Since the Supreme Court struck down its “Liberation Day” tariffs earlier this year, the White House has been turning to other ways of getting trade policy all wrong.
Its first idea was a 150-day tariff of 10% applied to almost all imports. When that measure expired last week, officials were ready with yet another scheme. This one may prove more durable — and hence far more damaging.
The new policy essentially replicates the old under a more creative legal interpretation. It imposes so-called Section 301 tariffs of up to 12.5% on U.S. trading partners that have failed to pass or enforce laws banning products made with forced labor. According to the White House, that covers almost all the goods the U.S. imports. The pretext strains credulity for sure. But the measure might nonetheless pass legal muster and comes with no automatic expiration date.
Further investigations are now underway, with a view to punishing China and other countries for “overcapacity” that harms the U.S. Combined with the new forced-labor measures, this battery of extra taxes could plausibly raise the average effective tariff rate from 11%, where it’s stood in recent months, back to 14%, restoring most of the impact of the Liberation Day schedule.
That’s not all. Earlier this month, the administration imposed new 25% tariffs on certain imports from Brazil, accusing it of unfair trade practices. Last week, it announced new duties of 50% on $20 billion of imports from Canada — counterretaliation for Canada’s earlier retaliation against other U.S. barriers. These are so-called Section 338 tariffs (aptly enough, a disinterred provision of the 1930 Smoot-Hawley Tariff Act).