Trump Imposes 10-12.5% Tariffs on 60 Nations; India in 10% Slab
UPSC / SSC current affairs note · Economy
Why in news
The US has announced fresh Section 301 tariffs on 60 economies, effective from Friday, citing forced labour concerns. India has been placed in the lower 10% tariff bracket after negotiations, while other nations face up to 12.5% duties. This move escalates Trump's trade agenda following a Supreme Court setback on earlier tariffs.
Background
Section 301 of the US Trade Act of 1974 allows the US Trade Representative to impose tariffs on countries engaging in unfair trade practices. The US Supreme Court recently ruled many tariffs imposed under emergency powers unlawful, prompting the administration to use Section 301 as an alternative legal route.
Key facts
US President Donald Trump announced fresh import tariffs targeting 60 economies, citing inadequate action to block goods made with forced labour.
Tariffs range from 10% to 12.5% and take effect from Friday.
India is among 17 nations facing the lower 10% tariff, including the UK, Canada, Indonesia, Mexico, and Bangladesh.
India was initially considered for a 12.5% tariff but secured the reduced rate after productive discussions with the US on labour practices.
The higher 12.5% tariff applies to the European Union, Taiwan, Japan, Korea, Switzerland, and other investigated economies.
The tariffs are imposed under Section 301 of the Trade Act of 1974.
The move follows a US Supreme Court ruling that many tariffs imposed under emergency powers were unlawful.
The USTR launched investigations of 60 economies under Section 301(b) in March 2026.
The 10% rate applies to economies that impose a forced labour import prohibition, commit to enforce such a prohibition, or have a partial regime preventing forced labour goods.
The tariffs are net of Most-Favored-Nation (MFN) rates.
Prelims pointers
- Section 301 of the Trade Act of 1974
- Office of the US Trade Representative (USTR)
- Most-Favored-Nation (MFN) rate
- Countries in 10% slab: India, UK, Canada, Indonesia, Mexico, Bangladesh, Argentina, Cambodia, Ecuador, El Salvador, Guatemala, Honduras, Jordan, Malaysia, Pakistan, Sri Lanka, Trinidad and Tobago
- Countries in 12.5% slab: EU, Taiwan, Japan, Korea, Switzerland
Mains angles
- Impact of US tariffs on India's exports and trade relations
- WTO compatibility of Section 301 tariffs and dispute settlement
- Forced labour allegations and their effect on global supply chains
- India's labour law reforms and international scrutiny
- US trade policy under Trump and its implications for multilateralism