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Trade & Economy Briefing

US Tariff Case, Tanker Rates: What Changes? | Briefing 10/16

The US forced-labor tariff case drags on, tanker freight tops $35 a barrel and the EU caps Chinese hybrids. What changes for your costs?

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Contents
  1. Key takeaways
  2. Top stories
  3. Court fight continues over US “forced labor” Section 301 tariffs
  4. Tanker freight at records as the US weighs easing “shadow fleet” sanctions
  5. EU caps Chinese hybrid imports at 350,000 a year
  6. Updates from earlier briefings
  7. What it means for exporters and importers
  8. FAQ
  9. What US tariff do Korean products pay now?
  10. If the court strikes down the Section 301 tariffs, do they end right away?
  11. Do record tanker rates affect container cargo too?
  12. Press coverage / sources

Korean goods entering the US now face the “forced labor” Section 301 tariff in force since 24 July (12.5% in total including the MFN rate), and the court case challenging it is waiting for a ruling after supplemental briefs due on 16 October. Meanwhile, supertanker freight from the Middle East to Asia has hit about $36 a barrel, more than five times pre-war levels, and the EU will cap imports of Chinese hybrid cars at 350,000 a year.

Key takeaways

  • Since 24 July the US has applied a 10% or 12.5% Section 301 tariff to 60 trading partners covering 99.4% of US imports. For Korean goods with an MFN rate below 12.5%, the duty tops the total up to 12.5%. The Court of International Trade (CIT) heard argument on 30 September and asked for further briefs by 16 October; no ruling date has been set.
  • The International Energy Agency (IEA), in a monthly report cited by Reuters, says VLCC freight from the Middle East Gulf to Asia reached about $36 a barrel in early October, over five times the pre-war cost. Washington is weighing letting sanctioned “shadow fleet” tankers carry non-sanctioned oil.
  • The EU will cap Chinese hybrid and plug-in hybrid imports at 350,000 vehicles a year for four years from December. Brent settled at $105.92 a barrel on 15 October.

Top stories

Court fight continues over US “forced labor” Section 301 tariffs

The Office of the US Trade Representative (USTR) has applied tariffs of 10% or 12.5% since 12:01 a.m. US Eastern time on 24 July to 60 trading partners it found had failed to ban imports made with forced labor. Partners that committed to such a ban pay 10%; the rest pay 12.5%. Under the Federal Register notice, products of Japan, Korea and Switzerland with an MFN rate below 12.5% get a Section 301 duty that brings the total to 12.5%, and products with an MFN rate of 12.5% or more get no extra duty. Goods subject to Section 232 tariffs and certain raw materials are excluded.

The tariff followed the Supreme Court’s 20 February ruling that struck down most tariffs imposed under the International Emergency Economic Powers Act (IEEPA), and a temporary 150-day 10% tariff under Section 122 of the Trade Act of 1974. In the importers’ challenge (In Re Section 301 Forced Labor Cases), a three-judge CIT panel heard oral argument on 30 September. On 2 October it asked whether USTR had to consider each economy’s level of development, which statute supported its finding, and whether the plaintiffs can challenge the tariffs for all 60 economies, with answers due by 16 October. No decision date has been set.

Sources: USTR fact sheet https://ustr.gov/about/policy-offices/press-office/fact-sheets/2026/july/fact-sheet-ustr-section-301-action-response-failure-60-economies-ban-imports-produced-forced-labor , Federal Register https://www.federalregister.gov/documents/2026/07/28/2026-15181/notice-of-actions-in-section-301-investigations-of-acts-policies-and-practices-of-various-economies , https://tradelawdaily.com/news/2026/10/01/CIT-Judges-Probe-Government-About-USTRs-Section-301-Forced-Labor-Tariffs-2609300071 , https://insidetrade.com/daily-news/judges-seek-new-briefing-forced-labor-tariffs-after-oral-argument , https://businessday.ng/world/article/trumps-10-tariffs-take-effect-as-trade-confusion-deepens/

Tanker freight at records as the US weighs easing “shadow fleet” sanctions

The IEA’s monthly report, as reported by Reuters, says the VLCC rate from the Middle East Gulf to Asia reached about $36 a barrel by early October, more than five times the cost before the Iran war. US Gulf Coast to China freight also topped $37 a barrel, so switching to US crude does little to cut transport costs. The IEA said the higher delivered cost pushed margins for Asian refiners running medium sour crude into negative territory in September. Reuters reported that a supertanker due to carry about 2 million barrels from the US to Japan in late November will cost $81 million ($40.50 a barrel), about nine times last year’s average of $9.1 million for the same trip.

According to Reuters, the US is considering letting previously sanctioned “shadow fleet” vessels carry oil and fuel that is not under sanctions, with companies applying to the Treasury to use them. Analysts including Kpler expect little effect on freight, since many of those ships lack the insurance and inspection certificates needed for mainstream trade. Brent settled down 0.13% at $105.92 a barrel on 15 October, while WTI rose 3.03% to $97.97.

Sources: https://energy.economictimes.indiatimes.com/news/oil-and-gas/record-oil-tanker-rates-put-pressure-on-asian-refiners-iea-says/134955423 (Reuters, citing the IEA), https://www.hindustantimes.com/world-news/us-news/oil-shipping-costs-spike-9-times-to-40-50-a-barrel-as-us-japan-tanker-trip-hits-81-million-101792073967325.html , https://www.bairdmaritime.com/shipping/tankers/record-tanker-rates-could-see-us-roll-back-sanctions-on-shadow-fleet , https://www.investing.com/news/commodities-news/us-plan-to-ease-shadow-fleet-sanctions-unlikely-to-free-up-many-tankers-analysts-say-4952464 , https://finance.yahoo.com/energy/articles/oil-prices-fall-investors-weigh-012948990.html

EU caps Chinese hybrid imports at 350,000 a year

The European Commission confirmed it will limit imports of Chinese-made hybrid and plug-in hybrid cars to 350,000 a year, less than half the roughly 800,000 expected this year. The quota is set to apply from as early as 1 December for four years and rise 6% a year from the second year. Because it uses the World Trade Organization (WTO) safeguard tool, which needs no anti-dumping investigation, cars above the quota are held at customs rather than charged a tariff.

The rule is based on where cars are built: Chinese-brand cars assembled in the EU are exempt, while European brands’ China-built cars count toward the cap. Reports say the safeguard applies to imports from every source, including free-trade partners, with exemptions only for the European Economic Area, Ukraine, Kenya and small developing exporters. Citing Eurostat, China’s commerce ministry said the EU imported 107,000 Chinese hybrids in 2024 and 302,000 in 2025.

Sources: https://www.theguardian.com/environment/2026/oct/12/eu-deal-china-limit-imports-hybrid-electric-vehicles , https://www.automotiveworld.com/news/eu-caps-chinese-hybrids-at-350000-but-spares-local-plants/ , http://english.scio.gov.cn/pressroom/2026-10/13/content_118731088.html

Updates from earlier briefings

View from the deck of a large oil tanker looking toward the bow at sea, with the sun setting over the horizon

What it means for exporters and importers

For US-bound goods, start with the MFN rate for your HTS code. Korean products with an MFN rate below 12.5% are topped up to 12.5% in total, and Section 232 goods (such as steel, aluminum and autos) follow the 232 tariffs instead. Because the CIT ruling could change the duty or open refunds, keep your entry and payment records (US tariffs guide for exporters, HS code lookup and classification).

If you import crude or raw materials from the Middle East, freight now takes a much bigger share of landed cost, so recheck how freight and war-risk insurance are priced into your contracts (ICC A, B and C cargo insurance). Suppliers of hybrid cars or related parts to the EU should confirm country allocations and the implementing notice in the European Commission’s official publications.

FAQ

What US tariff do Korean products pay now?

Under the Section 301 tariff in force since 24 July, Korean products with an MFN rate below 12.5% pay 12.5% in total including MFN. Products with an MFN rate of 12.5% or more pay no extra duty. Section 232 goods and exempted products need to be checked separately.

If the court strikes down the Section 301 tariffs, do they end right away?

The timing and outcome of a ruling are not set. The panel will decide after the 16 October briefs, and MLex reports that sending the investigation back to USTR to redo is one possible outcome. Even after a ruling, an appeal could change when it takes effect.

Do record tanker rates affect container cargo too?

The rates are separate, but oil holding above $100 a barrel feeds into container fuel surcharges and war-risk surcharges on Middle East routes. Ask carriers to list surcharges separately when you get quotes.

Press coverage / sources

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