Trump's use of forced-labor concerns for tariffs faces a Democratic-led legal challenge, but U.S. trading partners are toughening up either way. The Trump administration resurrected its global tariffs by shining a light on forced labor. The tariffs face a court challenge, but the spotlight isn't going away.
After the U.S. Supreme Court in February shot down President Trump's global tariffs, the administration turned to a new theory to partially revive them, accusing America's trade partners of failing to take action against forced labor. Critics, including Democratic attorneys general and governors in more than two dozen states, last week asked a New York-based federal court to invalidate the new tariffs.
Regardless of the administration's motivations, after the U.S. unveiled its forced-labor tariffs, a number of U.S. trading partners began to beef up their own legal regimes. Increased global scrutiny on supply chains is likely to continue no matter what the U.S. Court of International Trade decides. "It's a big issue," said Luis Lozano, the former president of Toyota's Mexico unit.
Section 301 of the Trade Act of 1974 lets the president take action against countries it finds have engaged in unfair trade practices. The Trump administration supercharged this legal power by taking action in July against 60 economies that it said had failed to adequately address forced labor. The Uyghur Forced Labor Prevention Act effectively bans the import of any goods that can be tied to Xinjiang over human-rights concerns.
Source: Wall Street Journal US Business · Summarized by HeadlinesBriefing