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Economy & Trade

US Tariff System Resets Today as New Duties Replace the Expiring Global Levy

The temporary surcharge that has covered nearly all foreign goods since February reached its legal limit at midnight. In its place, the US Tariff system has begun collecting duties of 10% to 12.5% on imports from 60 economies, under a statute the administration hopes will survive the courts. Washington began collecting a new set of…

By Tejanshu Jaluthria · (updated )

The temporary surcharge that has covered nearly all foreign goods since February reached its legal limit at midnight. In its place, the US Tariff system has begun collecting duties of 10% to 12.5% on imports from 60 economies, under a statute the administration hopes will survive the courts. 

Washington began collecting a new set of import duties today, hours after the temporary 10% surcharge that has applied to most foreign goods since February reached the end of its legal life.

The Office of the United States Trade Representative announced the replacement on Thursday. Ambassador Jamieson Greer took what the agency described as final action against 60 economies, imposing tariffs of either 10% or 12.5% on the grounds that those economies have failed to impose or effectively enforce bans on the import of goods made with forced labor.

The new duties cover more than 99% of goods entering the United States. Bloomberg reported that the rates apply to most major trading partners and represent the largest single effort so far to rebuild a tariff structure that the Supreme Court dismantled in February.

Why the legal basis changed

The shift is less about rates than about which law the White House is standing on.

In February the Supreme Court ruled that the International Emergency Economic Powers Act does not give a president the authority to impose tariffs. That decision struck down the reciprocal tariff regime built on the statute and left open the question of whether importers who had already paid are owed refunds.

The administration responded within days by invoking Section 122 of the Trade Act of 1974, which permits a temporary import surcharge of up to 15% for a maximum of 150 days. A 10% global rate took effect on 24 February. That clock ran out at midnight Eastern time.

Congress has not moved to extend it, and the president cannot do so alone. American Action Forum noted that the expiry marks the end of the administration’s second tariff regime in six months.

Section 301 of the Trade Act of 1974 carries neither a rate ceiling nor a time limit. It does require a formal investigation, a public comment period and published findings, which is why the process behind today’s action began in March.

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Who pays what

USTR set two headline rates. Seventeen economies were placed at 10%, on the basis that they either maintain a forced labor import ban, have committed to one through a trade agreement, or operate a partial regime that achieves a similar effect. That list includes Canada, Mexico, India, Indonesia, Malaysia, Pakistan, Bangladesh, Sri Lanka, Cambodia, Argentina, Ecuador, El Salvador, Guatemala, Honduras, Jordan, Trinidad and Tobago and the United Kingdom.

Five more received product specific treatment at either 10% or 12.5%, calculated net of the Most Favored Nation rate. Those are the European Union, Japan, Korea, Switzerland and Taiwan.

Every other investigated economy, a group that includes China, faces 12.5%.

USTR also carved out five categories of exemption. Raw materials whose taxation could cut off domestic supply are excluded, as are products that could cause disruption across the wider economy, goods the United States cannot produce in sufficient quantity or source elsewhere, certain products from economies the agency wants to encourage toward stronger enforcement, and articles where a tariff would not meaningfully change the practice being targeted.

A separate mechanism allows a set volume of apparel and textile imports from certain economies to enter at a reduced rate.

The full list of covered economies and exempted goods sits in the Federal Register notice annexes.

The process behind the decision

USTR opened 60 investigations on 12 March at the president’s direction. Public hearings followed on 28 and 29 April, and the agency held consultations with more than 45 governments.

On 2 June it published its determination that the failures it identified were unreasonable and burdened US commerce. More than 1,600 written comments arrived by the 6 July deadline, and a second round of hearings ran from 7 to 9 July with over 100 witnesses.

Greer said in a statement that decades of moral persuasion had not removed forced labor from global supply chains, and that the United States has enforced its own import ban for close to a century.

The action has not gone unchallenged in Congress. Senator Ron Wyden introduced the Congressional Trade Powers Reform Act on 22 July, which would repeal Section 122 outright and require congressional approval for future actions under Sections 301, 201 and 232.

What is still coming

Two dated measures sit immediately ahead.

On 31 July a Section 232 tariff of 100% takes effect on patented pharmaceuticals and active pharmaceutical ingredients. Unusually, that rate is inclusive of the standard duty rather than stacked on top of it.

On 19 August an additional 50% duty applies to a range of Canadian goods under Section 338 of the Tariff Act of 1930, a statute that had never been used at this scale. Three proclamations signed on 20 July cover autos, alcohol, dairy and a long annex list that reaches into furniture, cement, plywood, clothing and sporting goods. Analysis from Troutman Pepper Locke noted that Section 338 carries no expiry date and that goods otherwise eligible for preferential treatment under the trade agreement with Canada and Mexico receive no exemption.

Energy products, potash, fish, critical minerals and goods already covered by Section 232 are excluded from the Canadian action.

Section 232 duties on metals, autos, semiconductors and timber were untouched by the February ruling and remain in force. Steel, aluminium and copper articles carry 50% on full customs value.

A second cost shock is running alongside

The tariff reset lands in the same week that crude oil broke above $100 a barrel for the first time since May.

Brent settled at $100.65 on Thursday, a gain of 7% in a single session, according to TradingEconomics data. West Texas Intermediate settled at $92.36, up 6.37%. Brent has risen roughly 36% over the past month.

The move followed a missile and drone attack claimed by Houthi militants on two Saudi oil tankers in the Red Sea, an escalation that extends the disruption beyond the Strait of Hormuz. Kazakhstan has separately suspended crude exports through the Caspian Pipeline Consortium terminal after drone attacks, removing barrels traders had treated as insulated from the conflict.

NPR reported that the escalation between the United States and Iran is now feeding directly into global energy markets, with both governments ruling out near term talks.

For importers, the two developments compound. Tariffs raise the landed cost of goods while fuel raises the cost of moving them.

What to watch next

The Federal Register notice will confirm the complete list of 60 economies and the precise scope of the exemptions. Legal challenges to the Section 301 action are widely expected, and the February ruling established that the statutory basis of a tariff can be decisive.

Whether the refund question left open by the Supreme Court is resolved will determine what happens to duties collected between April 2025 and February 2026.

Sources

Note: these URLs contain hyphens as published and cannot be altered.

  1. Office of the United States Trade Representative, USTR Takes Action in Forced Labor Section 301 Investigations, 23 July 2026 
  2. NBC News, live coverage of the tariff announcement and the midnight expiry, 23 July 2026
  3. Bloomberg, full list of the new tariffs on 60 economies, 24 July 2026 
  4. Congressional Research Service, legal analysis of Section 301 authority in the forced labor and excess capacity investigations
  5. American Action Forum, analysis of the Section 122 expiry 
  6. Troutman Pepper Locke, analysis of the Section 338 proclamations on Canadian goods 
  7. TradingEconomics, Brent crude price and historical series 
  8. TradingEconomics, West Texas Intermediate price and historical series
  9. NPR, morning news brief on the escalation and energy markets, 24 July 2026 
  10. USTR, June determination and proposed action in the 60 investigations, 2 June 2026