

Audio By Carbonatix
Last week the Supreme Court declined to take up a challenge to the Trump administration’s Section 301 tariffs on China. These are used against “unreasonable and discriminatory practices.” There is little doubt that China’s brutal treatment of Uyghur minorities, filtering them into industrial work camps against their will, qualifies as “forced labor” under Section 307 of the Tariff Act of 1930.
But the Trump administration is essentially rebuilding the tariff regime it erected under IEEPA, under Section 301 of the Trade Act of 1974. It basically charges threescore nations with “unreasonable practices” for not mirroring the 1930 Tariff Act’s ban on forced labor. It doesn’t charge them directly with any particular participation in the Chinese or North Korean supply chain, but it does essentially demand a universal regulatory framework. Essentially we are raising tariffs while charging other nations with potential complicity with slavery.
Having refused to hear HMTX Industries’ challenge to the existing China Section 301 tariffs, the Supreme Court is for now leaving this to Congress. There is no sunset or temporal limit on Section 301 tariffs. Historically, Section 301 tariffs simply remain on the books. But Congress could end them any time it wants. I don’t expect action there. They will likely sit back and see if the president uses these for revenue, for rebalancing, or as negotiating positions.
There are legal avenues yet unexplored, a challenge on nondelegation grounds, or under the targeted Administrative Procedure Act, arguing that the imposition and process is arbitrary. So far the administration’s statements have focused on the moral and strategic aspect, forcing countries to adopt our higher standards, but also a hope of reshoring in the longer term. But, most people do expect substantial revenue hitting the Treasury from these import taxes, and I wonder if that will prove to be the most politically difficult to give up.