Trump's new global tariff regime takes effect and draws lawsuits

Where things stand

The tariff regime has moved from a single contested measure to a widening system with its legal foundation still unsettled. The Section 301 duties of 10% to 12.5%, imposed on some sixty economies over what Washington calls weak enforcement of forced-labour bans, are in force and now cover 99.4% of US imports according to the US Trade Representative, even as the challenge to them proceeds in US courts months after the Supreme Court struck down an earlier round of tariffs. Pressure has increasingly shifted onto individual relationships rather than the regime as a whole. Switzerland has publicly rejected the forced-labour accusations used to justify its rate, disputing the factual basis rather than the level. Mexico is being pressed not merely to absorb US duties but to replicate them, adopting a steel tariff wall aimed at China. Canada remains the sharpest point of escalation, with Ontario's provincial leadership urging Ottawa to use oil, electricity and potash as leverage while the federal government has yet to settle on a response, and Trump has separately threatened fresh measures against the European Union over the bloc's antitrust fine on Google, according to Le Monde, a year after the transatlantic trade agreement meant to stabilise that relationship. Against China the pattern runs the other way: the New York Times reports the average weighted US tariff on Chinese goods has held roughly steady despite repeated White House threats, making the escalation there louder in rhetoric than in effect. Reuters describes a pipeline of further actions behind the current round, covering excess industrial capacity, Vietnam and intellectual property, and national-security measures in strategic sectors, which indicates this is a first instalment rather than an endpoint and gives partners weighing retaliation reason to expect more rather than less. That prospect lands on an already strained backdrop. Brent crude has closed above $100 a barrel for the first time since late May, with the Strait of Hormuz blocked by the US-Iran war and the Red Sea disrupted by Houthi attacks on Saudi oil vessels, removing the alternative export route that cushioned earlier phases of the conflict, and analysts quoted in the reporting warn the energy shock and the new duties compound rather than offset each other. Because the new rates sit only marginally above the universal 10% tariff they replaced, the decisive questions are less about their size than about whether the Section 301 basis survives judicial review after the earlier defeat, how far the administration presses the announced next rounds, and whether disputed justifications such as Switzerland's and coerced alignment such as Mexico's hold or break down.

Since last year the Trump administration has attempted three successive versions of a broad tariff on most US trading partners, each time under a different legal authority. The first, reciprocal duties of 10% to 50% justified as a way to shrink the trade deficit, rested on the International Emergency Economic Powers Act and was ruled unlawful by the Supreme Court in February, which held that the president cannot bypass Congress in this way. A universal 10% tariff introduced in January to replace it was then struck down by the US Court of International Trade, though the court allowed it to remain in force while an appeal proceeded; it lapsed on 24 July 2026. The latest measures were built on a different statute, Section 301 of the Trade Act of 1974, and on forced-labour enforcement grounds. The recurring issue across all three rounds is the limit of executive authority over trade policy, and each round has drawn both diplomatic protest from trading partners and lawsuits from US importers.