By Tom Fowdy
As reported last week, the United States added 47 Chinese firms to a blacklist accusing them of utilising "forced labour" and subsequently banning their goods from the United States. The move was the first such in Trump's new administration, enacting the legal authority of the "Uyghur Forced Labour Prevention Act" of 2021. This act bans all direct imports from China's Xinjiang Autonomous Region, with a "guilty as assumed" criteria that such goods are made with forced labour, unless they can verify that is not the case.
The act, by design, is political as opposed to ethical. Its sweeping criteria are intentionally designed to implicate supply chains by association-driven risk, and thus force their diversification, with what ultimately counts as "forced labour" being a vague, political interpretation, which is then deliberately used to bring down entire products. For example, the US has often seized goods at the border citing "forced labour" just because the material used to produce them, or a single component, came from Xinjiang.
If you haven't figured out already, this is not a "we are doing this because we really oppose forced labour"; this is a "get China out of your supply chain" tool that justifies American protectionist goals, and utilises ideological interpretations of state labour programs as its justifying premise. Donald Trump is currently turning to it again, why? First of all, the US has lost authority over his global trade war after his ten percent global tariff was struck down by the US Supreme Court earlier this year. Since that time, the administration has looked for legal justifications to uphold minimum tariffs, and appears to have settled on the premise that forced labour laws constitute one of them. Hence, the US immediately slapped the forced labour tariff on dozens of countries.
This represents one layer, but China is the other. As I wrote about before, the United States is clearly using "forced labour" tariffs to extract political and economic concessions from other countries, especially in relation to China. If the US is accusing a country of "Importing goods made with forced labour," then we must ask ourselves, what 3rdparty importer is the US referring to? Realistically speaking, it could be none other than China because there is no other high-profile exporting country which the US targets with such allegations in this way. Therefore, what does the US seek to do with this?
Broader US economic strategy clearly points to the fact that the United States seeks to assert dominance over supply chains in critical, strategic goods, and subsequently wire other countries to dependency upon them. The firms added to the recent US blacklist include "Apparel, aluminium, copper, cotton, electronics, food, lithium production, pharmaceuticals, and metals." These are not random goods, they are materials which are utilised in key supply chains. Some of them might be exported to 3rdparty countries, and then subsequently made into new products there. This creates a backdoor for China into the US, and China continues to hold the supply chain even if the US won't buy from them directly.
As a result, the US utilises forced labour allegations as a means to try and isolate China from the supply chain. Because supply chains are sometimes slippery and vague to source, it is much easier for the US to make a blanket accusation against a country, "accusing it of importing forced labour" with the goal of trying to undermine that country's trade relationship with China through US-based market denials, increasing political and commercial risk. The US applies the tariff, and diplomatically states that for this tariff to be removed, the target country must subsequently remove what the US exclusively determines to be "forced labour" from their supply chains, involving blacklisted Chinese firms and targeted products or materials.
Remember, the US allegation does not need to be empirically true, so to speak, or for the target to even believe it, it just has to create enough business and political risk that it creates compliance. The country involved then has to make a rational choice: "Do we lose our access to the American market, or do we cut off the Chinese product they are upset about?" and likewise, the country's diplomatic relationship with the United States itself is also weighed in the process. If the country is not willing to do exactly what the US wants, the White House might use it as leverage to make other demands, such as greater market access, and in each instance seeking to make unilateral deals which favour American preferences and deliberately seek to break up global and regional trade integration.
Ultimately, Donald Trump is a man of leverage. His modus operandi is very well established now. He seeks to gain leverage over a target and force negotiations, often by doing unprecedented things, with the goal of pressing them into accepting strictly unilateralist terms, often with minimal concessions. While his administration has, for now, ceased stating Xinjiang as a moral or ideological problem, as Mike Pompeo had established it to be, it nonetheless constitutes leverage, and it continues to serve his economic and trade-related goals. Having lost his trade war on other grounds, he sees the lever of forced labour, and pulls it accordingly. Only time will tell how successful he will be.
The views do not necessarily reflect those of DotDotNews.
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