The Journal. - Tariffs Are Back. What’s Changed?

Episode Date: July 27, 2026

Tickets for our live show in New York are on sale now! Get yours here. The Trump administration is imposing tariffs ranging from 10% to 12.5% on its major trading partners as part of a new set of duties that the White House says are designed to combat forced labor. The White House has also proposed new tariffs for fining U.S. tech companies. WSJ’s Gavin Bade walks us through the new levies and explores the architect behind them and how he built them to last. Jessica Mendoza hosts. Further Listening: - How Do You Refund $166 Billion? - Trump's Tariffs Are Illegal. He's Got a Plan B. - Trump's Tariff Whiplash. Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Live from New York, it's the journal. That's right, Jess and I are back with another live show in New York City. This time on Wednesday, September 9th. We're going to be at City Winery for an evening of sharp reporting, insider conversation, and special guests. And probably wine? I hope so. Either way, you won't want to miss it. Tickets are on sale now.

Check out the link in our show notes. See you there. Last February, President Trump's trade agenda took a big hit. The Supreme Court struck down most of President Trump's global tariffs today in a six to three decision. The case revolves around the president's use of the International Emergency Economic Powers Act of 19- The court ruled that they were going to strike down large portions of the administration's global tariff plan, finding that the president exceeded his authority. That could have been the end of Trump's tariff ambitions.

But it turns out... It was only a bump in the road, really. After five months of relative calm, the tariff agenda is back. Our colleague Gavin Bade covers trade in economics. President Trump last week unveiled tariffs on virtually all U.S. trading partners. These came into effect to replace the tariffs that the Supreme Court had thrown out in February. These new tariffs are pretty sweeping. They target products coming from more than 80 countries.

Countries that the Trump administration says don't have strong enough enforcement against forced labor. It just so happens that he thinks almost every trading ally, every trading partner that we have is not really, you know, enforcing prohibitions on forced labor on their books. Now, this really comes as news to the UK or Australia or the entire European Union, all of whom say, we don't allow goods with forced labor. We're not pro-slavery. But what the Trump administration has said is that, well, they're not doing enough to enforce the laws on their books. What are these new tariffs signal about Trump's trade agenda? I think that they signal that Trump's trade agenda is kind of growing up a little bit

and becoming a bit more mature. Now you see them kind of using a section of law that is much more tried and tested and is much more likely to withstand legal scrutiny. Welcome to The Journal. our show about money, business, and power. I'm Jessica Mendoza. It's Monday, July 27th. Coming up on the show, Trump's tariffs make a comeback.

This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales, using automation, analytics, and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify. This episode is presented by SAP. Your company's ambitions can't be held back by long implementation, surprise costs, or empty AI promises. SAP Grow AI Cloud ERP gets you live fast,

keeps pricing predictable and delivers built-in AI that gets results the first day. Not some someday, all on a single platform that's easy to manage industry-ready and designed to scale with your business. Bring it with SAP Grow. AICloud ERP for any size business. SAP.com slash grow. Though the Supreme Court rejected the old tariffs, Trump was not deterred. Their decisions incorrect, but it doesn't matter because we have very powerful alternatives that have been approved by this decision. As soon as the Supreme Court ruling happened, you saw senior administration officials, whether Treasury

secretary Scott Bessent or U.S. Trade Representative Jameson Greer. They came out and said, no worries, we're just going to find a different tariff authority to rebuild this tariff wall that Trump had put up. The Trump administration quickly replaced the illegal AEPA tariffs with a new set of temporary tariffs. Those temporary duties, 10% across the board, could stay in place for 150 days. In the meantime, officials with the U.S. trade representative, the U.S.T.R, and the Commerce Department, got to work. Their goal was to find more permanent ways to reinstate the president's tariff regime. If you think back to the first round of tariffs, they were based on this law, the International Emergency Economic Powers Act. The Aiepa statute, it had never been used for tariffs before.

And it really was kind of a long shot that the courts would uphold that tariff authority in any case, right? And so what they did was they dusted off a different part of trade law that is much more tried and tested. This is called Section 301 of the Trade Act of 1974. What it allows the president to do is impose tariffs on another country if the president finds that they are discriminating against U.S. commerce or U.S. firms. And what you have to do under this section is before you impose a tariff, you have to do a really lengthy investigation process. You prepare these reports. You do a bunch of economic analysis. You allow industry and labor union's time to comment. Gavin says these investigations into unfair or discriminatory trading practices typically take years.

But with the temporary tariffs set to expire last week, the Trump administration had to move quickly. And they got it done just in the nick of time on Friday, put out the new tariffs so there wasn't a gap in the tariff authorities there. So they crushed this one down into just a few months. and we're able to kind of get it right in under the line there. And what exactly did the Trump administration look into for this investigation? What are they alleging? So I think it's quite clever, really, what U.S. Trade Representative Jameson Greer has done. Instead of, you know, really pushing the envelope like they did with AEPA tariffs,

he's identified a certain issue. This is forced labor in international supply chains. The United States has had on the books this law where we prohibit the import of goods made whole or in part with forced labor. And we enforce it rigorously. Other countries, most don't have it. Those that do, don't enforce it. It sounds like under Section 301, it could have been any issue that

discriminated against the U.S., right? Like, was there a reason that this was the issue that they landed on? Well, he says that is because it's really an important issue for him and the president. And you know what? I don't doubt that Ambassador Greer really does care about forced labor. He's talked about this before. or this is something that, you know, he has worked on. There are, you know, elements of the USMCA agreement that he helped negotiate in the first term

that, you know, have to do with forced labor and supporting labor rights. The courts give a lot of deference to a policymaking agency like USCR when they are determining what discrimination is, right? They're not going to want to opine on what actually is discrimination and what isn't. They're just going to see, did you follow the process? Did you consult with Congress? Did you consult with stakeholders? Did you write a report?

did you take comments into account? And it appears that they have done all of that. They've checked all those boxes. They've checked all those boxes. Under this new tariff regime, there are two rates, 10% and 12.5%. The 10% tariffs apply to more than a dozen trading partners that the U.S. says are already working to reduce forced labor and supply chains. These include Canada, Mexico, and the European Union.

The 12.5% tariffs target more than 40 nations. including China, Japan, and South Korea. The Trump administration says these countries lack sufficient legal prohibitions against products made with forced labor. Those countries can have their tariff rate brought down to 10% if they prove their fighting forced labor through some kind of policy or legislation.

Is there a way for a country to get, like, to zero tariffs under this? That's a very good question, and that's something that reporters sought to ask senior administration, officials last week when this was announced. And you know what? They were pretty cagey on this. They did not say that there was any way for a country to get to zero, right? A lot of people I've spoken to, whether trade lawyers in Washington or certainly foreign

dignitaries and officials, view this forced labor justification really as a fig leaf for the true motivation here, which is to rebuild President Trump's tariff wall. What do you expect the impact of these new tariffs will be on the U.S. economy and on economies around the world? Yeah, I think that the effect is going to be pretty muted in the short term, right? Remember, there was a 10% across the board tariff in place. Already. And then it got replaced by a tariff of 10 to 12.5%.

So basically the same thing, right? That's a negligible difference. So really, this action this week was about achieving continuity in the trade agenda. And then there are more tariff investigations that are still out there that could stack on top of that in the months to come. So this is by no means a settled issue. This is not the end of the story. The Trump administration says more tariffs are coming. Trade officials are conducting more investigations under Section 301.

One of them is looking at whether countries are flooding global markets with exports, which would mainly target China. The U.S. is also considering an investigation into the European Union for fining American tech companies. But Section 301 isn't the only trade provision that the administration is using for new tariffs. Yes, the new piece on the chessboard. This is fascinating and has had the trade bar in D.C. a flutter all last week. May we all be as excited as you talking about trade law? Gabbyte. This is called Section 338, and it's actually from the Tariff Act of 1930. It's almost 100 years old. And it's actually a little more flexible than Section 301. You have to kind of initiate an investigation, but you don't have to go through all. of the same steps that you do with 301. It's kind of like you just make the petition and then 30 days later you can impose the tariffs.

The thing is, this has never been done before. We have never imposed tariffs under Section 338 in the almost 100 years that it's been on the books. So the main difference, I'm sure there are other more like detailed differences, but the main difference, big picture between Section 338 and 301 of these two different trade laws is that section 301 has been used as a justifiable. for tariffs before many times, where Section 338 has not. Precisely. The Trump administration is using Section 338 as the basis for new tariffs against Canada.

Tariffs that target $20 billion worth of Canadian goods such as wine, hockey sticks, and cement. Still, that's just a fraction of the $380 billion worth of goods that Canada exports to the U.S. every year. So this is kind of them tiptoeing into the... into this new legal jurisdiction and saying, okay, maybe let's test the waters here with a small tariff action, and if we can get that upheld by the courts, then maybe that opens up a new landscape for us.

Because although you have to have that 30-day waiting period, it would be more nimble for them to be able to say, you know, dial up and dial down tariffs when they want. The Trump administration says the move is a response to Canada's, quote, discriminatory treatment of American products. Canadian Prime Minister Mark Carney said the new tariffs represented, quote,

the latest in a series of unilateral U.S. trade actions to violate the U.S.MCA, and that Canada had made several detailed proposals to resolve bilateral trade issues, according to a statement released by his office. According to Gavin's reporting, if all of this recent tariff action holds up, it could amount to about the same tariff burden the U.S. was imposing before the Supreme Court decision, an average of about 17%. Gavin says this reconstruction of Trump's tariff agenda under a new and arguably stronger set of legal justifications

can be attributed to one man, U.S. trade representative Jameson Greer. This is the Jameson Greer show when it comes to these tariffs. I have great interactions with my counterparts. I talk to them. For us, this is business, this is trade, this is economics. We're looking at bottom-long. So how did Greer gain so much influence over Trump's trade agenda?

That's after the break. Even before Trump returned to office, Jameson Greer had been all in on the tariff cause. I remember when I really realized that like, oh, Jameson Greer might be U.S. trade representative. This was a few years ago at one of these industry events in Washington. And he was speaking, I think, to an industry audience, right? I'm in the crowd. And he was telling them, you know, we have the legal authority to do whatever we want to do on tariffs.

What we've lacked to this point was the political will to implement it. And if we get back in the office, he said, we're going to have the political will. I can promise you that. And I was just like, oh, he's serious about this. This man is a true believer in what he's doing. And who is Jameson Greer? Can you tell me a little bit about him? He is a longtime trade lawyer in Washington and a veteran of Trump's first term.

He was actually the USTR chief of staff. to Ambassador Bob Lighthizer, who was the trade representative under Trump won. So he knows the agency. He's very well liked at his agency. And is known around D.C., Republicans and Democrats all consider him, you know, a really hard-nosed, smart, tenacious lawyer. But he was kind of pushed to the sideline early in Trump's second term. When Trump kicked off his second term, he made an unusual move. Typically, tariff policy would be handled by the trade representative, in this case Greer.

But instead, Trump assigned this major part of his agenda to Commerce Secretary Howard Lutnik. And as the first round of tariffs rolled out last year, it was Lutnik, not Greer, who was the face of that effort. That didn't go so well for about a year, right? We saw the Aepa tariffs. They had to put those tariffs on, then they had to take them off.

And there was just, there was a lot of bedlam going on in the trade agenda, right? Lutnik, he made a number of missteps. He would get out in front of the president and say things that the president wasn't ready to, announce. It's kind of a bull in the China shop kind of guy, right? And flash forward to February, the Aipa tariffs get thrown out by the Supreme Court. And this is really when it looks like Jameson Greer took the reins of the trade agenda. You see Ambassador Greer out on TV multiple times a week. He's running the Section 301 tariffs. He's running the talks with Mexico and Canada for USMCA.

We want to make sure that we're targeting these, you know, these unfair trading practices that have led to frankly, offshoring in the U.S. and an inability to build new factories at times. He's administering the U.S. China Board of Trade. He's doing stuff on critical minerals. I mean, he's got his hands in everything now. And I think that that's a big reason that you've seen the trade agenda kind of straighten up a little bit

and mature a little bit into something more legally durable because he's just a more careful personality, many people would say, than, you know, the kind of move fast and break things attitude that Lutnik has brought to many of these things. Trump administration officials said Lutnik has taken a leading role on major trade and investment deals, including Pacts with Japan, South Korea, and the European Union signed last year.

A White House spokesman told the Wall Street Journal, the Commerce Department and the U.S. Trade Representative oversee different tariff authorities and that Lutnik and Greer play different roles in trade discussions. Greer, in a statement, said he and Lutnik, quote, worked together very closely and constructively, to execute the president's trade agenda. A Commerce Department spokesperson said Lutnik, quote, works incredibly well with Ambassador Greer and the entire trade team. And it's not just the power dynamics that have shifted.

Tariffs are back, but the context is different. There's a war in Iran. Oil prices are on the rise. You've got tech stock stumbling. There's growing fear of an AI bubble. What could this new context mean for this new tariff strategy, these new tariffs? I think you do see them being a little bit more careful with how broadly they apply these tariffs. For instance, you know, when President Trump first put his AEPA tariffs on in the first year of the second term, there were hardly any exemptions whatsoever, right?

And actually, Secretary Lutnik made a habit of saying no exemptions, no exceptions. They did not do that this time around. As tariffs have rippled their way through the economy, the Trump administration has made some adjustments. They have quietly carved little holes in their tariff agenda for where, you know, customers are really, really price sensitive. All of this, you know, food stuffs, for instance, used to be subject to tariffs. Most of food and agricultural goods have been carved out of the global tariffs now, right? And so I think you see them being quietly sensitive to the price impacts of these tariffs. So it sounds like the Trump administration really wants to make tariffs work.

Like they're adjusting the strategy as they go. but they really believe it's a good strategy. They still think that directionally, tariffs are the right way to go and that they're actually going to help the economy. I think a lot of them think that we're right around the corner from a big industrial renaissance here where the tariffs and the investment deals and the tax law all come together to get people building more factories

and bring all this industry back to the U.S. So if you take a step back, what is the difference between the old tariff regime and this new one? What does the administration learn? I think they've learned that they need to be a little more careful. They can't really fly by the seat of their pants with these tariff announcements and their use of U.S. trade law, right? They're really kind of going more methodically being more by the book because they've been forced to be. There's no change in the policy strategy.

They still want to have a robust set of tariffs that they think will rebuild the domestic manufacturing sector. And also, this allows them to assert themselves as dominant in many of these economic. discussions, right? And they've been much more forceful in pushing U.S. demands in these trade talks and really holding the U.S. market as their leverage in those deals. But they are finding that they have to be a little bit more careful in how they implement these things, especially if they want them to stand the test of time. And that, I think, is why you see Ambassador Greer in the driver's here.

That's all for today, Monday, July 27th. The Journal is a co-production of Spotify and the Wall Street Journal. Additional reporting in today's episode by Matt Grossman. Thanks for listening. See you tomorrow.