U.S. Trade Representative Jamie Grier announced that additional tariff measures to replace the global tariffs expiring on July 24 will be announced soon. President Donald Trump has also unveiled plans for tariffs on Canadian products and generic pharmaceuticals, signaling a renewed focus on U.S. tariff policy following a lull after a Supreme Court ruling.
In an interview with CNBC on July 21, Grier stated, "I expect some measures to be announced soon." He added, "I cannot disclose a specific timeline at this moment, as I have a responsibility to explain the details to Congress and other stakeholders before making them public," while reiterating that action is expected shortly.
The new tariffs are likely to be based on Section 301 of the Trade Act of 1974, which allows the U.S. to respond with tariffs to unfair or discriminatory policies and practices by foreign governments.
The USTR launched an investigation in March into 60 economic zones for failing to adequately prohibit the use of forced labor in supply chains. Preliminary findings released earlier this month suggested imposing a 10% tariff on over ten trading partners, including Canada, Mexico, and the European Union, while a 12.5% tariff could be applied to more than 40 countries, including South Korea, China, India, and Japan.
Grier asserted, "The U.S. has laws prohibiting the trade of goods produced with forced labor, but most other countries lack such laws or do not enforce them properly." He explained that the proposed tariffs would encompass about 99% of U.S. trade.
However, the final tariff rates may differ from the preliminary proposals. Ryan Majerus, a trade attorney and former U.S. Commerce Department official, told the Wall Street Journal that since the trade agreements the U.S. made last year with South Korea, the EU, and Japan set most tariff caps at 15%, it is unlikely that the forced labor tariffs will exceed that threshold.
Additionally, the USTR is conducting a separate Section 301 investigation addressing structural overproduction issues in over ten countries, including China and South Korea. Preliminary tariff proposals related to this investigation could be released as early as next month.
This move coincides with the expiration of the 10% global tariff imposed by President Trump under Section 122 of the Trade Act, which will end at 12:01 a.m. Eastern Time on July 24. Following a Supreme Court ruling in February that deemed reciprocal tariffs based on the International Emergency Economic Powers Act (IEEPA) invalid, Trump temporarily imposed a 10% tariff on nearly all imports. Tariffs under Section 122 can only be maintained for a maximum of 150 days.
Renewed Concerns Over Tariffs
The Wall Street Journal noted that during the temporary tariff period, trade policy stabilized, allowing businesses that had faced frequent policy changes to catch their breath. However, with the new tariff announcement imminent, this period of calm is coming to an end.
Drew DeLong, a former U.S. State Department official and consultant, told the Journal that if Section 301 tariffs are fully implemented, the average U.S. tariff rate, currently around 11%, could rise to approximately 17%, similar to levels before the Supreme Court ruling.
Tariffs based on forced labor concerns may also be politically challenging to repeal. Tiffany Smith, vice president of global trade policy at the National Foreign Trade Council (NFTC), told CNBC, "It will be much harder for the next administration to repeal tariffs imposed to address forced labor," adding that the Section 301 tariffs are likely to last much longer.
The Trump administration is also utilizing other legal frameworks. On July 20, Trump signed three proclamations imposing an additional 50% tariff on certain Canadian products due to discrimination against U.S. goods. This action invoked Section 338 of the Tariff Act of 1930, which has not been used for actual tariff imposition before. CNN analyzed that if the U.S. broadly interprets 'discrimination against domestic products,' it could create a legal pathway to impose high tariffs on other countries.
Greg Hushion, a trade attorney at Polsinelli, told CNN, "Other countries should take this threat seriously," emphasizing that this action demonstrates Trump’s intent to continue using tariff threats to achieve foreign policy goals during his term.
Notably, the new Canadian tariffs will also apply to duty-free items under the United States-Mexico-Canada Agreement (USMCA). CNN remarked that this implies existing trade agreements may not serve as safeguards against tariffs for other countries.
Meanwhile, Trump has also announced a phased tariff plan for generic pharmaceuticals. He stated via Truth Social that he would maintain a 0% tariff on imported generic drugs for two years, followed by a 100% tariff for one year, and then a 200% tariff thereafter.
* This article has been translated by AI.
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