Donald Trump has threatened to impose tariffs of between 10% and 12.5% on 60 trading partners, including the United Kingdom, the European Union, and Australia, over alleged failures to address forced labour. This move marks the latest attempt by the former president to revive his signature trade policy while skirting previous court-imposed limits.
EU Responds Quickly
The European Union immediately hit back, stating it expects the United States to respect the tariff deal agreed upon last July. Brussels argued that the proposed stealth tariffs breach the spirit of that agreement.
Legal Background
The proposed levies come after the US Supreme Court ruled in February that Trump's earlier "liberation day" tariffs were illegal. In response, Trump imposed 10% across-the-board tariffs, but last month the US trade court found those also unlawful, though they remain in place pending appeal. The new proposal, based on forced labour grounds, would allow Trump to circumvent those court rulings.
The tariffs would affect major partners including Canada, Japan, Norway, Taiwan, and China. Additionally, the US is threatening to impose fresh 25% levies on Brazil.
US Trade Representative Statement
US Trade Representative Jamieson Greer said: "The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field. We will no longer tolerate this disparity."
Impact on Trading Partners
The threat of fresh tariff disruption will unsettle trading partners, including UK Prime Minister Keir Starmer, who have worked hard to build trust with Trump and contain the costs of trading with his unpredictable administration.
Experts had predicted that Trump, long obsessed with tariffs as a tool of national economic security, would seek ways around the Supreme Court ruling. At the time, he threatened to use tariffs in a "much more powerful and obnoxious way" through at least six other legal routes.
Investigation Details
The latest tariffs result from investigations into the labour laws of 60 trading partners under Section 301 of the Trade Act of 1974. A 98-page report on the investigation states that "only Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan have not failed to impose a forced labor import prohibition."
However, the White House judged Canada to be failing to enforce its laws, while the EU's across-the-board ban on forced labour imports does not take effect until December 2027. Thus, both could face tariffs.
The report specifies that the EU, Canada, Mexico, Taiwan, and the UK would face 10% tariffs, while 12.5% levies would be imposed on China, Japan, India, South Korea, Brazil, and Switzerland.
Implementation and Reactions
The new tariffs would not take effect immediately and are subject to public comment and review.
The European Commission said the EU "fully shares" US concerns about forced labour but "considers tariffs imposed on these grounds to be unjustified." It remains committed to the July deal agreeing 15% tariffs on most goods and expects the US to fully respect its terms.
The UK government stated it has already addressed forced labour through legislation, including the Modern Slavery Act. A spokesperson said: "We continue to engage regularly with the US administration as part of our negotiations, and have made clear the actions we’re taking. The preferential access that UK businesses benefit from under our existing agreement remains in place and there is no change to the UK’s tariff rate."
