US imposes new forced labor tariffs on China and other trade partners

Liberation Day has a long half-life.

On July 23, the Trump administration imposed tariffs of between 10% and 12.5% on 60 countries, alleging that they hadn't done enough to prevent the import of products made with forced labor.

• China was one of the lucky countries, and is subject to a 12.5% rate.

We knew this was coming: The US Trade Representative (USTR) launched a Section 301 investigation into forced labor back in March.

• The move has been widely seen as a bid to use a different legal authority to reimpose US President Donald Trump's "Liberation Day" tariffs which were struck down by the US Supreme Court in February.
• The results of an additional USTR investigation into industrial overcapacity are still pending.

Per Reuters:

• "The new tariffs…cover 99.4% of U.S. imports, but include numerous product exemptions, such as oil and gas, fertilizer and certain food items."

Get smart: The fact that China wasn't singled out and that the new duties merely aim to re-establish Washington's previous tariff rate mean Beijing is highly unlikely to retaliate.

Get smarter: Beijing remains focused on following through on the tariff reductions agreed by the US and China during Trump's May visit and on ensuring that Xi Jinping's upcoming visit to the US is a success.