President Donald Trump launched a new round of tariffs targeting 60 trading partners on Friday, marking a return to aggressive trade policy as the administration simultaneously navigates a military conflict with Iran now in its sixth month.
The tariffs, which took effect at 12:01 a.m. Eastern Time Friday, range from 10% to 12.5% and replace the temporary 10% baseline tariff that expired July 24. Among the nations affected are the European Union, China, the United Kingdom, and Canada.
While initial market reaction proved muted—a stark contrast to the steep declines that followed the April 2025 “Liberation Day” tariff announcement—investors and analysts say the latest measures pose different risks than previous rounds.
Legal Foundation Shifts
The White House turned to Section 301 of the Trade Act of 1974 to implement the new tariffs, citing alleged forced labor practices in targeted countries. This represents a significant shift in legal strategy following a Supreme Court ruling in February that declared the previous tariff regime illegal.
According to the administration’s framework, countries that have adopted or committed to introducing forced labor prohibitions will face a 10% duty, while those that haven’t will be subject to a 12.5% charge. The levies affect 99.4% of American imports.
“The move to Section 301 removes the legal vulnerability that allowed the Supreme Court to strike down the previous round of import taxes,” said Matthew Ryan, head of market strategy at Ebury. “With that legal escape hatch now closed, markets may need to start pricing tariffs as a structural drag on global growth rather than a transient risk to be negotiated away.”
Timing Raises Concerns
The tariffs arrive as global markets contend with multiple pressures, including ongoing hostilities in the Middle East that have pushed oil prices back above $100 per barrel this week as hopes for a negotiated ceasefire diminish.
“The significance this time around is twofold,” said Emma Moriarty, portfolio manager at CG Asset Management. “Not only does it show the Trump administration’s commitment to tariffs, but it shows this commitment against a backdrop of a global energy shock and increasing supply chain bottlenecks.”
Moriarty added that the administration appears willing to continue levying tariffs even when they exacerbate domestic market conditions. “For markets, the implications should be clear: we have to position for a low growth and high inflation outcome,” she said.
Russ Mould, investment director at AJ Bell, noted that while the tariffs were anticipated, they represent “another unwelcome source of uncertainty as sentiment is buffeted by the renewed conflict between the U.S. and Iran and concerns about levels of expenditure in the tech sector.”
Permanent Policy Shift
Unlike earlier tariff rounds characterized as negotiating tactics, these latest measures may signal a longer-term policy direction. Martin Jacob, professor of accounting and control at IESE Business School in Barcelona, said the reintroduction of tariffs hints at the White House’s ambition to preserve import levies as a “lasting feature” of U.S. economic policy.
As the previous temporary measures approached their expiration, the administration faced pressure to establish more permanent tariff regimes. “The latest measures therefore represent more than another short-term negotiating salvo,” Jacob explained.
Alan Siow, co-head of emerging markets corporate debt at Ninety One Asset Management, suggested the White House may be encouraged by limited retaliation from trading partners and the absence of a clear inflation spike following earlier tariff implementations. He expects other countries to respond in a measured way initially, reserving escalation until the policy’s impact becomes clearer.
Fed Decision in Focus
According to CNBC, attention now turns to next week’s Federal Open Market Committee announcement. The recent jump in oil prices has raised the possibility that the Federal Reserve could hike interest rates later this year, representing a shift from earlier expectations that it would hold steady through year-end before cutting in 2027.
Ryan expects policymakers to keep the option of a rate hike open as they assess the combined impact of tariffs and energy price pressures on inflation.
Source: www.cnbc.com — https://www.cnbc.com/2026/07/27/donald-trump-tariffs-trade-war-iran.html
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