US to Impose New 10%-12.5% Tariffs on Bangladesh and 59 Other Trade Partners

The United States will begin imposing new tariffs of 10% to 12.5% on goods from 60 trade partners, including Bangladesh, from 12:01 a.m. Friday local time, according to CNN, as the Trump administration turns to an alternative legal route after the Supreme Court struck down some of President Donald Trump’s most aggressive tariffs earlier this year.

The new duties will apply to exports to the United States from trade partners including Europe, China, India and Bangladesh.

In a statement issued thursday by the Office of the United States Trade Representative, the administration said the 60 affected trade partners, including Bangladesh, account for 99.4% of total US imports.

The deadline coincides with the expiry of the 10% universal tariff Trump had imposed after losing a case at the Supreme Court. In a Thursday call with reporters, senior White House officials said, “The president will not allow his trade policy and overall objective to be nullified simply because one tool may be limited by the courts or something else.”

Under the final decision, the United States will impose a 10% tariff on goods from Argentina, Bangladesh, Britain, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, and Trinidad and Tobago.

Brazil, however, rejected a 12.5% tariff on its goods and called for reciprocity. Mexico’s finance minister said in a video message that they were not seeing any major change in effective tariffs.

The measure follows a months-long investigation by the US Trade Representative into the alleged use of forced labour in the production of goods exported to the United States and the failure of various countries to control it. Oil and gas, as well as products not available within the United States, have been exempted from the tariff.

Administration officials said the timing was set to avoid complications created by layering the new tariff on top of the existing 10% tariff. Officials also said business leaders had been seeking a permanent and predictable tariff framework. One official said, “We heard clearly and loudly: people want to know what tariff rate they are going to pay. The core message here is that the president will always use the tools at his disposal to achieve his trade goals.”

The administration said some countries qualified for the 10% rate instead of 12.5% because of action taken against forced labour. Officials said, however, that the administration was not confident the affected countries would quickly eliminate the practice and was therefore prepared to maintain the higher tariff over the longer term.

The change will not immediately raise prices for American consumers because importers have already been paying these tariffs, though that could change in the future.

Several more investigations are under way under Section 301 of the Trade Act of 1974, including one targeting excess production capacity in China, Mexico and the European Union. Trade experts consider Section 301 tariffs to be more legally durable because they are more likely to withstand court scrutiny and can remain in force indefinitely.

The White House has also announced that, from next month, a 50% tariff will take effect on Canadian goods under an unused provision of the Smoot-Hawley Trade Act to raise border taxes.

Sources: Reuters and CNN