US locks in 10-12.5% import tariffs after court defeat
The US is replacing a temporary 10% levy with a tiered 10-12.5% tariff framework covering 99.4% of imports, signalling a durable shift in trade policy despite recent Supreme Court setbacks.
The United States will implement a new tariff regime on Friday, imposing duties of 10% to 12.5% on imports from dozens of major trading partners. The move replaces a temporary 10% global levy introduced in February and effectively locks in a broad baseline cost on 99.4% of goods entering the country.
For markets, the critical detail is the legal mechanism. The Office of the U.S. Trade Representative is using the results of a forced-labour investigation to sustain the administration's trade agenda after the Supreme Court struck down the broader programme built on emergency powers, an approach trade experts consider far more resilient to judicial scrutiny.
The new duties introduce a two-tier system. Countries that have taken measures to address forced labour will face the lower 10% rate, while others, including major partners like China and India, will pay 12.5%. “The president is not going to allow his trade policy and overall objectives to be undermined simply because one tool may be limited by a court or something else,” senior administration officials said.
Importers will not face an immediate cost shock, as businesses have already been paying the temporary 10% rate. However, officials warned the effects will become more noticeable in the months ahead, noting these tariffs could remain in place indefinitely. The administration granted exemptions for oil, gas, and goods that cannot be sourced domestically.
The announcement aims to resolve months of uncertainty for corporate supply chains. “We have heard loud and clear: people want to know what tariff rate they’re going to pay,” one administration official said.
The US is not stopping here. Additional Section 301 investigations are underway, targeting manufacturing overcapacity in China, Mexico and the European Union. Separately, the White House plans to invoke the Smoot-Hawley Trade Act next month to impose a 50% tariff on selected Canadian goods.
