A LAW FOR MANY GRIEVANCES
Even if the current forced labour tariffs are challenged, Section 301 is likely to remain central to the Trump administration’s tariff strategy, because its flexibility allows it to be adapted to pursue very different trade grievances.
Already, 16 US trade partners are currently under investigation in a separate Section 301 case that alleges structural excess capacity. For some of these economies, the US cited their large trade surpluses as de facto evidence of overproduction.
Even those with overall trade deficits with the US were targeted: For example, Singapore was investigated on the grounds of excess capacity in semiconductors. According to Singapore’s written submission to the probe, the US exported US$3.8 billion more in semiconductors than it imported from Singapore. Yet Singapore could still be hit with higher tariffs in the future.
Section 301 tariffs are not the only trade actions being considered by the White House. The US continues to reach for a wider range of trade instruments than used by past administrations.
This includes Section 338, a never-before-used statute from 1930, which allows the US to impose tariffs of up to 50 per cent for discriminating against US commerce. Last week, Mr Trump applied the rule at the maximum rate to imports from Canada, to take effect next month.
The legal justifications may keep shifting but a tariff wall around the United States is here to stay.
Deborah Elms is Head of Trade Policy at the Hinrich Foundation.
