Just before a temporary levy on global imports was set to expire, the Trump administration issued a fresh wave of tariffs on more than 80 countries late on Thursday, ranging from 10% to 12.5%. The new tariffs take effect on Friday morning.
It’s Donald Trump’s latest effort to continue imposing global levies without congressional approval, despite the supreme court ruling in February that found the US president had illegally used his executive power to implement his global trade policies. Trump has long maintained that the US has been paying more than its fair share in tariffs, and that increased duties are necessary to boost American manufacturing and jobs.
Here’s what to know about Trump’s latest round of tariffs.
Which countries are affected?
The US’s largest trading partners, including Canada, Mexico and China, were included among the more than 80 countries that will face the latest tariffs. The United Kingdom, Australia, India and the 27 countries that make up the European Union will also be affected.
All of these countries were investigated for their labor practices, according to the office of the US trade representative, who apparently determined whether they were effectively blocking goods that had been produced with forced labor from being imported to the US.
How much will they have to pay?
These countries will be subject to either a 10% or 12.5% duty.
The trading partners that will be subject to a 10% tariff are those who “have made commitments to adopt, and effectively enforce, forced labor import prohibitions”, said the US trade representative. This includes Canada, the European Union, India, Mexico and the United Kingdom. Those that have “failed to adopt a forced labor import prohibition”, including Australia, Brazil, China and Japan, will be subject to a 12.5% tariff rate.
What did the supreme court decide on tariffs?
In February, the supreme court ruled 6-3 that the 1977 law that Trump had invoked a year earlier was not a sufficient legal justification for the president’s “Liberation Day” tariffs. The law was designed to grant the president greater authority during a national emergency to regulate international trade, but the court said that the power to enact during times of peace belongs solely to Congress.
“And they gave Congress ‘alone … access to the pockets of the people’,” the majority opinion reads. “The Framers did not vest any part of the taxing power in the executive branch.”
Are the latest tariffs legal?
Even after the supreme court found that many of Trump’s tariffs were illegal, the administration had signaled it was determined to find an alternate solution to make tariffs permanent. Trump immediately issued a 150-day 10% global tariff under section 122 of the Trade Act of 1974 after the court’s ruling, scheduled to expire at 12.01am, on 24 July.
The latest tariffs fall under section 301 of the Trade Act of 1974, which had been used sparingly before Trump’s presidency. It allows the president to impose tariffs if the US trade representative has conducted the required investigations and found sufficient evidence of unfair labor practices that affect American commerce.
It is likely that the latest tariffs will be challenged in court. Alan Wolff, a senior fellow at the Peterson Institute for International Economics and the former deputy director-general of the World Trade Organization, wrote in an analysis on Thursday that the “new tariffs would represent another case of presidential overreach”.
“If they were challenged in court, the supreme court would likely overturn them,” he added.
How have tariffs affected Americans?
The New York Federal Reserve estimated that 90% of the economic burden imposed by tariffs was passed on to US consumers and businesses, even though Trump’s administration has maintained they have benefited Americans.
Tariff policy has also proved unpopular among many Americans, including Republicans. A recent survey from Harris Poll found that 72% of Americans believe tariffs have had a negative impact on consumers, including 64% of Republican voters.
For some American small businesses, however, tariffs have become a non-issue compared with other pressing concerns about the economy, including higher costs and artificial intelligence. Since the February supreme court ruling, the government has also paid companies back tens of billions of tariff revenue.
