DailyEconomic – The Office of the U.S. Trade Representative issued a notice on July 23 local time, announcing additional tariffs ranging from 10% to 12.5% on 60 economies under Section 301 of the Trade Act of 1974, citing the so-called “combating forced labor.” The new tariffs took effect at 12:01 a.m. Eastern Time on July 24. This marks the largest move by the Trump administration to rebuild tariff barriers since the Supreme Court struck down its broad-based tariff policy.

Tariffs in Two Tiers, Latin American Countries Grouped Accordingly

According to information released by the U.S. Trade Representative’s Office, the new tariffs are divided into two tiers: 10% and 12.5%. In the Latin American region, the 18 affected countries and territories are divided into two groups for tariff application.

Latin American countries subject to the 10% additional tariff include: Mexico, Guatemala, Honduras, El Salvador, Argentina, Ecuador, and Trinidad and Tobago. Notably, the Mexican government has stated that under the U.S.-Mexico-Canada Agreement (T-MEC), 85% of its exports are eligible for exemptions, meaning the new tariffs will actually apply only to the remaining 15% of its exports.

Latin American countries subject to the 12.5% additional tariff include: Costa Rica, Panama, the Dominican Republic, Colombia, Venezuela, Uruguay, Chile, Brazil, Peru, Nicaragua, and Guyana.

In addition, the United States is imposing a uniform 10% tariff on the 27 economies of the European Union.

Citing “Forced Labor” and Invoking Section 301

The tariff measure stems from an investigation launched by the U.S. Trade Representative’s Office in March of this year. The U.S. side claims that the policies and measures of the relevant countries regarding bans on imports of products made with “forced labor” have “harmed the interests of American workers and businesses.” Following the investigation and consultations with the countries concerned, the U.S. determined that these countries’ practices constituted “unfair trade practices.”

The new tariffs are intended to replace the 10% provisional global tariffs previously imposed by Trump. In February of this year, after the U.S. Supreme Court ruled that the Trump administration’s broad-based global tariff policy was unlawful, the Trump administration imposed provisional tariffs under Section 301 as a transitional measure.

Latin American Economies Under Pressure, Calls for Trade Diversification Renewed

Analysts point out that this tariff measure will impact exports from multiple Latin American countries. Major Latin American economies such as Brazil and Mexico are highly dependent on exports to the U.S., and the new tariffs may further compress their export competitiveness. Previous reports have shown that due to factors including changes in U.S. tariff policies, foreign direct investment inflows to Latin America and the Caribbean grew by only 1.7% year-on-year in 2025, while newly announced investment in tariff-sensitive sectors such as the automotive industry fell by 61% year-on-year.

Since the beginning of this year, several Latin American countries have expressed dissatisfaction with U.S. tariff policies. Brazil’s foreign minister had previously criticized the U.S. tariff hikes as having “no justifiable grounds.” Latin American economies are also accelerating the implementation of trade diversification strategies to reduce their over-reliance on the U.S. market.

China is not on the current tariff list, as its exports to the U.S. are already subject to higher specific tariffs.