Last month, I wrote about the Office of the United States Trade Representative’s report recommending new duties on goods from 60 economies. That report used forced labor violations as a pretense to justify imposing tariffs. This is a longstanding policy goal near and dear to the administration. There are some changes from the Trade Representative’s proposal, including new exemptions. These are discussed in the White House’s Presidential Memo:
“These exemptions encompass
(a) raw materials that if subject to the proposed additional tariffs could lead to the unavailability of domestic supply;
(b) products that could cause economy-wide disruptions if subject to the proposed additional tariffs;
(c) products that cannot be grown or produced in sufficient quantities or at reasonable prices in the United States or obtained from other sources;
(d) products that if exempted from these tariffs would encourage economies that have made commitments to the United States regarding forced labor import prohibitions to implement those commitments or to enact and effectively enforce a forced labor import prohibition; or
(e) articles for which these tariffs may not contribute substantially to the elimination of the acts, policies, and practices of the economies found to be actionable in the investigations described above.”
Ironically, an administration so staunchly opposed to ESG is now using it as the legal underpinning for its trade policy. While countries could hypothetically avoid tariffs by combating forced labor, those that try are likely to find the administration’s goalpost illusory. Hopefully, these new tariffs do not weaken the legitimacy of calls to end modern slavery. These duties are likely to be challenged in court just as the previous tariffs were. We’ll see whether or not the courts buy the administration’s forced labor rationale.
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