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The United States Trade Representative imposed tariffs of 10% to 12.5% on imports from 60 economies on July 24, 2026, the latest move in an 18-month effort to maintain sweeping trade levies despite legal challenges. The announcement, timed to the expiry of a temporary 10% global tariff, shifts the legal basis for the policy from emergency powers to the Trade Act of 1974.
Forced Labor Standards as the Legal Basis
The stated justification for the new tariff regime is not trade deficits but labour standards. USTR determined that all 60 economies under investigation failed to either impose or effectively enforce a prohibition on importing goods made with forced labour. This rationale rests on Section 301 of the Trade Act of 1974, the same authority used against China in the first term.
Unlike the previous stopgap measure, this action carries a built-in escalation clause. The 10 to 12.5% rate applies for a two-year transition period. Non-compliant countries then face 100% tariffs for a year, followed by 200% thereafter. Several categories of goods are exempt, including oil, gas, fertilizer, and products covered by the USMCA, which spares the bulk of trade between the United States, Canada, and Mexico.
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Two Tiers of Penalties
USTR split the list of affected nations into two severity tiers. A group of 17 countries, including Canada, Mexico, the European Union, the United Kingdom, and India, faces the lower 10% rate. These economies already have forced-labour import bans in place or made specific labour commitments in trade agreements with Washington.
The remaining 43 countries face the steeper 12.5% penalty. USTR found these economies have no effective enforcement mechanism for forced labour prohibitions. This group spans a vast portion of the global trading system, including China, Japan, South Korea, Brazil, Australia, and Saudi Arabia.
Most of the roster reappears from previous rounds of tariffs. The “Liberation Day” tariffs from April 2025 applied a baseline 10% rate to nearly all partners, with steeper rates for about 57 economies. The current action largely repackages that list under a different legal framework. Russia now sits in the 12.5% tier, an expansion of the tariff net to a country previously excluded due to sanctions. Belarus and North Korea remain excluded, as does Cuba.
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Three Legal Vehicles in 18 Months
The legal architecture of the July 24 action distinguishes it from previous iterations. This is the third distinct statutory basis the administration has used to pursue a similar tariff objective in a year and a half.
April 2025 saw the use of IEEPA, known as “Liberation Day,” which applied sweeping emergency-powers tariffs. However, a 6-3 Supreme Court ruling in February 2026 held that IEEPA does not authorize tariffs, invalidating that measure. A temporary Section 122 surcharge of 10% served as a bridge between the court ruling and the current action. The new Section 301 tariff regime lacks a sunset clause and remains fully in force alongside existing Section 232 sectoral tariffs on steel, aluminium, and semiconductors.
For trade and shipping planners, the practical takeaway is to treat tariff exposure as a durable structural input for affected lanes rather than a transient policy shock. The administration is also pursuing a separate Section 301 investigation into “excess manufacturing capacity” covering 16 countries and 70% of US imports, suggesting further tariff waves are likely.
