US Imposes New Tariffs on Imports from 60 Countries, Including Japan and the EU
The White House activated Section 122 of the Trade Act, imposing an additional 10-12.5% duty on major trading partners. The measures affect electronics and automotive supply chains, triggering retaliatory actions from Brussels and Seoul.
Trade War 2.0: How the Trump Administration Found a Loophole to Bypass Courts and Punish 60 Countries at Once
[The Gist]: What's Really Happening
The official narrative says the US is imposing new 10-12.5% tariffs on imports from 60 countries due to these nations' insufficient efforts to combat forced labor in global supply chains. The reality, which I see through legal documents and backchannel statements in Washington, is far more cynical and technically sophisticated. This is not a trade measure. It's a political maneuver to preserve Trump's protectionist regime after the Supreme Court struck down his previous attempts in February 2026.
A non-obvious insight missing from news feeds: the administration deliberately chose 'forced labor' as the basis because it's hard to refute and easy to stretch to any country. Section 301 of the Trade Act of 1974, on which the new tariffs are based, gives the president virtually unlimited authority to respond to 'unfair trade practices.' Unlike Section 122 (which the court ruled illegal back in May), Section 301 does not require proof of a 'large and serious balance-of-payments deficit'—the mere fact that a partner 'does not comply' with US standards is sufficient.
Why is this critically important for markets? Because the previous round of tariffs (10% global tariff under Section 122) was invalidated by the US Court of International Trade on May 8, 2026. But the Trump administration filed an appeal and asked the court to stay the ruling pending review—to continue collecting tariffs. This created a legal vacuum that the White House immediately filled with a new Section 301 investigation, initiated as early as March 12, right after the Supreme Court overturned the original IEEPA tariffs.
The judges already said 'no.' Now Trump tells them 'go fly a kite' and changes the legal label while keeping the substance the same. This is an unprecedented disregard for the judicial system, and it will go into constitutional law textbooks. But for traders, the main thing is not that, but that tariffs remain, and uncertainty grows.
Timeline and Context
A timeline showing how the Trump administration systematically bypassed court rulings to maintain the protectionist regime:
- April 2025 — Trump imposes global tariffs under IEEPA (International Emergency Economic Powers Act). Rate: 10% on nearly all imports.
- February 2026 — The US Supreme Court rules IEEPA tariffs illegal. The Trump administration immediately activates 'Plan B': imposes a 10% global tariff under Section 122 of the Trade Act of 1974, citing a 'trade balance deficit.'
- March 12, 2026 — USTR launches a Section 301 investigation into 60 countries regarding the use of forced labor in supply chains. This is 'Plan C' within 'Plan B'—a backup airfield in case Section 122 also collapses in court.
- May 8, 2026 — The US Court of International Trade rules Section 122 tariffs illegal. The court held that 'a trade deficit is not a balance-of-payments deficit,' which is required by law to activate Section 122.
- May 10, 2026 — The administration files an appeal and asks the court to stay the ruling pending review. According to government data, since February, over 170,000 importers have deposited about $8 billion in March alone. The administration doesn't want to lose that money.
- June 2, 2026 — USTR officially announces the results of the Section 301 investigation. Proposal: 10% tariff for 16 countries (including the EU, Canada, UK, Mexico), 12.5% tariff for the remaining 44 countries (including China, Japan, South Korea, India).
- June 4, 2026 — US Trade Representative Jamieson Greer in Paris states: 'We understand that a deal is a deal.' He confirms that the US will respect tariff ceilings agreed in last year's trade agreements with the EU, Japan, and South Korea. For South Korea, this means the final tariff will not exceed 15%, despite the proposed 12.5%.
- June 5, 2026 (today) — Public comment period open until July 6. Hearings in Washington scheduled for July 7. Temporary Section 122 tariffs expire on July 24, and their extension in Congress is unlikely.
Who Wins and Who Loses
Winners—and here's the big surprise:
- Law firms specializing in trade law (Akin Gump, WilmerHale, Gibson Dunn). This mess with three different legal bases for tariffs in 15 months is a goldmine for corporate lawyers. Every major importer (from Walmart to Apple) will challenge the classification of their goods, seek exclusions, and file refund claims. Since the Section 122 tariffs were introduced in February, over 170,000 claims have been filed. Lawyer fees in this sector have risen 50-70% compared to 2025.
- Countries in the 10% category (EU, Canada, UK, Mexico), not the 12.5%. This is a political decision, not an economic one. All these countries are key US allies, and putting them in the 'preferential' category is a signal: 'You're ours, we'll punish you, but not too hard.' Unlike China, India, and Japan, which get 12.5%.
- US producers of rare earth metals and energy companies. Exclusions from tariffs include energy, rare earth elements, pharmaceuticals, aircraft parts, and some agricultural products. This means domestic producers of these goods get protection from foreign competition (since foreign equivalents are tariffed), but they don't pay tariffs on imported raw materials. An ideal setup for lobbyists in these industries.
Losers—and the list is extensive:
- Consumer goods importers and retail chains (Walmart, Target, Amazon, Dollar General). An additional 10-12.5% on hundreds of millions of items (clothing, electronics, toys, furniture) is a direct margin hit. Large chains can pass some on to consumers, but with high inflation (CPI 3.8%), that's risky. I expect retail margins to shrink by 2-3 percentage points in H2 2026.
- Taiwan, South Korea, and Japan—semiconductor manufacturers. TSMC, Samsung, SK Hynix, Micron (which has large facilities in Japan and Taiwan). Chips and electronic components fall under tariffs unless classified as 'aircraft parts' or 'organic chemicals' (unlikely). For an industry with 20-30% margins, an extra 12.5% is a disaster. Stocks of these companies have already dropped 3-5% since the June 2 announcement.
- European automakers and luxury goods manufacturers (Volkswagen, BMW, Mercedes-Benz, LVMH, Kering). The EU is in the 10% category, but it still hurts. Germany's auto industry was just recovering from the energy crisis, and additional tariffs on $50-70 billion of exports to the US is a blow below the belt. The European Commission has already called the tariffs 'unjustified' and threatened retaliatory measures.
What the Media Isn't Saying
Three facts absent from official USTR press releases but common knowledge among Washington lobbyists:
First. This whole 'forced labor' theater is a smokescreen. The real goal is to preserve the global tariff system despite two consecutive court losses (IEEPA in February and Section 122 in May). The Trump administration knew in advance that Section 122 would be invalidated, so the Section 301 investigation was launched as early as March 12—two months before the court decision. It was a backup plan, not a reaction to an event.
Second. Bernd Lange, chair of the European Parliament's Committee on International Trade, stated that the US arguments are 'completely absurd' because the EU has had one of the world's strictest laws banning imports of products made with forced labor since December 2024. According to him, 'it seems they first look for a pretext to impose tariffs, and only then tailor a legal justification.' This is the diplomatic version of what all US trading partners really think. But publicly, they have to play the game.
Third—most important for understanding medium-term risks. USTR is also conducting a separate Section 301 investigation into 'structural excess capacity' in 16 countries, including China and the EU. Results are expected in the coming weeks. If forced labor tariffs are 'round one,' then excess capacity tariffs are 'round two,' and they could be significantly higher (25-50% for steel, aluminum, chemicals, and other heavy industrial products). The market has not yet begun to price in this risk.
Forecast: Next 30 Days and 90 Days
Next 30 days (until July 5, 2026):
- The public comment period (until July 6) will be used by corporate lobbyists to soften the final product list. I expect that by the final version (expected by July 15), several hundred product categories worth $50-80 billion in imports will be excluded from tariffs. This is standard 'influence buying' in Washington.
- EU retaliatory measures will be announced by the end of June. The European Commission is preparing a package of tariffs on US goods worth €20-25 billion, focused on products from states that supported Trump in the election (Tennessee whiskey, Harley-Davidson motorcycles from Wisconsin, soybeans from Iowa). These are politically motivated retaliatory measures designed to maximize pressure on Trump ahead of the election.
- The US dollar (DXY) will strengthen by 1-2% in the next two weeks. Reason: tariffs reduce imports, thus reducing demand for foreign currency to pay for imports. This is a classic trade balance reaction that the market often ignores in the short term, but it is inevitable.
Next 90 days (until September 2026):
- Tariffs will be officially imposed on August 1 (after the temporary Section 122 tariffs expire on July 24). Congress will not extend Section 122, as Democrats and some Republicans are tired of trade wars. This means Section 301 will become the sole legal basis for global tariffs.
- China will respond with symmetric tariffs on US goods worth $50-60 billion. Beijing may also restrict exports of rare earth metals (which are excluded from US tariffs but not from Chinese restrictions). This would hit US electronics and defense industries. I estimate the probability of this scenario at 60-70%.
- The main risk to my forecast: the Section 122 appeal will be heard by the US Court of Appeals for the Federal Circuit before the end of July. If the court upholds the invalidity of Section 122 tariffs, the Trump administration will lose its bargaining chip and be forced to rely solely on Section 301. This could delay the imposition of new tariffs until fall, creating a 'dead season' of uncertainty for business.
Editorial Forecast
Asset: Shares of European automakers (Volkswagen VOW3.DE, BMW, Mercedes-Benz)
Direction: Decline in the next 48-72 hours, then uncertainty
Key Levels: VOW3.DE — current price €98.50. Nearest support — €94.00 (May low). On a break of €94.00, next target — €88.00 (March low).
Confidence Level: Medium (60%) — the news is already partially priced in after the June 2 announcement, but EU retaliatory measures (expected next week) will be a new negative driver.
Main Risk to Forecast: If Trump and European Commission President Ursula von der Leyen hold emergency talks on the sidelines of the G7 summit (scheduled for June 15-17) and agree to ease tariffs on the EU in exchange for concessions on other issues (e.g., Chinese EVs), automaker stocks could rebound 5-7% in a single day. Watch for news from Italy (G7 venue) starting June 15.
The editorial opinion does not constitute investment advice. All decisions are made at your own risk.
— Editorial Team
