The new US forced-labour tariffs are live, and Europe is paying 10%
The United States has started charging an extra 10% on everything the European Union sells it. What the Section 301 tariffs are, who got hit and what it means for exporters in Portugal.
Since Friday, everything the European Union sells to the United States carries an extra 10% at the border. This is not a threat or a proposal: it took effect on 24 July and American customs is already collecting it.
The measure comes out of a Section 301 investigation, the tool Washington uses to punish what it considers unfair trade practices. This time the charge is forced labour: the US trade representative concluded that 60 economies, the EU, China and Mexico among them, either never banned imports of goods made with forced labour or banned them and do not enforce the ban. Those 60 economies account for 99.4% of everything America imports, so it is quicker to list who escaped than who got caught.
How much is the EU paying?
Ten per cent, the lower of the two bands. The tariff comes in two tiers: 10% for economies that already have forced-labour legislation but, in Washington’s reading, enforce it weakly, and 12.5% for everyone else. Europe has its regulation on the books and still bedding in, which put it on the gentler side of the table. The technical detail of the final action is published on the US trade representative’s site.
Will Brussels retaliate?
Not for now. The European Commission called the accusation unjustified when it first landed in June and has not changed its mind, but it read the final decision as consistent with the trade deal struck with Washington in Scotland last year, and pointed out that it had already delivered its own side by cutting tariffs from 1 July. Translation: Brussels would rather keep negotiating exemptions than start a fight over ten percentage points.
What changes for exporters in Portugal?
The maths. The United States is one of the biggest non-EU markets for Portuguese textiles, footwear, cork, wine and moulds, and a 10% tariff either eats the margin, gets passed to the American buyer, or costs orders outright. None of those is painless in a summer when the country is celebrating record foreign investment and leaning on exports to hold up growth.
The consolation is that nobody here was singled out: the rate is the same across the whole European Union and it is the minimum band. The problem is that the bill still arrives, and it arrives now.
Image: Vitor Oliveira from Torres Vedras, PORTUGAL / Wikimedia Commons (CC BY-SA 2.0)
