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United States Imposes New Tariffs on 60 Countries Including Pakistan
Just after midnight on Friday, the temporary shield that had covered nearly every American import came down, and a new one went up in its place. The Trump administration confirmed that tariffs of between 10 and 12.5 percent will now apply to goods arriving from 60 trading partners, a group that together accounts for close to ninety nine percent of everything the United States buys from abroad.
Pakistan sits inside that list, placed in the lower duty bracket alongside Canada, Mexico, the European Union, Bangladesh, India, Britain and more than a dozen other economies. The justification offered by the Office of the United States Trade Representative is not the familiar language of deficits or currency manipulation. It is forced labour, and the argument is that Washington's trading partners have simply not done enough to keep goods produced through coerced or exploited work off American shelves.
It is worth pausing on how the United States arrived here, because the path is almost as consequential as the destination. Earlier this year the Supreme Court struck down the sweeping emergency tariffs President Trump had imposed on nearly every country on Earth, ruling that the 1977 International Emergency Economic Powers Act never gave a president the authority to tax imports this broadly.
The defeat forced the government to refund tens of billions of dollars to importers who had already paid up, and for a stretch in June the United States was returning more tariff revenue than it collected. Rather than retreat, the administration reached for a narrower but sturdier tool, a temporary ten percent global tariff under Section 122 of the Trade Act, a provision that by law can only run for one hundred and fifty days.
That clock expired this week, and in its place the administration has now activated Section 301, the same statute once used to justify tariffs on Chinese technology transfer practices, this time built on a forced labour investigation that USTR chief Jamieson Greer opened back in March.
What changes for whom
Seventeen economies, including Pakistan, Canada, Britain, India, Bangladesh, Mexico and the European Union, face the lower ten percent additional duty. The remaining forty five, among them China, Japan, South Korea, Vietnam and Nigeria, face 12.5 percent. Goods that comply with the United States Mexico Canada Agreement remain exempt, and a separate textile mechanism is meant to allow a limited volume of apparel imports in at a reduced rate, though Washington has not disclosed the size of that allowance.For Pakistan the classification into the lower bracket is a modest relief rather than a reprieve. The country's export economy leans heavily on textiles and apparel, a sector that had already been absorbing a difficult year of flood damaged cotton crops, rising energy costs and changes to the tax treatment of imported raw material under the Export Facilitation Scheme.
Islamabad's own defence, delivered in person by its ambassador at USTR hearings earlier this year, argued that the finding was disproportionate given that Pakistan already enforces a formal prohibition on forced labour imports and that no credible evidence tied Pakistani export goods to coerced labour. That argument appears to have carried some weight, since Pakistan avoided the steeper 12.5 percent tier applied to countries USTR judged to have made essentially no progress at all.
Even so, exporters warn that any additional duty layered onto an already crowded cost structure narrows the margin Pakistani manufacturers need to compete with Vietnam and Bangladesh for the same American retail contracts, a dynamic explored in our recent coverage of Pakistan's domestic energy pressures.
Why Washington Is Calling This a Forced Labour Measure
Greer has been consistent in framing the policy as a matter of fairness rather than protectionism. His argument, repeated across statements since June, is that the United States has enforced its own forced labour import ban for nearly a century, and that companies which follow the rules are placed at a disadvantage when competitors elsewhere are not held to the same standard. Whether that framing survives scrutiny is another matter.
Critics point out that the timing, arriving within hours of the previous tariff authority expiring, looks less like the culmination of a careful labour rights investigation and more like a legal workaround engineered to keep the broader tariff wall standing after the courts dismantled its predecessor.
The official USTR findings list six economies, Canada, Ecuador, the European Union, Indonesia, Mexico and Pakistan among them, as having failed to both impose and effectively enforce a prohibition, a formulation broad enough to sweep in close allies alongside geopolitical rivals under a single administrative net.
— Jamieson Greer, United States Trade Representative
International Response Ranges From Anger to Resignation
Reaction abroad has split largely along the lines of how much leverage each capital believes it holds. China rejected the premise outright, with foreign ministry spokesperson Mao Ning insisting there is no forced labour in Chinese supply chains and describing the entire exercise as political manipulation dressed up as trade policy, a rebuttal in line with Beijing's broader posture examined in our analysis of the shifting balance of global geopolitics this year.
European officials were sharply critical without fully closing the door on further negotiation. A senior member of the European Parliament's trade committee called the underlying findings absurd, while France urged restraint and said it still intends to honour last year's separate trade agreement with Washington despite the fresh friction. Britain took the calmer route, noting it remains in regular talks with the United States and that its existing preferential market access has not been disturbed.
Taiwan expressed cautious optimism that the final terms would track earlier understandings, and India, which now finds itself grouped with the ten percent bracket despite USTR's original June proposal placing it among the harsher cases, said it continues to engage with American counterparts even as the new duty complicates trade talks already underway.
Industry groups tracking the exemption list have noted it runs for dozens of pages, a sign that Washington is wary of the political cost of raising prices on everyday goods even as it presses ahead with the wider policy.
Markets and multinational supply chains are left to absorb a familiar kind of uncertainty, not because the direction of policy is unclear but because the legal foundation underneath it has already been tested and overturned once this year.
Section 301 investigations typically survive court challenges more easily than the emergency powers claim that collapsed in February, since the statute was written by Congress specifically to authorise this kind of response to unfair trade practices. That legal durability is precisely why the administration reached for it, and why economists expect this version of the tariff regime, unlike its predecessor, to remain in place for the foreseeable future, feeding into broader questions about oil markets, inflation and regional trade flows that we examined in our recent piece on how geopolitical shocks are already pushing up global energy and trade costs.
What Comes Next for Pakistan and Its Trading Partners
For now, the practical question facing exporters from Karachi to Faisalabad is less about the headline ten percent figure and more about the fine print still to come, particularly the undisclosed textile mechanism that could soften the blow for apparel makers if Islamabad can secure a meaningful volume allowance.
Pakistani trade officials are expected to keep pressing that case in Washington in the weeks ahead, arguing that a country which has already legislated against forced labour imports should not be taxed at the same starting rate as economies with no such framework at all.
Whether that argument yields further relief will say a great deal about how much room smaller trading partners actually have to negotiate once a tariff has moved from proposal to binding policy, a test case that will likely shape how Washington's remaining trade disputes, from the unresolved questions over China's rate to the European Union's parallel commitments, ultimately play out.
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