The Latest Tariffs Are Here To Stay But You Probably Won’t Notice Them

New tariffs took effect Friday covering more than 80 countries and 99 percent of imports to the United States, effectively replacing expiring levies that the Trump administration set up earlier this year. The expiring duties were themselves a stopgap measure to replace President Trump’s Liberation Day “reciprocal” tariff program that was struck down by the Supreme Court in February. The latest tariffs range between 10 and 12.5 percent, hewing closely to the near-universal 10 percent surcharge on goods entering the United States under the stopgap measure.However, unlike the earlier tariff actions, everything about the latest batch — from their timing to their stated justification and legal framework — suggests they may have more staying power. The Office of the U.S. Trade Representative, which conducts trade investigations and drafts tariff policy, said the new tariffs were assigned to penalize countries and economies for failing to keep goods made using forced labor out of their supply chains. Under the program, the 27 members of the European Union are considered a single “trading partner,” while Hong Kong and Taiwan are counted independently.“President Trump recognizes that decades of moral suasion have not eradicated forced labor from global supply chains. The United States has had a forced labor import ban for nearly a century, and rigorously enforces it; it’s well past time for our trading partners to do the same,” the United States trade representative, Jamieson Greer, said in a statement.Forced labor has been a point of concern for politicians on both sides of the aisle in recent years, particularly in relation to Communist China’s treatment of ethnic and religious minorities including the Uyghurs of Xinjiang Province. Researchers and human rights groups report that Uyghur adults are routinely arrested, detained and sent to factories thousands of miles away under the guise of government economic development programs. Products as diverse as car headlights and popular sneakers have been implicated in the forced labor program. A 2021 bill to block imports from Xinjiang drew more than 114 co-sponsors in the U.S. House of Representatives.Leaders from several of the countries targeted by the tariffs were quick to denounce the White House’s focus on forced labor as unjustified Friday.Canada’s trade minister, Dominic LeBlanc, released a statement asserting that, contrary to the White House’s findings, his country has “one of the world’s most robust frameworks to prevent and address forced labour, backed by strong legislative and enforcement measures.” He promised to continue “engaging constructively” with his American counterparts.Australia’s trade minister, Don Farrell, expressed outrage, telling reporters the measures were completely unjustified. “We believe that amongst all of the countries in the world Australia does take the issue of slavery, modern slavery, seriously, and will continue to do that,” Mr. Farrell said.The White House created the new forced labor tariffs using the president’s authority under Section 301 of the Trade Act of 1974, a statute that gives the chief executive the power to stand up tariffs to retaliate against discriminatory trade practices by other governments. Mr. Trump used the same law to hit China with waves of tariffs during his first term, initially in response to Chinese policies that forced American companies to hand over trade secrets, technology and intellectual property in order to do business with Beijing. As tensions grew, those tariffs came to cover more than $300 billion worth of goods from China. Despite a deluge of lawsuits over the China tariffs that hit the United States Court of International Trade starting in 2018, they held up. The Biden administration continued to defend them as the litigation rose to the Federal Circuit Court of Appeals. After losing twice, the importers challenging the Section 301 tariffs brought their claims to the Supreme Court, which declined to hear their case last month.A Georgetown Law School professor and co-chair of Wiley Rein LLP’s international trade practice, Tim Brightbill, called Section 301 “a well-known and tested tool for addressing foreign practices that are harmful to U.S. commerce” in a statement shared with The New York Sun on Friday. That history is key to the forced labor tariffs, following the failure of the “reciprocal” tariffs the Trump administration imposed on dozens of countries last year with a view to shrinking country-by-country trade deficits. Those levies relied on a law called the International Economic Emergency Powers Act (IEEPA), whose powers, the Supreme Court ruled, did not include such sweeping, global tariffs.Enter Section 122: Another part of the Trade Act of 1974, this section allows the president to address balance-of-payments deficits with temporary surcharges on imports, which the White House did immediately after the Supreme Court tossed the IEEPA tariffs. Section 122 tariffs may last no longer than 150 days, meaning the global duties imposed on February 24 timed out at midnight on Friday. Rather than stacking, the newest tariffs simply replace the import duties that disappeared.Whether or not they introduce a new burden on American consumers, the new tariffs mark the latest turn in a series of trade upheavals that have marked both of Mr. Trump’s terms.“Companies want foreseeability on trade matters, and the Administration’s recent actions on Brazil, Canada, and generic drugs suggest that its rollout of various tariff regimes continues to be unpredictable,” Mr. Brightbill said.

The Latest Tariffs Are Here To Stay But You Probably Won’t Notice Them

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