US to Uphold EU, Japan Tariff Caps Amid New Forced Labor Tariffs, USTR Says

U.S. Trade Representative Jamieson Greer confirmed on Thursday, June 4, that the Trump administration intends to honor existing trade agreements that cap tariffs on goods from the European Union and Japan, even as it moves forward with a new proposal to levy broad import taxes on 60 economies. Speaking to reporters in Paris, Greer’s comments aimed to quell uncertainty that arose after the White House announced the proposed tariffs earlier in the week.

The announcement on Tuesday, June 2, outlined a plan to impose import taxes of at least 10% on dozens of countries. The proposal followed a Section 301 investigation under the Trade Act of 1974 into the alleged use of forced labor in the supply chains of U.S. trading partners. This immediately raised concerns for economies like the EU, which had previously negotiated a deal with the U.S. in Turnberry, Scotland, to cap most American tariffs on its goods at 15%.

This latest development offers a moment of relief for importers, but it highlights a persistent and challenging reality for American businesses: trade policy is increasingly volatile and unpredictable. For small and mid-sized companies, this is not an abstract geopolitical issue; it is a direct threat to operational stability and profitability. The whiplash between a sweeping new tariff announcement and a subsequent clarification creates significant planning hurdles. We see clients struggle to forecast costs, manage inventory levels, and set prices when the landed cost of their essential goods can change with little warning. The continued reliance on Section 301 investigations suggests this environment of uncertainty is here to stay.

This instability makes proactive operational planning essential. Businesses can no longer afford a reactive stance to trade policy shifts. This is where strategic supply chain optimization becomes a critical defensive measure, helping to build resilience against future shocks. It involves diversifying supplier bases, mapping out alternative sourcing routes, and rigorously analyzing the total cost impact of potential tariffs before they are implemented. To understand how to fortify your business against this trade volatility, contact C&S Finance Group LLC at csfinancegroup.com for expert guidance.

“We understand that a deal is a deal,” Greer stated on the sidelines of an Organization for Economic Co-operation and Development (OECD) ministerial meeting, directly addressing the agreement with the EU. He expressed confidence that the administration can implement the new tariffs without violating prior commitments. According to Reuters, Greer explained that the findings from the Section 301 investigation provide President Trump with the legal authority to impose tariffs “up to a certain level,” implying that new levies could be applied within the existing 15% cap stipulated by the deals with the EU and Japan.

Greer added that the U.S. believes “there’s room to accommodate that deal within the context of what we’re doing, provided that the European Union delivers on the Turnberry deal,” as reported by The Business Times. The assurance appeared to be a key topic of discussion at the OECD meeting.

The clarification was welcomed by European officials. EU Trade Commissioner Maros Sefcovic, who met with Greer at the OECD event, confirmed the mutual understanding. Sefcovic told reporters that both sides agreed “the deal is the deal,” which for the EU means honoring the terms of the Turnberry agreement, including the all-inclusive 15% tariff ceiling. According to reports, Sefcovic also conveyed that EU member states were surprised to be included in a tariff action related to forced labor, given their high labor standards, but said he expects the European Parliament to approve the Turnberry deal.

The Section 301 investigation into forced labor is just one of several trade actions underway by the administration. Greer's office confirmed that the findings of a second, separate Section 301 probe will be released in the coming weeks. This second investigation targets alleged structural excess manufacturing capacity in 16 of the largest U.S. trading partners, a list that includes China, the EU, and Japan. Tariffs resulting from this second probe could potentially be more significant and could test the limits of the existing agreements. While Greer’s recent comments provide short-term assurance, the looming results of this second investigation create another layer of uncertainty for businesses that rely on imports from these key economic blocs.

All eyes will now be on the U.S. Trade Representative's office for the release of its findings on excess manufacturing capacity. The details of that report, and the administration's subsequent actions, will be a critical test of its commitment to the tariff caps and will signal the next chapter in trade relations for U.S. businesses and their international suppliers.