US President Donald Trump speaks at Wheeler High School in Marietta, Georgia, on Wednesday (local time). [AP]
US President Donald Trump speaks at Wheeler High School in Marietta, Georgia, on Wednesday (local time). [AP]

The Trump administration's decision to impose new tariffs on 60 countries and economic blocs under the banner of "forced labor" is widely seen as a substitute for the reciprocal tariffs that courts have effectively blocked — a move designed to keep tariff policy alive while reducing legal risk by anchoring it to Section 301 of the Trade Act.

The Office of the United States Trade Representative finalized on Wednesday so-called "forced labor tariffs" of 10 to 12.5 percent on South Korea and 59 other countries and economic blocs, citing Section 301 of the Trade Act as the legal basis.

The USTR said those countries had failed to adequately block imports of goods produced with forced labor, thereby harming US trade.

In Washington and beyond, however, the prevailing view is that the measures are less about combating forced labor than about establishing a new legal foundation to replace the reciprocal tariffs.

Earlier, the US Supreme Court ruled that the country-specific reciprocal tariffs imposed under the International Emergency Economic Powers Act were unlawful.

In response, the Trump administration temporarily applied a 10 percent global tariff under Section 122 of the Trade Act — which can remain in effect for up to 150 days — and then, just before that authority expired, finalized the forced labor tariffs under Section 301 to close the gap.

Enacted in 1974, Section 301 of the Trade Act allows the US government to impose additional tariffs and other retaliatory measures against foreign governments engaged in unfair or discriminatory trade practices.

Peter Harrell, a former White House official in the Joe Biden administration, told The New York Times that "the USTR is using the forced labor investigation as a pretext to impose the tariffs that President Trump wants," adding that "forced labor is just the justification."

The Washington Post assessed that the Trump administration had chosen a legal basis less vulnerable to litigation than the reciprocal tariffs, describing the approach as a strategy to deploy every available trade authority.

Critics have also questioned the internal consistency of the tariff rationale.

Applying the same 12.5 percent rate to China — a country long criticized internationally for forced labor — as to South Korea, Japan and Switzerland makes it difficult to argue that addressing forced labor is the policy's core purpose, analysts said.

The Trump administration is unlikely to stop there.

The USTR launched a Section 301 investigation into overproduction in March alongside the forced labor probe, and overproduction tariffs are expected to be announced soon. South Korea is subject to both investigations.

Trump recently imposed an additional 50 percent tariff on Canada under Section 338 of the Tariff Act of 1930 and has been expanding product-specific tariff investigations under Section 232 of the Trade Expansion Act. The moves signal a determination to keep tariff policy going by turning to alternative legal authorities even when courts intervene.

Even as military tensions with Iran flare anew, Trump has maintained tariffs as a signature economic campaign pledge.

USTR chief Jamieson Greer told the Senate Finance Committee on Thursday that "the legal authority the administration uses has changed, but the trade strategy has not," adding, "We will continue to use tariffs."

However, concerns have been raised that additional tariffs could increase the burden on American consumers and stoke inflation at a time when rising oil prices and broader price pressures from Middle East tensions are already mounting.

South Korea cleared an initial hurdle by receiving the expected 12.5 percent forced labor tariff rate. But with overproduction tariffs potentially on the way, maintaining the 15 percent ceiling on US tariffs that the two countries agreed to through bilateral trade talks has emerged as the immediate challenge.


sjy@heraldcorp.com