Trump’s new tariffs are likely here to stay, and more are coming
US President Donald Trump had no time for lengthy tariff investigations when he returned to office last year, wanting to hammer trading partners right away to wring concessions. What followed was a chaotic start to a trade agenda that was eventually upended by a stinging Supreme Court defeat this year. Now he and his team are moving into a new phase to build a more durable US tariff wall using more traditional and court-tested trade laws, those he had little patience for 18 months ago. His latest global tariff salvo — duties of 10 per cent or 12.5 per cent on 60 countries over allegedly weak enforcement of forced-labour bans — marks the first of numerous tariff actions to be unveiled in the months ahead. They include probes into excess industrial capacity, alleged intellectual property theft by Vietnam, and national security protections for strategic industries from semiconductors to robotics and industrial machinery. “We’re at the end of the beginning of the Trump tariff agenda,” said Dan Ujczo, associate general counsel at Canadian oil producer Cenovus Energy, who specializes in US-Canada trade. “Within the next few weeks, and certainly by the end of the summer, we will see large parts of President Trump’s trade policy fully in effect.” This could bring more clarity and certainty for businesses on Trump’s ultimate tariff structure, along with dread in foreign trade ministries that they may have to cough up more concessions to protect access to a $3.4 trillion US import market. Trump’s new anti-forced labour duties imposed under Section 301 of the Trade Act of 1974, the unfair trade practices statute used against China during his first term, almost directly replace a global 10 per cent temporary tariff that expired on Friday. They cover 99.4 per cent of US imports, the US Trade Representative’s office said. This rebuilds part of Trump’s signature “Liberation Day” tariffs of 10 per cent-50 per cent on nearly every country, which the US Supreme Court struck down as illegal under an untested national emergencies law Trump used to impose them. Another part of the baseline tariffs is likely to be rebuilt by another Section 301 investigation into excess industrial capacity, targeting 16 big trading partners, including China, the EU, Japan, South Korea, Mexico and Vietnam. That ongoing probe targets industrial subsidies and other export-focused policies. Amid a wider uproar over Trump’s move, some viewed it as largely maintaining the status quo. Mark Bissell, CEO of Michigan-based vacuum maker Bissell Inc, said the newest tariffs were largely what the company anticipated and it hadn’t frontloaded inventory from China and elsewhere to try to beat them. “We continued to run the business based on the belief that the tariffs would stay in the 10-15 per cent range,” Bissell said in an email to Reuters. Trump’s gamble on quick but untested tariffs right out of the gate did four things. It heaped added costs onto retailers and other import-dependent industries; it brought dozens of trading partners to the negotiating table, yielding concessions for lower rates; it prompted swift retaliation and tariff escalation from China that led to a delicate truce; and it filled US fiscal coffers with hundreds of billions of dollars. The Liberation Day tariffs alone yielded $166 billion in revenue, a major offset to a growing federal deficit, but refunds to importers have now turned those collections negative. The 150-day temporary tariffs, based on a law meant to quell balance-of-payments crises, have added $31 billion in assessed revenue through July 5. But if a federal court ruling against them stands, that money, too, is subject to refund.