The Trump administration announced tariffs of 10 to 12.5 percent on 60 trading partners, including the United Kingdom, European Union, Canada, Taiwan, and Australia, citing their failure to adequately address forced labor in global supply chains. The move represents a shift in strategy following the Supreme Court's February ruling that struck down many of the administration's previous tariffs as legally unfounded.
The administration framed the new tariffs as a response to forced labor concerns rather than broad protectionist measures. By anchoring the tariffs to labor violations, officials appear to be adopting a rationale they believe will survive legal scrutiny. The strategy comes after the court determined that the president lacked the legal authority to impose earlier duties under a 1977 emergency statute.
The European Union immediately objected to the proposal, asserting that the tariffs violate a trade agreement reached between Washington and Brussels in July. EU officials argued that the levies breach the spirit of that existing accord.
Critics contend that the forced labor rationale serves primarily as legal cover for protectionist policies rather than genuine human rights enforcement. They argue the administration is using labor concerns to circumvent court-imposed restrictions on tariffs that previously lacked solid legal foundation.
Meanwhile, the administration continues managing the fallout from the Supreme Court's February decision. The Trump administration has begun accepting refund claims for more than $166 billion in tariffs that the court ruled were imposed without legal authority. The administration launched a digital system called Cape in June to process these claims, which officials said can handle approximately 63 percent of affected import filings initially, with the remainder to follow later.
The refund process has faced complications. Customs officials acknowledged in court filings that they had to build an entirely new processing infrastructure from scratch, including developing mechanisms to deposit money directly into importers' accounts. Companies can expect to wait 60 to 90 days from submission to receive their refunds.
However, the system contains significant limitations. It initially processes refunds only for entries that are either unliquidated or liquidated within the past 80 days. Businesses whose goods are tied up in legal disputes, anti-dumping investigations, or other unresolved customs processes cannot yet claim refunds.
More than 3,000 companies have sued the administration to secure their refunds, including high-profile retailers and manufacturers such as Costco, FedEx, Toyota, and Nintendo of America. Only companies that officially paid the tariffs are legally eligible to claim refunds. Broader consumers who absorbed costs through higher prices on goods ranging from electronics to clothing have no direct recourse.
FedEx has indicated it will pass refunds back to customers who originally paid the tariffs, while Costco suggested it might lower prices if it receives reimbursement.