The US expanded the coverage of the 10% tariff involving nearly 60 economies and many countries in the European Union criticized the escalation of Trump's protectionism

The Zhitong Finance App learned that the US government officially expanded the basic tariff coverage by 10% on Friday, implementing new import tariff measures on nearly 60 trading partners and the European Union, further consolidating the protectionist trade policy promoted by US President Trump. Although many countries have expressed dissatisfaction with this and criticized the relevant measures for lack of basis, no signs of impending retaliatory measures have been released, and the overall reaction of the global stock market is lackluster.

According to a 431-page document published by the Office of the United States Trade Representative in the Federal Register, the US will levy 10% to 12.5% tariffs on imported goods from nearly 60 countries and the European Union in accordance with section 301 of the 1974 Trade Act. The new measures will officially take effect on Friday, replacing the 10% global import tariff due that day.

The US government said that the reason for imposing tariffs this time is that the relevant economies have failed to effectively prevent forced labor in the supply chain.

Bloomberg Economic Research estimates that after the implementation of the new policy, the average actual US tariff rate will rise from 10.6% to 10.7%.

According to the new regulations, about 10 trading partners found to have imposed forced labor restrictions, including Mexico, the United Kingdom, Canada and India, will apply 10% tariffs on their products; the maximum commodity tax rate in the EU and Taiwan; the overall commodity tax rate in Japan, Switzerland, and South Korea will be limited to 12.5% to comply with their respective trade agreements with the US; most goods from dozens of other economies will be subject to a 12.5% tax rate, and some products will also be subject to additional tariffs.

At the same time, the US has also set a certain scope of exemptions, including products that cannot be produced by the US, products that may cause an impact on the supply chain of the entire industry, and products such as fuel, food, fertilizer, automobiles, steel, aluminum, pharmaceuticals, etc. that have already been subject to industry tariffs. Additionally, products covered by the US-Mexico-Canada Agreement (USMCA) will continue to enjoy exemptions.

Many governments have expressed their dissatisfaction with the latest US measures.

New Zealand Trade Minister Todd McClay said that the US move was “very disappointing, but not surprising”. Trump advocated raising tariffs during the election campaign, but now he is only fulfilling related promises.

Australian Trade Minister Don Farrell said that the new US tariffs “have no justification” and violate the free trade agreement between the two sides, and that the US side should cancel the relevant measures.

Singapore Foreign Minister Vivian Balakrishnan said the new tariffs lacked economic rationality; the Japanese government also expressed concerns and sought confirmation that the new measures were in line with the trade agreement reached with the US last year.

The EU, on the other hand, said that the EU commodity tax rate remains at the upper limit of 10%, which is in line with the trade agreement reached between the two sides in the past year, and will help the two sides continue to promote more tariff exemptions and deepen economic and trade cooperation.

However, market participants believe that the biggest risk at present is still the follow-up policy.

Olu Sonola, head of US economic research at Fitch Ratings, said that another 301 investigation initiated by the US on overcapacity is still ongoing, and further tariffs may be imposed on other economies in the future. If relevant measures are finally introduced and the overall tariff level is brought back close to the high level of 2025, market uncertainty will rise significantly, and the impact on economic growth and inflation will also be more obvious, especially in the context of continued high energy prices.

Currently, the US government is carrying out another 301 investigation on the issue of overcapacity among trading partners, but there is still great uncertainty about when the survey results will be announced and whether they will be implemented in combination with the current tariffs.

Analysts pointed out that the introduction of the new tariffs comes at a time when domestic inflationary pressure in the US is still stubborn and the situation in the Middle East is driving up energy prices, and is also putting the Trump administration under greater political pressure. As the US midterm elections approach, tariffs may further push up import costs and living costs, becoming important variables affecting the US economy and corporate profits.

Furthermore, the US has continued to expand the scope of trade investigations recently. On July 15, the United States announced the imposition of 25% tariffs on some Brazilian imports in accordance with section 301 of the 1974 Trade Law; this week, Trump also proposed imposing tariffs on some Canadian goods based on “Section 338,” which has hardly been used before. The relevant measures will take effect as soon as August 19. The specific implementation will still depend on the progress of negotiations between the two sides.