earlier court battle.

Alan Wolff, senior fellow at the Peterson Institute for International Economics and former deputy director-general of the World Trade Organization, also questioned the legality of the measure.

Writing earlier this week, Wolff said the new tariffs represented another example of presidential overreach.

"If they were challenged in court, the Supreme Court would likely overturn them," he wrote.

The Peterson Institute similarly argued the investigation functions less as a labor standards initiative than as a mechanism to recreate the tariff structure invalidated earlier this year.

Trading partners reject Washington's allegations

The announcement triggered mixed reactions across major economies.

China reiterated its longstanding opposition to unilateral tariffs, saying trade disputes benefit no one.

The European Commission noted that the new tariff structure broadly respected commitments made under a recent EU-US joint statement.

"The EU notes positively the fact that this outcome is in line with the US tariff commitments agreed under the EU-US Joint Statement," a Commission spokesperson said, adding that discussions on further exemptions would continue.

France acknowledged questions surrounding the legal basis of the tariffs but suggested the announcement at least provided businesses with greater clarity over future trade conditions.

Switzerland similarly disputed the forced labor allegations while welcoming Washington's adherence to previously agreed tariff ceilings.

Britain said its recently negotiated trade agreement with the United States remained intact and emphasised that American tariffs on whisky and certain medical technology products had been removed.

The British Chambers of Commerce described the outcome as mixed, pointing to improved treatment for whisky exports and relatively favourable steel tariffs while noting that British manufacturers had lost some competitive advantages compared with other trading partners.

Australia, Brazil and Norway adopted a stronger tone, criticising the measures as unjustified and pledging to seek their removal through diplomatic channels.

Canada, which earlier this week was separately hit with new tariffs on approximately $20 billion worth of exports, issued a comparatively restrained response.

Trade Minister Dominic LeBlanc said Ottawa shared Washington's objective of preventing forced labor but would continue engaging with US officials over the coming weeks.

Businesses brace for higher costs despite exemptions

Economists say the broad list of exemptions should soften the immediate economic impact, although many businesses are still expected to face higher import costs.

Wendy Cutler, vice-president of the Asia Society Policy Institute, said companies and consumers would inevitably bear some of the burden despite carve-outs covering strategically important products.

She added that many governments were likely to accelerate efforts to diversify trade relationships away from the United States.

"The focus will increasingly be on reducing dependence on the US through new trade agreements elsewhere," Cutler said.

However, Tianchen Xu, senior economist at the Economist Intelligence Unit, told CNBC that the effect on major Asian manufacturing hubs could prove more limited because key electronics products—including semiconductors and consumer devices—remain exempt from the latest tariffs.

Those exemptions are particularly significant for Asian exporters, many of whom dominate global technology supply chains.

Kelly Ann Shaw, a former White House trade adviser during Trump's first term, described Friday's measures as broadly consistent with what markets had anticipated, Reuters reported.

She noted that the administration had expanded the exemption list to include hundreds of additional products, limiting the overall economic disruption while preserving its broader tariff framework.

The latest move nevertheless signals that tariffs remain central to the Trump administration's trade strategy even after its earlier legal defeat, setting the stage for fresh diplomatic disputes and potentially another round of courtroom challenges.