Foreign
Tariff rates of up to 12.5% will replace the US’s expiring global tariffs at midnight.
Ben Werschkul
THE Trump administration on Thursday announced the replacement for 10% “global tariffs” that expire at midnight. They will be immediately supplanted by a suite of new duties that Trump’s team hopes will be permanent and will go into effect at 12:01 a.m. ET on Friday, levying rates of 10% to 12.5% on America’s top trading partners.
Trump’s trade office said in a fact sheet that this order will apply to 60 of the top US trade partners and cover 99.4% of U.S. imports.
These duties will be imposed under Section 301 of the Trade Act of 1974 and are coming into force at the end of a months-long investigation focused on the issue of forced labor.
A senior administration official previewed this week’s action on Thursday by calling it the “most sweeping international labor rights action the United States has ever taken,” while downplaying the notion that this was done simply to replace the expiring tariffs.
“We are implementing this at this moment really to avoid complexity,” the official said, noting that steady tariff rates would be better for businesses.
The new tariffs will impose a 12.5% rate on trading partners from China to Australia to Egypt, according to the formal Federal Register Notice. Other economies, including the European Union, Indonesia, and Mexico, will receive a 10% rate.
The new tariffs will also provide a series of exemptions for goods in transit, as well as for goods subject to other trade agreements and tariff authorities.
Goods already subject to separate national security tariffs — notably steel and aluminum — will not see a doubling up of tariffs, and goods exempted from duties by the United States-Mexico-Canada Agreement (USMCA) will remain largely tariff-free.
Specific goods will also be exempted under these new duties to avoid economic turmoil in the US. These include big-ticket items like oil and natural gas as well as smaller-ticket items that aren’t produced in the US, like cork from Europe. The formal notice includes hundreds of pages of exemptions.
Thursday’s announcement is the latest twist in the president’s attempt to reimpose tariffs after the Supreme Court struck down his blanket tariffs in February. It comes during a busy week in trade policy that has also seen the president threaten 50% tariff on a variety of Canadian goods and 100% tariffs on generic drugs beginning in 2028.
‘Our policy remains the same’
Earlier this week, US Trade Representative Jamieson Greer told lawmakers during a congressional hearing that Trump still believes trade issues constitute a national emergency for the US.
“Our policy remains the same,” Greer told lawmakers. “The specific authorities this administration is using have changed, but the trade strategy has not.”
Thursday’s move appears set to make these so-called Section 301 duties — a longstanding authority used by Trump and former President Joe Biden that gives the president wide latitude to impose tariffs if his team decides that US commerce is restricted — the centerpiece of Trump’s tariff authority for the remainder of his term.
These duties will replace the current 10% tariffs imposed by the Trump administration in February under a different authority: Section 122 of the Trade Act of 1974. Those tariffs were imposed after the Supreme Court struck down Trump’s blanket tariffs but carried a 150-day expiration date.
Thursday’s announcement largely tracks with the initial findings of the investigation, first reported by the administration in June, which included similar recommendations for a mix of 10% tariffs on some countries and a 12.5% rate for others.
But some countries did see their tariff rates change since those findings were released: India moved from a 12.5% rate to 10% because of what the White House viewed as positive steps from that nation on the forced labor issues.
The bottom line for many importers is that, come Friday, their tariff rates won’t be dramatically different. A recent reading of the US overall effective tariff rate from the Yale Budget Lab found an 11.8% rate across the US economy, with these new duties expected to bring that rate up a percentage point or two.
Still, Thursday’s announcement is not expected to be the end of Trump’s new tariffs. The US is expected to push rates up further later this year as Trump and his team finalize an investigation into excess structural capacity, focusing on goods from China, the EU, and 16 other trading partners. That investigation continues and is on pace to reach its conclusion in the months ahead.
In an analysis this week ahead of Thursday’s announcement, Simon MacAdam of Capital Economics predicted that these coming excess capacity tariffs will “serve as top-up tariffs to return overall US tariff levels to those in place” before the Supreme Court’s ruling in February.
The senior administration official who briefed reporters on Thursday described the president as eager to maximize tariffs for the remainder of his time in office saying Trump’s message was “I only have two and a half years left, we need to deal with these unfair trade practices.”
YahooFinance
A.I
July 24, 2026
Tags: Simon MacAdam