Symbolic imageUS launches third tariff round under forced-labour rationale; lawsuits follow
Washington imposed new duties of 10% to 12.5% on more than 60 economies at 12:01 a.m. on Friday, 24 July 2026, the moment its previous universal 10% tariff expired. The White House based the measures on Section 301 of the Trade Act of 1974 and on allegations that the targeted countries fail to enforce bans on goods made with forced labour. Trading partners from the EU to China, Brazil and Australia objected, and US small businesses filed suit the same day.
What happened
President Trump signed an executive order on Thursday, 23 July 2026, creating a new tariff framework that took effect at 12:01 a.m. on Friday. According to El País and Daily Sabah, the duties range from 10% to 12.5% and cover more than 60 economies; the New York Times describes new tariffs of around 10% on over 80 nations, and El País writes that in practice the regime affects 91 countries. The legal basis is Section 301 of the Trade Act of 1974, which permits tariffs against practices deemed unjustifiable, unreasonable or discriminatory, and the stated justification is that the targeted states do not adequately enforce bans on imports of goods made with forced labour. The order rests on 60 separate investigations and is accompanied by a 55-page annex of product- and sector-specific exemptions, special regimes and country-by-country treatment, and it repeatedly states that if a court strikes down one provision the rest remains in force. Per Daily Sabah, a 10% duty applies to Argentina, Bangladesh, Britain, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka and Trinidad and Tobago; the EU, Taiwan, Japan, South Korea and Switzerland were assigned rates that, combined with existing most-favoured-nation tariffs, total 10% or 12.5%; the remaining 38 countries, including China and Vietnam, face 12.5%. Goods already in transit are exempt until 12:01 a.m. EDT on 28 July. The previous universal 10% tariff expired at the same minute the new one began.
The camps
The administration presents the framework as enforcement of labour standards and, according to El País, designed above all to survive judicial review after two defeats. Trading partners reject the premise. EU foreign policy chief Kaja Kallas called the allegations about the bloc's forced-labour controls unfounded, told Reuters on the sidelines of ASEAN meetings in Manila that European labour law provides paid vacation and good working conditions, and said the bloc would seek clarification from Washington, had honoured its commitments under last year's transatlantic trade agreement and viewed the tariffs as a shock. Daily Sabah reports that China warned against trade wars, while Brazil and Australia called the duties unjustified. Vietnam, hit at 12.5%, issued a decree this week setting out more detailed rules banning imports of goods made with forced labour. In Britain, the Telegraph frames the outcome domestically: Britain will pay higher Trump tariffs than the EU. Inside the United States, small businesses have sued the administration over the new duties, represented by the Liberty Justice Center, the legal group that successfully challenged earlier tariffs.
The view from outside
Turkey's Daily Sabah, outside the directly targeted disputes, aggregates the reaction as dismay and anger and describes the measures as the White House's first step in rebuilding Trump's near-global tariff wall after the Supreme Court struck down the earlier duties. The same report states that the US investigation underlying the tariffs did not provide meaningful evidence to support the forced-labour allegations; this assessment comes from the agency report and is not independently confirmed in the other sources.
What's new
This is the third round of tariffs, and the change lies in the legal architecture rather than the headline rate. The Supreme Court ruled in February that the reciprocal duties of 10% to 50%, imposed last year under the International Emergency Economic Powers Act to shrink the trade deficit, were unlawful, and reminded the president that he cannot bypass Congress. The universal 10% tariff introduced in January to replace them was then struck down by the US Court of International Trade, which allowed it to stay in effect pending appeal, and it expired on Friday. The new order shifts to Section 301, adds severability language and detailed justifications, and grants broad discretion to carve out further exceptions for products that could cause economy-wide disruption or that cannot be produced domestically in sufficient quantity or at reasonable prices.
What could happen next
The litigation route reopens immediately: the small-business suit will test whether Section 301 and the 60 underlying investigations hold up better than the emergency-powers basis did, and the severability clauses mean partial rulings could leave much of the wall standing. Diplomatically, the EU has said it will seek clarification, which could lead to talks over the forced-labour findings, to further enforcement decrees of the kind Vietnam issued, or to countermeasures from partners that consider the duties unjustified. Domestically, the New York Times notes that households and businesses were already contending with an affordability crunch, so the pass-through of the new duties into prices, and the scope of the exemptions the order permits, will shape how much of the cost is absorbed at the border and how much reaches consumers.
United States: Says the targeted countries fail to enforce bans on goods made with forced labour and has built the order on Section 301 and 60 investigations to withstand court challenges.
European Union: Calls the forced-labour allegations unfounded given its labour standards, says it honoured last year's transatlantic trade agreement and will seek clarification from Washington.
China: Warned against trade wars after being placed in the 12.5% band.
Brazil and Australia: Call the new duties unjustified.
Also involved