Trump Launches Global Trade Probe on Forced Labor,
Targeting 60 Economies
The Trump administration began a trade investigation
Thursday into whether dozens of countries have policies to combat forced labor.
1. The administration of
Donald Trump has launched a Section 301 trade investigation into the forced-labor policies of about 60 economies.
2. The probe is being
conducted by the Office of the United States Trade Representative under the Trade Act of 1974, which allows tariffs
in response to unfair trade practices.
3. The investigation will
assess whether countries have adequate laws to prevent forced-labor goods from entering international trade.
4. Economies under review
include China, Canada, Norway, Saudi Arabia, Algeria, the European Union and
United Kingdom.
5. The move is part of the
administration’s effort to rebuild a global tariff system after the Supreme
Court of the United States struck down earlier broad tariffs imposed using
emergency powers.
6. The United States
already bans imports made with forced labor and
expanded restrictions under former President Joe Biden, particularly targeting
goods from the Xinjiang region of China.
7. U.S. Trade
Representative Jamieson Greer said the investigation aims to stop foreign
producers from gaining cost advantages through forced labor
practices.
8. The forced-labor probe is one of several trade investigations,
including those targeting excess industrial capacity, digital
services taxes and pharmaceutical pricing.
9. The administration
earlier imposed a temporary 10% global tariff, which could rise to 15%, but it will expire in
July unless Congress renews it.
10. The move has raised
concerns among trading partners, with the European Commission seeking
clarification and China criticizing unilateral tariff actions.
The
Trump administration on Thursday evening initiated a sweeping trade investigation
targeting dozens of countries over their trade policies on goods made with forced
labor.
The
inquiry was part of an effort by the Trump administration to resurrect a global
system of tariffs after President Trump’s first attempt was struck down by the Supreme
Court last month. On Wednesday, the Trump administration announced another major
trade investigation that could lead to tariffs, focusing on excess production in
the factory sectors of more than a dozen major trading partners.
The
new investigation will focus on the laws that countries use to regulate the use
of forced labor in goods they trade, not their domestic
situations. It will target 60 economies, including Algeria, Canada, Norway, Saudi
Arabia, China and the United Kingdom, as well as the 27-country bloc of the European
Union.
The
United States has banned imports of goods made with forced labor
for nearly a century. Under President Joseph R. Biden Jr., the United States passed
a law that greatly expanded that scope. The United States forbade the import of
any goods from the Xinjiang region of China, where accusations of forced labor have been rampant, unless importers provide documentation
that their goods were made without it.
The
trade agreements that the Trump administration has forged with dozens of countries
in recent months have also compelled other countries to make commitments not to
import goods made with forced labor.
“For
too long, American workers and firms have been forced to compete against foreign
producers who may have an artificial cost advantage gained from the scourge of forced
labor,” Jamieson Greer, the U.S. trade representative,
said in an announcement Thursday.
The
investigation is one of several that the Office of the United States Trade Representative
is pursuing in an effort to set up a durable system of global tariffs by this summer.
The administration has also proposed potential investigations into digital services
taxes, pharmaceutical pricing and unfair trade in sectors like rice and seafood.
The
investigations are being carried out under Section 301 of the Trade Act of 1974,
a law that allows the United States to impose tariffs in response to unfair trade
practices.
Administration
officials have not clarified how high the new levies could be, or how the patchwork
of investigations would apply to each country. They have said they would try to
replicate their previous tariff structure, which was struck down after the Supreme
Court ruled in February that Mr. Trump was not justified in using an emergency law
to impose the tariffs.
Immediately
after the Supreme Court decision was announced, Mr. Trump issued a new 10 percent
global tariff under a different legal authority. He has threatened to increase those
tariffs to 15 percent, but that has not yet gone into effect. But that tariff is
time-limited, and is set to expire in July unless Congress votes to renew it.
The
new Section 301 investigations are likely to be much more durable, though the administration
is required to carry out an investigation and hearings before they can be imposed.
The
new raft of investigations has caused frustration and angst among some trading partners,
who are wondering how their businesses and economies will ultimately be affected.
Singapore’s
Ministry of Trade and Industry said in a statement Thursday that the U.S. government’s
tariff announcement the day before had incorrectly said Singapore had a bilateral
trade surplus with the United States. In reality, Singapore runs a trade deficit
with the United States, and it had provided the U.S. government with that information,
the trade ministry said.
The
executive arm of the European Union, which was included in the “excess capacity”
investigation announced Wednesday, said on Thursday that it was seeking clarity
on how the moves would affect the trade deal it had made with the United States.
“We
can only reiterate our expectation that the U.S. fully honor
its commitments reflected in the E.U.-U.S. joint statement on this topic,” said
Olof Gill, a spokesman for the European Commission, the E.U. executive arm. He said
that the European Union “would respond firmly and proportionately” to any breach
of those commitments.
He
added that the European Union was a market-driven economy that did not consider
itself a contributor to excess capacity, an issue that economists and policymakers
typically link with China. Like the United States, the European Union has been struggling
to cope with a flood of cheap Chinese cars and other exports.
“The
European Union shares the United States’ concern regarding structural overcapacity
in the global economy,” Mr. Gill said. “However, the sources of such overcapacity
are well identified, and they do not lie in Europe.”
In
remarks to reporters the day before, Mr. Greer had been unsympathetic, saying that
the European Union had done “approximately zero percent” of what it was supposed
to do to finalize its trade deal with the United States. He said that the European
Union had legislation pending that would make promised changes to their tariffs
for many months, and that there were a variety of other trade barriers where Europe
had not taken action.
“We’re
still waiting for Europe to do a lot of what it promised,” he said.
The
investigations are also likely to rankle Chinese officials, who are busily preparing
for Mr. Trump to travel to Beijing at the end of the month for a meeting with China’s
leader, Xi Jinping.
In
a news conference on Thursday, Guo Jiakun, a spokesman
for China’s Ministry of Foreign Affairs, said that China opposed unilateral tariffs
and other restrictions. He called “overcapacity” a false premise and a “pretext
for political manipulation.”
Some
organizations that support domestic manufacturing and tariffs have praised the administration’s
new investigations, while others that depend on global supply chains expressed concern.
Hunter
Morgen, a lobbyist at Ballard Partners and a former trade policy adviser in the
first Trump administration, said the Section 301 investigations would allow the
administration “to methodically dismantle unfair trade practices.”
“What
we’re seeing is a big pivot in authority to target these abuses, one by one,” he
said.
But
Stephen Lamar, the president of the American Apparel & Footwear Association,
said that his group was discouraged by the proposed tariffs and that the administration
should slow down and work with various stakeholders, including Congress. He likened
the process to the administration trying to “glue together shattered glass in a
messy fix.”
“We
understand the administration is hurriedly trying to recreate the tariff rates it
had sought to establish under a scheme now deemed illegal by the Supreme Court,”
he said. “In this effort, the process increasingly feels like answers in search
of an investigation rather than an investigation in search of answers.”