Morning Edition · Saturday, July 25, 2026BREAKINGPublished at 5:03 PM EDT · New York

Trump Reimposes Near-Universal Tariffs on 60 Economies, Citing Forced Labor

The 10% to 12.5% duties cover roughly 99% of US imports and replace a blanket tariff the Supreme Court struck down in February, and two American companies sued within hours.

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The Trump administration imposed new tariffs of 10% and 12.5% on goods from 60 trading partners early Friday, invoking a forced-labor finding to rebuild a trade barrier that covers about 99% of United States imports. The Office of the United States Trade Representative (USTR) said the levies answer the partners' alleged failure to ban and enforce against goods produced with forced labor, and it brought them under Section 301 of the Trade Act of 1974, which lets a president penalize unfair trade practices after an investigation.

The action landed as an earlier near-blanket 10% duty, imposed under emergency economic powers and struck down by the Supreme Court in February, lapsed. According to USTR, 17 countries face a 10% rate because they adopted some forced-labor restrictions, five face 10% to 12.5% depending on the product, and 38 face 12.5%. The European Union, China, Taiwan, Japan and Switzerland sit at the higher tier, while Canada, Mexico, the United Kingdom and India are at 10%. The notice exempts oil, gas, fertilizer and some foods.

Affected governments rejected the rationale. European Union foreign policy chief Kaja Kallas called the measure a shock and said Washington's justification was "not really grounded", citing European paid leave and labor protections. Chinese Foreign Ministry spokesperson Lin Jian said Beijing "opposes all forms of unilateral tariffs" and that "tariff wars and trade wars do not serve any parties' interests."

The tariffs drew a legal challenge within hours. The spice importer Burlap & Barrel and the watch retailer Collective Horology, represented by the Liberty Justice Center, sued to block the duties, arguing Section 301 confers no power "to tax substantially all imports from substantially all countries at preestablished rates." Trade lawyers are divided on whether the statute is more durable than the emergency powers the court already rejected. Financial markets reacted with limited movement. The S&P 500 and Nasdaq Composite were lower on Friday, headed for weekly losses tied more to concerns over artificial-intelligence spending and Middle East risk, while bond yields edged higher as traders weighed added inflation pressure before the Federal Reserve's July 29 decision.

What this means

The mechanism is a tax on imported goods paid at the US border, which raises input costs for American importers and can pass through to consumer prices. Because the duties reach roughly 99% of imports, the exposure is broad: retailers, manufacturers and households that rely on foreign components or finished goods absorb the cost, while the exemptions on oil, gas, fertilizer and some foods shield energy and agriculture. The timing narrows the Federal Reserve's room to cut, since fresh tariff-driven inflation collides with a slowing economy days before its rate decision, and exporters in the EU, China and East Asia face weaker US demand plus pressure to retaliate.

What to watch

Whether the EU and China announce countermeasures or, as in past episodes, hold for negotiation while diversifying suppliers.
The Federal Reserve's July 29 decision and how officials weigh tariff passthrough against slowing growth.
Progress of the Liberty Justice Center lawsuit and any further legal challenges testing the limits of Section 301.
Product-level exemption carve-outs and early data on passthrough to US consumer prices.

Observations to monitor, not financial advice.

4 sources

Synthesized from: CNBC · Al Jazeera · NPR · CNBC (lawsuit)