EU Signals Acceptance of New US Tariffs on Forced Labor Goods
Quick Look
- The European Union indicated it could accept new 10% US tariffs on goods made with forced labor, largely adhering to a transatlantic trade truce cap.
- While Brussels welcomed the adherence to the cap, it remains wary of ongoing US investigations that could lead to further duties.
AI-generated summary
Why It Matters
The US imposed new tariffs on EU exports over alleged forced labor, largely adhering to a previous transatlantic trade truce. The EU, while accepting the immediate terms, expressed concern over potential future duties from ongoing US investigations.
BRUSSELS — The European Union on Friday signaled it could live with new U.S. tariffs imposed over its alleged failure to ban imports made with forced labor after President Donald Trump largely stuck to the terms of a transatlantic trade truce.
Washington on Thursday slapped new double-digit tariffs on dozens of U.S. trading partners, including the European Union, scrambling to rebuild its “tariff wall” which was struck down by the Supreme Court in February.
EU exports will be subject to a 10 percent duty, which, unlike many other countries, won’t come on top of the “most favored nation” duties. Under their transatlantic tariff truce struck at Turnberry in Scotland last year, Washington commits to cap the tariffs imposed on most EU goods at 15 percent.
“The EU notes positively the fact that this outcome is in line with the U.S. tariff commitments agreed under the EU-U.S. Joint Statement,” said Olof Gill, deputy chief spokesperson for the European Commission.
While Brussels cautiously welcomed these new tariffs, it is still conscious that more investigations — looking at alleged industrial overcapacity in Europe and pharmaceutical pricing policies — are under way, meaning cumulative duties could ultimately breach the 15 percent cap. Those probes are conducted under Section 301 of the U.S. Trade Act of 1974, a tool used by Washington to take action against unfair trade practices by other countries.
“Looking ahead, the EU expects the U.S. to continue abiding by the terms of the EU-U.S. Joint Statement, including as regards any remedies under additional Section 301 investigations,” Gill added.
The new U.S. tariffs follow a five-month investigation into efforts to crack down on imports of goods made with forced labor — a measure specifically combating manufacturing from America's trade rivals in Asia.
The EU’s own forced labor regulation will only apply from Dec. 2027. This is the justification cited by the U.S. Trade Representative for applying a 10 percent tariff on goods coming from the bloc.
The EU’s foreign affairs chief Kaja Kallas struck a less diplomatic note, pushing back against Washington’s reasoning to impose the tariffs.
“We had a deal with America and we have kept to that deal, that side of the deal. That's why this is a negative surprise that this agreement is not kept,” she told Reuters on the sidelines of a meeting with ASEAN countries in the Philippines.
“If you compare our labor laws to the ones of the United States, I mean, we have paid vacations, we have very good labor conditions for our employees, so it's not really grounded.”
What to Watch
AI outlook — possibilities, not facts
The US will continue Section 301 investigations into alleged industrial overcapacity and pharmaceutical pricing.
Very likely · Within months
Open Questions
- What will be the outcome of the ongoing Section 301 investigations?
- How will the EU respond if cumulative duties breach the 15% cap?
