The US has imposed new tariffs on more than 80 countries, replacing an expiring global duty introduced earlier this year. The measures, ranging from 10% to 12.5%, affect the UK, Mexico, Canada, Australia, India, China and the 27 EU nations.
The tariffs are imposed under Section 301 of the US Trade Act of 1974. The Trump administration says they are due to dozens of countries failing to enforce bans on goods produced by forced labour.
Global Market Reaction
Asian stock markets fell sharply overnight. Japan's Nikkei 225 dropped 3.1%, China's SSE Composite fell 1.4%, Hong Kong's Hang Seng index slumped 11.4%, and South Korea's Kospi declined 6.2%.
European markets were mixed. The Stoxx 600 fell 0.7% before steadying to a 0.1% drop. France's CAC 40 initially fell almost 1% before rising 0.12%. Germany's Dax fell 8% before climbing 0.51%. The UK's FTSE 100 rose 0.28% in early trading.
Allies Question Rationale
EU foreign policy chief Kaja Kallas said: “You can’t say that for the European Union. If you compare our labour laws to the ones of the United States, I mean, we have paid vacations, we have very good labour conditions for our employees, so it’s not really grounded.” She added: “We had a deal with America, and we have kept to that deal, that side of the deal. That’s why this is a negative surprise that this agreement is not kept.”
Australia and Brazil described the tariffs as unjustified. Norway's foreign minister said there was no basis for the tariff against Norway because the country already has “clear rules that are intended to prevent trade in goods produced using forced labour”.
Chinese foreign ministry spokesperson Lin Jian said: “We oppose all forms of unilateral tariff measures. Tariff wars and trade wars are not in the interests of any party.” New Zealand's Prime Minister Christopher Luxon called them “extremely disappointing” and said the US had not provided “meaningful evidence to support claims in relation to forced labour”.
US Justification and Criticism
US Trade Representative Jamieson Greer said the US had rigorously policed its own forced labour import ban for almost a century, adding: “It’s well past time for our trading partners to do the same.” Critics argued the measure was an effort to rebuild Trump's tariff wall after the Supreme Court struck down many of his duties in February.
Richard Neal, the top Democrat on the US House Ways and Means Committee, said: “Today’s forced labour justification is too convenient to be taken seriously. Forced labour is a real and pervasive problem in our supply chains and demands serious enforcement. It should never be cheapened into a pretext for a tariff policy built on dubious legal theories and personal grievances.”
Former US trade official Ryan Majerus said the Trump administration had been hunting for options to aggressively deploy tariffs. The new measures were planned after months of investigation and are considered more resistant to legal challenges.
Country-Specific Impacts
Countries that have implemented a forced labour import prohibition or committed to do so received the lower 10% rate, including Canada, the EU, India and the UK. A UK government spokesperson said: “There is no change to the tariff rate facing UK businesses as a result of this announcement. The UK remains on a 10% tariff rate and the preferential access secured under our agreement with the United States remains in place.” He added: “We take forced labour very seriously and ensure that in global supply chains UK businesses are not complicit in forced labour and human rights violations. The US has recognised the steps the UK is taking, which is why there are no additional tariffs for the UK under this announcement.”
China, Japan, South Korea and dozens of others received the higher 12.5% tariff. Japan's chief government spokesperson Minoru Kihara said the country's industry and trade were “conducted in accordance with international rules”, adding that Tokyo regretted the new US measures.
In Ontario, officials were preparing to open a new bridge to the US over the Detroit River. A joint celebration with US officials was cancelled after Trump announced a 50% tariff on Canadian goods. Government officials said the latest news was “not unexpected”.
Friday's measure is unlikely to be the last word from the White House on tariffs. Washington is separately investigating 16 economies for alleged excess industrial capacity, which experts warn will probably lead to additional duties.
