Trump to impose forced labor duties on Friday as temporary 10% US tariffs expire
By David Lawder
July 23 (Reuters) – The Trump administration will impose new tariffs of 10% and 12.5% on Friday on 60 trading partners, including the European Union, over allegations of lax enforcement of forced labor bans as a temporary 10% global tariff expires, senior administration officials said on Thursday.
The move is the latest effort by the White House to revive President Donald Trump’s campaign vision after the U.S. Supreme Court in February struck down “reciprocal” tariffs of 10 percent to 50 percent imposed last year under national emergencies legislation to try to shrink the U.S. trade deficit.
Trump responded by imposing a temporary 10% tariff for 150 days, ending at 12:01 a.m. (0401 GMT) on Friday, using Section 122 of the 1974 Trade Act, which aims to quell balance of payments crises. The new taxes will go into effect at exactly the same time, and goods in transit will be exempt until July 28 at 12:01 a.m. EDT.
A senior Trump administration official disputed suggestions that forced labor tariffs imposed under Section 301 of the 1974 law were a direct replacement for the expiring duties, despite their timing, similar tax rates and broad coverage of nearly all U.S. imports.
The United States has stronger import bans on goods produced with forced labor and enforces them more strictly than other countries, giving competitors an unfair trade advantage over the United States, the official said.
Both Democrats and Republicans in Congress are calling for the elimination of forced labor from global supply chains, “so we’re really answering that call.”
The official added that Trump “will always use the tools at his disposal to achieve his trade policy goals, and that includes tariffs.”
The administration official said many goods would be exempt from the duties, including oil and gas, fertilizer, certain foodstuffs and goods such as automobiles, steel, aluminum and copper that are currently subject to Section 232 national security tariffs.
Other goods eligible for the U.S.-Mexico-Canada Trade Agreement will also be exempt due to the highly integrated nature of the North American supply chain and the high level of U.S. content in the goods.
Section 301’s latest unfair trade practices tariffs largely follow the forced labor taxes proposed on June 1. Goods from countries that have passed adequate anti-forced labor laws will be taxed at a lower rate of 10%, and imports from those with inadequate bans will be subject to a higher rate of 12.5%.
Recent actions and legislation by some countries, including India, have moved them to a 10% tariff rate since the duties were first proposed.
(Reporting by David Lawder)
