By Tom Fowdy
The Trump administration has threatened dozens of countries with a new round of tariffs of up to 12.5%, claiming they had "had failed to curb trade in goods made with forced labour." The measures come amidst the US Supreme Court having struck down Trump's previous "emergency tariffs" as unconstitutional, dealing a blow to his global trade conflict and seriously undermining his leverage.
During his second term in office, Donald Trump has sought to utilise tariffs on a global scale in order to tear up the multilateral trading system and build a new one which is suited to unilateralist, US Preferences. In doing so, he has pushed countries to make deals which involve giving the US one-sided access to their domestic market, while nonetheless facing a minimum American tariff which will be raised higher if they do not comply.
While the claim of "forced labour" may represent a legal justification to reimpose tariffs given the previous court ruling, I believe from experience that this move represents an indirect shot at China, why? First of all, claims of forced labour have always been a cynical ploy in American politics to push for market exclusion of Chinese products under the legitimate guise of "human rights."
From 2019-2021, the United States amplified and weaponized allegations of Uyghur Persecution in order to strategically exclude Chinese products from its own markets, including Cotton, Tomatoes, Solar Panels, and, later, a blanket ban on all products from Xinjiang unless they could "prove" their innocence (proving a negative). We should interpret this as an obvious end to promoting American market protectionism, both in agriculture but also, as the Biden administration was interested in, renewable energy products. The US has otherwise turned a blind eye to other alleged forced labour practices throughout the world, as it does not suit its interests to focus on them.
Since that time, the "Uyghur genocide" narrative has largely disappeared from frontline politics as the second Trump administration has recalibrated its China policy to avoid direct confrontation and rhetorical escalation over sensitive issues, instead making more subtle and pragmatic moves in respect to competition, which revolve around unilateral deal-making. As such, rather than push a highly inflammatory campaign regarding Xinjiang, as the Mike Pompeo State Department did in Trump's first administration, the Trump administration seeks to leverage other countries to make deals which try to put America at an advantage over China.
As an example of this practice, Trump initially piled very high tariffs on Southeast Asian countries, such as Vietnam, Indonesia, Cambodia, etc, targeting them specifically because they had become a new transit point for Chinese goods into the United States through third-country rebranding. The United States demanded that these countries give them full market access, while also slapping a 40% tariff on any goods which were "transited" through a third country (China) to the US, with ambiguity on what defines this. The design? To try and incentivise these countries to remove China from their supply chains. Of course, that is easier said than done, and it presumably had little impact.
Thus, with "forced labour," Trump is undoubtedly trying again on a broader scale. First of all, we should assume what defines "forced Labour" is not easily proven. Is it a specific product? Or is it a part of a product? The US won't say, because exaggerating it is part of the design. Why? Because the goal is to implicate the entire supply chain, not to simply clean it up or to remove one problematic product. If the US can say "your supply chain has forced Labour in it," the goal is to make governments and companies effectively de-risk. When it comes to corporate thinking, you don't act on facts or whether you agree with it or not, you act on risk.
Thus, demanding that these countries remove what the US exclusively deems to be "forced Labour" becomes part of the leverage. This is designed to try to isolate China from global supply chains, specifically regarding products that other countries make, by using components from China. Again, this is designed to hit specific countries, which have become manufacturers themselves using Chinese components, such as India, Vietnam, Malaysia and Indonesia, very hard. Although many of these countries have already signed many free-trade agreements with China, such as RCEP, it is America's strategy to dismantle these trade ties in a de facto way by driving a wedge in it, by weaponizing its own market denial.
The question is, can countries feasibly make such a change? And are they politically willing? For countries such as Britain, the answer is yes, because they brazenly capitulate to anything Trump wants. If two Royal Palace visits and a Royal Trump to America were not enough of a signal as to where Britain's priorities stand, despite the President's abusive behaviour towards the country, what else is? Yet for many countries, this will be a painful, if not impossible, step to try and take. Hence, Trump may not get the results he wants, but that also too may be by design, because there is little else to justify upholding a minimum tariff across the world.
The views do not necessarily reflect those of DotDotNews.
Read more articles by Tom Fowdy:
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