It’s been a long journey for President Donald Trump as he looks for justification to erect a tariff wall around the US, including against key allies.
From the opioid crisis to illegal immigration, then the need to bring manufacturing back to America’s shores, the list is long.
During Trump’s second term, a new justification for trade tariffs imposed on allies has emerged almost every month.
Some have been overturned by the courts, some by economics and some by our own logic. And so, Trump has now begun effectively accusing dozens of trading partners of trading in goods that have been produced using forced labor.
As one industry insider put it, these are “tariffs in search of authorization.” The forced labor line protects President Trump’s tariffs against challenge by Congress or the courts.
In practice, the levies are surprisingly similar to previous rounds of tariffs imposed by the country for completely different reasons.
The good news for the UK is that the regime is effectively the same as before.
What has changed is that our nearest neighbors in the EU now have a much better deal than before, and in turn they are better off than the UK.
While the UK and EU each appear to have a rate of 10%, the EU’s rate is a flat rate, while the UK’s will apply alongside other tariffs on many goods, including footwear and textiles.
The government made effective deals on medicines, steel, aluminium, cars and whiskey with the help of King Charles.
However, the overall trade-weighted effective tariff rate for the EU (8.5%) may be slightly lower than the UK (6.8%) at the end of this process.
It shouldn’t make that much difference, but the help provided by making the first deal and post-Brexit trade freedoms seems short-lived.
William Benn, trade expert at the British Chambers of Commerce, points to competitive advantages for EU exporters to the US in some sectors.
The EU has received better treatment because it has banned goods involving forced labour, while the UK has not.
This is not an allegation on the use of forced labor in supply chains. It’s about passing specific legislation that mirrors the US ban on products that use forced labor in supply chains.