President Trump’s new global tariffs draw criticism from trading partners

U.S. trading partners from Canberra to Brasilia reject the forced labor rationale behind President Donald Trump’s new global tariffs, but most have signaled they will continue to negotiate rather than retaliate.

The Office of the U.S. Trade Representative on Thursday took action under Section 301 of the Trade Act of 1974, imposing tariffs on 60 countries for the U.S. government’s failure to impose and enforce prohibitions on products made with forced labor.

The tariffs are 10% for countries that have adopted or committed to import bans and 12.5% ​​for countries that have not, and will affect the top 60 U.S. trading partners and 99.4% of U.S. imports.

The measure replaces the temporary 10% global tariff imposed under Section 122 of the Trade Act, which is set to expire on July 24, and is a stopgap put in place after the Supreme Court ruled in February that President Trump’s emergency powers tariffs were illegal. The forced labor investigation would give the regime a more durable legal basis for the basic tariffs that had been challenged in the courts.

“These tariffs are unjust, violate free trade agreements and should be abolished,” Australian Trade Minister Don Farrell said in a statement. “Australia’s efforts to combat forced labor and modern slavery are among the strongest in the world, and its leadership is recognized globally, including in the United States.”

The United States imposed a 12.5% ​​tariff on imports from Australia, China (including Hong Kong), Singapore, and South Korea for failing to prevent products made with forced labor from entering the U.S. market.

Meanwhile, Malaysia, Taiwan, Indonesia and India continue to face additional 10% tariffs.

Tiancheng Xu, senior economist at the Economist Intelligence Unit, told CNBC on Friday that the impact on Asia’s major economies is likely to be limited.

“Asia will continue to benefit from tariff carve-outs, including most types of electronics, from consumer devices to chips,” Xu said, adding that “these products have been consistently exempted from U.S. tariffs under the second Trump administration.”

Brazil, which was hit with a 12.5% ​​tariff, called the tariffs “arbitrary” and “unjustifiable.” President Luiz Inácio Lula da Silva said he remains open to negotiations, but that if Brazil cannot sell to the United States, it will seek other markets. The new tariffs are on top of the 25% Section 301 tariffs imposed on Brazilian goods this month and reestablish the 37.5% wall, close to the 50% that was struck as illegal last year.

The Chilean government said the measure was inconsistent with the country’s labor standards and the technical, political and legal evidence submitted through investigations, according to a statement from the Undersecretary of Trade in Santiago. Noting that the U.S. resolution does not claim that Chile exports products made with forced labor, it would seek exemptions for major export products.

Canada, which is in the bottom 10% of countries with exemptions for USMCA-compliant products, took the most moderate stance. Canada-U.S. Trade Minister Dominic LeBlanc said in a statement that the move was “not unexpected,” adding that Ottawa shares the U.S. government’s goals on forced labor and will “continue to engage constructively” in the coming weeks.

New Zealand’s Ministry of Foreign Affairs said in a market report that the trade minister had made it clear Mr Wellington disagreed with the findings and would continue to register his position with the US government. Existing exemptions covering around 30% of New Zealand’s exports to the US, including beef and kiwifruit, will remain unchanged.

No major partners have announced countermeasures over forced labor tariffs.

The Peterson Institute for International Economics wrote earlier this week that the investigation is “not an enforcement of labor standards, but a mechanism for exporting the U.S. ban on imports of Chinese goods and an attempt to recreate the tariff system struck down by the Supreme Court.”