Trump Launches 10-12.5% Tariffs on 60 Nations; China Vows Countermeasures July 28

President Trump imposed tariffs of 10% to 12.5% on 60 trading partners, effective July 24, 2026, covering 99.4% of U.S. imports. The shift to Section 301 forced-labor grounds marks a legal pivot that analysts say transforms tariffs from negotiating leverage into permanent U.S. economic policy. China rejected the forced-labor rationale and reserved the right to retaliate.

Why Trump switched legal grounds for the tariffs

The new tariffs replace a 10% baseline duty that expired July 24. Unlike prior tariff waves, Trump’s administration invoked Section 301 of the 1974 Trade Act, citing 60 economies’ failure to ban forced-labor imports. This legal shift matters: the U.S. Supreme Court ruled prior tariffs unlawful in February 2026, blocking reliance on the International Emergency Economic Powers Act. The new framework closes that loophole, analysts said.

Market reaction was muted but risks remain elevated

Stock markets barely moved Friday despite the tariff launch, a stark contrast to April 2025’s “liberation day” announcement that triggered sharp selloffs. Investors had already priced in the duty replacement. However, Emma Moriarty, portfolio manager at CG Asset Management, warned the context is grimmer: oil prices rebounded above $100 per barrel last week as Middle East conflict persists, and supply chain bottlenecks are worsening.

China rejects forced-labor claim and signals retaliation

China’s commerce ministry said the forced-labor pretext is false and that it enforces strict labor laws. The ministry noted the U.S. itself has not ratified the 1930 Forced Labor Convention. China confirmed it has already imposed countermeasures on fentanyl-related tariffs and equivalent duties, and said replacement tariffs on Chinese goods now stand at 12.5%, below the 20% ceiling promised in prior trade talks. The ministry reserved the right to take “all necessary measures” in response.

Tariffs now pose a structural drag on growth and inflation

Analysts say the shift to Section 301 signals tariffs are no longer temporary leverage but a permanent pillar of U.S. policy. Russ Mould, investment director at AJ Bell, noted the tariff blitz adds uncertainty amid renewed U.S.-Iran conflict and tech spending concerns. The combination of higher tariffs, elevated oil prices, and supply chain strain is pushing markets toward a “low growth and high inflation” scenario, forcing investors to reprice risk across equities and bonds.

Final Thoughts

The new tariffs are structurally different from prior waves: backed by a legal framework that survived court challenge and deployed amid energy shocks and supply chain strain. Investors must brace for persistent inflation and slower growth, with China’s retaliation likely to escalate trade tensions further.

FAQs

Disclaimer:

The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.