Tariffs

Overview

In light of the recent announcements on US tariffs, we share a brief summary of what this means for the European Union:

• The 150-day global 10% tariff authority under Section 122 has since expired. This measure had been introduced by the US Administration following the US Supreme Court’s decision to strike down the tariffs imposed under the International Emergency Economic Powers Act (IEEPA).
• New tariffs under a Section 301 action covering 60 countries have entered into force, following an investigation into forced labor in global supply chains. The tariffs introduced by the Administration under this authority — between 10% and 12.5% — have applied since July 24.
• Imports from the EU fall into the 10% category. For products whose Most Favoured Nation (MFN) tariff is below 10%, the additional Section 301 duty raises the total rate to 10%. For products whose MFN tariff is 10% or higher, no additional duty is applied under Section 301. There is no “stacking” of tariffs. Products covered by Section 232 (for example, steel and aluminum) are exempt and remain subject to the regime currently in force. Certain other products are also exempt.
• Other investigations under Section 301 are also ongoing, notably on industrial overcapacity in Europe and on pharmaceutical pricing policy in Germany.

Information on US tariffs

On July 23, the Office of the US Trade Representative (USTR) published its decision to impose customs duties on 60 economies, following the investigations conducted under Section 301 of the Trade Act of 1974, for failing to impose and effectively enforce a ban on the import of goods produced with forced labor.

According to the decision of the US Trade Representative (USTR):

• A 10% customs duty will apply to the economies under investigation that (i) impose a ban on the import of goods produced with forced labor; (ii) have committed to impose and enforce such a ban through a Reciprocal Trade Agreement; or (iii) have imposed a partial regime with the effect of preventing the import of certain goods produced with forced labor. These economies are: Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago and the United Kingdom;
• A customs duty of 10% or 12.5%, net of most-favored-nation (MFN) treatment, will apply to certain products from the European Union, Taiwan, Japan, Korea and Switzerland that are not otherwise exempt, as explained in detail in the Federal Register Notice; and
• A 12.5% customs duty will apply to all other economies under investigation.

In addition, where feasible, a mechanism for the textile sector in the form of tariff-rate quotas (TRQs) for Bangladesh, Cambodia, Indonesia and Malaysia, based on each of these economies’ imports of US raw materials, with the aim of encouraging each of them to import US cotton and textile products, so as to reduce dependence on raw materials from other sources that are more likely to involve forced labor.

The additional customs duties apply from 12:01 a.m. (US Eastern time) on July 24, 2026. Goods loaded onto a vessel at the port of loading and in transit on the final mode of transport before 12:01 a.m. (US Eastern time) on July 24, 2026, and entered for consumption or withdrawn from warehouse for consumption before 12:01 a.m. (US Eastern time) on July 28, 2026, will not be subject to this additional customs duty.

Exceptions:

(a) raw materials which, if subject to these customs duties, could lead to the unavailability of domestic supply

(b) products on which the imposition of these customs duties could cause economy-wide disruption

(c) products that cannot be grown or produced in sufficient quantities or at reasonable prices in the United States, or obtained from other sources

(d) certain products from Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union*, Guatemala, Indonesia, Jordan, Malaysia, Switzerland, Taiwan or the United Kingdom that would encourage these economies to meet commitments on banning imports involving forced labor or to enact and effectively enforce a ban on imports involving forced labor

(e) articles for which these customs duties may not contribute substantially to eliminating the acts, policies and practices found to be actionable in the investigations

*This exception applies to the following product classifications:

3823.11.00; 3823.12.00; 3823.19.20; 3823.70.40; 4501.10.00; 4501.90.20; 4501.90.40; 4502.00.00; 4503.10.20; 4503.10.30; 4503.10.40; 4503.10.60; 4503.90.20; 4503.90.40; 4503.90.60; 4504.10.10; 4504.10.20; 4504.10.30; 4504.10.40; 4504.10.45; 4504.10.47; 4504.10.50; 4504.90.00; 5004.00.00; 5005.00.00; 5006.00.10; 5006.00.90; 5007.10.30; 5007.10.60; 5007.20.00d; 5007.90.30; 7101.10.30; 7101.10.60; 7102.10.00; 7102.31.00; 7102.39.00; 7103.10.20; 7103.10.40; 7103.91.00; 7103.99.10; 7103.99.50; 7205.10.00; 8112.92.07.

Severability clause:

The decision of the US Trade Representative (USTR) also includes a provision stating that each tariff action: «is intended to operate independently of the others, and any invalidity of a tariff action taken in this Notice should not affect any other tariff action».

The text reads as follows: «Should a court find invalid the implementation of any tariff action taken by the Trade Representative in this Notice with respect to any Section 301 investigation, only that tariff action in that investigation should be considered invalid, and any other tariff actions taken in this Notice with respect to that investigation, or to any other investigation, as well as the remainder of the actions provided for in this Notice, should continue to apply and should not be affected», and further: «Should a court find invalid any aspect of any tariff action taken by the Trade Representative in this Notice with respect to any Section 301 investigation, only that aspect of that tariff action should be considered invalid.

This decision follows the publication on June 2, 2026, by the United States Trade Representative (USTR), of a Report under the Section 301 investigation into the failure to adopt measures against trade in goods produced with forced labor. That report in turn followed the launch, on March 12, 2026, of an investigation against 60 US trading partners, including the European Union, on the grounds that these countries had failed to impose and effectively enforce a ban on the import of goods produced with forced labor.

The USTR Report:

1. Sets out the USTR’s findings in the investigation and determines that “all the economies investigated failed both to impose a ban on the import of products produced with forced labor and to effectively enforce such a ban».
2. Categorizes the economies investigated as follows:

• 54 economies failed to impose and effectively enforce a ban on the import of goods produced with forced labor, namely: Algeria; Angola; Argentina; Australia; Bahamas; Bahrain; Bangladesh; Brazil; Cambodia; Chile; People’s Republic of China; Colombia; Costa Rica; Dominican Republic; Egypt; El Salvador; Guatemala; Guyana; Honduras; Hong Kong; India; Iraq; Israel; Japan; Jordan; Kazakhstan; Kuwait; Libya; Malaysia; Morocco; New Zealand; Nicaragua; Nigeria; Norway; Oman; Peru; Philippines; Qatar; Russia; Saudi Arabia; Singapore; South Africa; South Korea; Sri Lanka; Switzerland; Taiwan; Thailand; Trinidad and Tobago; Turkey; United Arab Emirates; United Kingdom; Uruguay; Venezuela; and Vietnam.
• Six economies failed to effectively enforce the ban on the import of goods produced with forced labor, namely: Canada; Ecuador; the European Union; Indonesia; Mexico; and Pakistan.

1. Concludes that the failure to impose or effectively enforce a forced labor ban:

• undermines the universal goal of eliminating forced labor;
• allows companies that use forced labor to produce goods at lower cost, thereby distorting market conditions for companies that do not use forced labor;
• harms the profitability of companies that do not use forced labor; and
• contributes to the evasion of existing bans on the import of products made with forced labor.

1. Proposes specific measures/actions for public consultation:

• an additional duty rate of 12.5% for the 54 economies that have neither imposed nor effectively enforced a ban on the import of goods produced with forced labor;
• an additional duty rate of 10% for the 6 economies that have not effectively enforced a ban on the import of goods produced with forced labor;

Note: exceptions will apply to: (1) «all articles and parts» subject to national security tariffs under Section 232 of the Trade Expansion Act of 1962; (2) «raw materials which, if subject to the proposed additional tariffs, could lead to the unavailability of domestic supply;» (3) «products which, if subject to the proposed additional tariffs, could cause economy-wide disruption, and certain products that cannot be grown or produced in sufficient quantities in the United States or obtained from other sources.»

• a mechanism for the textile sector that would allow a certain volume of textile and apparel imports from certain economies to enter the United States at a reduced tariff rate under Section 301.