US readies new tariffs as Trump’s 10% global levy to expire

FORCED LABOUR CONCERNS

Greer said Tuesday that new action on forced labour will cover the majority of US trade, with the moves likely to reignite trade tensions.

A 10 per cent tariff rate would hit US imports from partners including Canada, the European Union, Mexico, Taiwan and the United Kingdom. They were found to have taken steps against forced labour.

Goods from over 40 other major economies like China, India and Japan face a 12.5 per cent levy.

The EU previously said that it considers tariffs imposed on these grounds “unjustified”.

CANADA PRESSURE

Washington’s planned 50 per cent tariff on Canada also comes as US-Mexico talks over a North American free trade pact intensify.

Washington recently declined to extend the accord in its current form.

Greer is set to travel to Mexico from Wednesday to Friday for discussions linked to a joint review of the US-Mexico-Canada Agreement (USMCA).

But negotiations with Canada have proceeded at a slower pace. Carney on Tuesday did not suggest that he would head to Washington for talks.

Some lawyers see Trump’s use of an untested legal provision – Section 338 of the Tariff Act of 1930 – as a means to gain leverage over Canada in USMCA negotiations.

Trade lawyer Dave Townsend of Dorsey & Whitney added that higher tariffs “appear to be aimed at encouraging an agreement between Canada and the United States, or in retaliation for the failure to reach such agreement, or both.”.

The question, he said, is whether both sides will start a “cycle of escalation and retaliation”.

Crucially, Trump’s latest salvo will not exempt affected Canadian products entering his country under the USMCA.

Trump told reporters Tuesday that the Canada tariffs were unrelated to his earlier threats over wildfire smoke that descended into the United States.