Here he goes again. US President Donald Trump is raising and lowering tariffs on a whim, violating international agreements he signed and almost certainly breaking federal law. The only novelty this time is a fresh pretext: stopping forced labour.
The administration is right that too little is done about forced labour. But its stated concern is a ruse. The new tariffs closely track those Trump imposed based on trade balances. Are we to believe bilateral trade deficits just happen to be highly correlated with forced labour?
After the Supreme Court struck down his previous tariffs, the administration imposed 150-day temporary tariffs - already ruled illegal but still under appeal even as they expired in late July - and now these new ones following an 'investigation' into other countries' supposed failure to police labour abuses. Not surprisingly, China, long suspected of using forced labour, has largely been given a pass. With its control of rare earths and critical minerals, China can slap Trump down whenever it wants. When another country has the means and willingness to fight back, Trump always chickens out (TACO). This time, he didn't even bother picking a fight with the Chinese.
If Trump truly cared about forced labour, he'd address it at home. The US has long been a centre of forced labour, thanks to a loophole in the 13th amendment: 'Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States.' This language was infamously used in the Jim Crow South to defend chain gangs, and it's still abused across much of the US, with fewer than a quarter of states forbidding forced labour. The US has just 5% of the world's population but a quarter of its prisoners. According to a thorough study by Michael Poyker, nearly 1.4 million US prisoners were employed in 2005, with roughly 600,000 working in manufacturing - 4.2% of the total manufacturing workforce then. (For insight, watch Ava DuVernay's 2016 documentary, 13th.)
When Trump slapped tariffs on the world last year, he called them 'reciprocal'. In this context, reciprocity would demand high tariffs on products from US states that still exploit prison labour.
The new tariffs against the EU are especially hard to justify. A 2024 EU law (the Corporate Sustainability Due Diligence Directive) already bans importing goods produced with forced labour, including subcontractors'. In another pearl of hypocrisy, US commerce secretary Howard Lutnick previously claimed that law posed 'unnecessary negative burdens' on American companies, prompting the US to consider 'all conceivable trade tools'.
The EU should call out this hypocrisy and not capitulate. It should impose reciprocal tariffs on goods from US states using prison labour most extensively. The list of goods and companies reportedly using prison labour includes leading US firms like Burger King, Cargill, and Walmart. If Trump's actions spur the EU to investigate forced labour in the US, it would do US workers a service. (Sadly, hardly anyone in the EU has mentioned it; we've only heard sighs of relief that Europe wasn't hit harder.)
Nor does the hypocrisy end there. To justify tariffs on Canada, Trump invoked a provision of the Smoot-Hawley Tariff Act of 1930 allowing responses to discriminatory tariffs. But the entire WTO system is based on nondiscrimination, a principle Trump's policies have flagrantly defied. Canada imposed tariffs on US goods in retaliation for Trump's discriminatory tariffs.
Once again, Trump is subverting international law to seize more value from global supply chains, harming the US economy. Tariffs are just a distortionary tax at the expense of American consumers and competitiveness.
Trump's tariff wars haven't reshored manufacturing. US manufacturing jobs have declined by 75,000 since his second inauguration, after rising under Joe Biden. The US trade deficit in goods hit a record $1.24tn during Trump's second term. No surprise to economists: multilateral trade deficits depend less on tariffs than on macroeconomic variables like national savings, which Trump's record fiscal deficits have undermined.
Trump gets away with bullying because too many people capitulate. Most businesses and rival governments prefer going along to get along. But Trump is like any authoritarian: he needs to be feared. The longer the world gives him what he wants, the greater the disaster for us all.