US Imposes New Tariffs on 60 Partners: A New Era of Protectionism

The Trump administration has moved to implement a sweeping new tariff regime targeting 60 trading partners, citing concerns over forced labour practices. This strategic pivot, effective from July 24, 2026, marks a significant shift in U.S. trade policy as Washington seeks more legally robust methods to build its "tariff wall."

A Legally Fortified Trade Strategy

The latest wave of tariffs follows a significant legal setback for the Trump administration in February 2026, when the U.S. Supreme Court struck down several previous duties. To bypass these legal hurdles, U.S. Trade Representative (USTR) Jamieson Greer has tapped into Section 301 of the Trade Act of 1974. By conducting months-long investigations into forced labour, the administration is attempting to create a "bulletproof" legal foundation for its levies, making them harder to challenge in American courts.

The new duties range from 10% to 12.5%. Countries that have already implemented forced labour prohibitions, such as the European Union, Canada, and the United Kingdom, will face the lower 10% rate. Conversely, nations deemed to have insufficient protections, including China and Japan, will be hit with the higher 12.5% tariff. This tiered approach allows Washington to maintain leverage over its trading partners while providing an incentive for compliance with U.S. standards.

Expanding the Toolkit of Economic Pressure

The announcement indicates that the U.S. is no longer relying solely on broad-based duties but is building a sophisticated "toolkit" of targeted economic measures. Beyond the forced labour tariffs, Washington is currently investigating 16 other economies regarding "excess industrial capacity," a move that could trigger even more duties in the near future.

We are also seeing highly specific retaliatory measures. For instance, President Trump recently ordered 50% tariffs on various Canadian products due to "discriminatory treatment" of American goods in the alcohol, automobile, and dairy sectors. Additionally, a 25% tariff was recently applied to Brazilian goods following a year-long investigation into unfair trade practices. This pattern suggests that the U.S. is increasingly willing to use unilateral trade actions to address perceived imbalances in bilateral relationships.

The move signals a transition toward a more protectionist global economy. While some regions, like the USMCA (U.S.-Mexico-Canada agreement) partners, remain exempt, the overall landscape is becoming increasingly fragmented. The administration’s strategy of using investigations to justify tariffs provides them with the flexibility to modify rates based on the evolving behavior of trading partners.

For major global players, the era of predictable, multilateral trade rules is being replaced by a regime of "fragile deals" and constant negotiation. The U.S. is effectively using market access as a tool of diplomacy, forcing trading partners to align their domestic labour and industrial policies with American interests to avoid punitive costs.

What It Means for India

  • Increased Cost Competitiveness Hurdles: As India is included in the group facing the higher 12.5% tariff due to forced labour concerns, Indian exporters may face significant price disadvantages in the U.S. market compared to EU or UK competitors.
  • Pressure on Domestic Labour Reforms: To mitigate these tariffs or move into the lower 10% bracket, India may face intensified diplomatic pressure from Washington to tighten and formalize its domestic labour laws and enforcement mechanisms.
  • Strategic Uncertainty in Trade Negotiations: The use of Section 301 and "excess capacity" investigations suggests that India’s manufacturing and industrial growth could become targets for U.S. scrutiny, requiring more robust legal and diplomatic preparedness in future trade dialogues.