Trump readies new tariffs on 60 countries as temporary duties expire, risking inflation ahead of midterms

Expiring duties and legal maneuvering

The temporary 10% tariffs imposed under Section 122 of the Trade Act of 1974 are set to expire at midnight on Friday, 22 July 2026. The administration had used that provision to maintain universal duties on all goods entering the United States after the Supreme Court in February blocked the sweeping tariffs Trump announced on 2 April 2025, his self-styled "liberation day." Rather than let the duties lapse, the White House is preparing a new package targeting at least 60 countries. Trade Representative Jamieson Greer confirmed to CNBC that an announcement is expected soon, though he must first consult Congress. Hopes that Congress would vote to extend Section 122 are very low, according to the Financial Times.

We expect to make an announcement soon.

Administration lawyers have spent months combing through thousands of pages of trade law to find an alternative legal basis. One leading option is Section 301 of the same Trade Act, which allows the US to block imports from countries that use forced labor. Greer said that provision could cover about 99% of US trade. The new tariffs would initially range from 10% to 12.5%, but the administration has signaled longer-term escalations. Trump has promised via social media that tariffs on imported generic drugs will rise progressively to 200% by 2029.

Domestic political pressure

The tariff push comes just over 100 days before the November midterm elections, with President Trump's approval ratings at record lows and the Iran war dragging on. Several Republicans, including Senate Majority Leader John Thune, are urging restraint. The concern in Washington is that new trade barriers will fuel inflation and raise the cost of living for American families already strained by energy market turmoil from the Iran conflict. War Secretary Pete Hegseth disclosed that the war has already cost $37.5 billion. Despite the pushback, Trump remains convinced that tariffs are the best tool to protect national interests, reportedly calling them his "favorite word."

Tariffs are my favorite word.

Canada targeted with steep duties

Canada is the first country to feel the new approach. Using a provision designed to punish nations that discriminate against US goods, Washington announced tariffs of up to 50% on Canadian wine, cement, and hockey sticks. The move was accompanied by sharp criticism of Canadian wildfire haze drifting into American cities, a bizarre polemical jab reflecting the deteriorating tone of the trade relationship.

European Union watches cautiously

Across the Atlantic, the European Union is monitoring the situation with caution. Brussels recalls the Turnberry agreement, signed in Scotland and recently ratified by the European Parliament, which caps tariffs at 15%. EU officials hope the pact will serve as a safeguard against a full-blown trade war, though memories of previous transatlantic trade ruptures remain fresh.

Economic and geopolitical backdrop

The new tariff offensive unfolds against a backdrop of economic strain and geopolitical tension. The Iran war has cost $37.5 billion and disrupted energy markets, while Trump's approval ratings are at record lows. The administration's legal creativity reflects a determination to maintain protectionist policies despite judicial setbacks.