Key facts
- US will uphold tariff caps in trade deals with the EU and Japan.
- Most EU or Japanese imports are capped at a maximum of 15%.
The U.S. will maintain tariff caps in trade deals with the EU and Japan, with most imports capped at 15%. New tariffs targeting forced labor concerns could reach 10% for the EU and 12.5% for Japan, potentially exceeding the cap through Section 301 investigations.
The U.S. stance on upholding tariff caps while simultaneously introducing new tariffs for forced labor concerns creates a complex trade dynamic, potentially impacting global supply chains and the economic relationship between the U.S., EU, and Japan.
U.S. Trade Representative Jamieson Greer affirmed that the United States will uphold the tariff caps within trade agreements established with the European Union and Japan. Speaking at an OECD ministerial meeting in Paris, Greer stated that 'a deal is a deal' and that the existing agreements limit U.S. tariffs on most EU or Japanese imports to a maximum of 15%. However, Greer's office recently announced new tariffs targeting various economies, including the EU and Japan, due to their alleged failure to curb trade in goods produced with forced labor. Under these new measures, the EU could face a 10% tariff, and Japan 12.5%. Greer indicated that Section 301 investigations could potentially lead to overall tariffs exceeding the 15% cap for these economies. He also referenced the trade agreement acknowledging the U.S.'s right to impose tariffs 'up to a certain level,' with President Trump possessing the authority to enact them through Section 301 investigations. The U.S. launched the Section 301 investigations to rebuild Trump's emergency tariffs, which were struck down by a U.S. Supreme Court decision in February. Greer said findings from the second investigation should come within a matter of weeks. Separately, U.S. Trade Representative Katherine Tai stated that the U.S. will adhere to tariff caps in agreements with the EU, Japan, and other nations, aiming to ensure fair trade practices and protect domestic industries. EU Trade Commissioner Maros Sefcovic, who spoke with Greer, agreed that 'the deal is the deal,' emphasizing the 15% tariff limit for the EU. Sefcovic noted surprise at the EU being targeted for forced labor tariffs given its high labor standards but expected parliamentary approval of the deal. The EU plans to ban products involving forced labor by December 2027.