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Businesses sue to block Trump’s tariff reboot

1 day ago 4

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“Being able to satisfy the president and work with the trading partners on a long-term basis and do something that makes sense for the economic actors involved … it has to be a balancing act,” said a former U.S. trade official, granted anonymity to speak candidly. “Even countries that take more strident positions than we do follow this same practice of carving out things that make economic sense while maintaining the big, bold headline.”

According to the fine print in a Federal Register document uploaded late Thursday, the new tariffs that went into effect Friday on 60 trading partners maintain exemptions the White House had included in the now-defunct global duties that the Supreme Court struck down in February, such as imports from Canada and Mexico that are compliant with an existing North American trade agreement.

They also keep the carve-outs for food and agricultural products like coffee and cocoa beans that the administration added last fall, acknowledging those goods simply cannot be produced at scale in the U.S.

But Trump’s latest tariffs, which are premised on the claim that foreign countries are not doing enough to eliminate forced labor from their supply chains, added even more exempted products to the list, from cork, to planting seeds, to semiconductor testing and inspection equipment. In all, more than 470 new products were exempted, spanning food items, farming inputs, raw metals and industrial materials, used clothing, and art and antiques.

Thursday’s tariff announcement was the first step in a series of expected duties the administration plans to impose as it works to rebuild its protectionist trade policy — and it hopes will remain in place for the long haul. In addition to the forced labor investigation, U.S. Trade Representative Jamieson Greer has launched several other probes that, when completed in the coming months, could justify additional duties on more than 16 trading partners, and it is looking at imposing tariffs on a range of industries that are important to national security, from robotics to wind turbines to pharmaceuticals.

But any new round of tariffs will have to balance the administration’s trade priorities with an uncertain economy. Gas prices have continued to rise amid the Iran war, ratcheting up voters’ sensitivity to price hikes ahead of midterm elections that could undercut Trump’s power in Washington. The U.S. and China are engaged in a fragile trade detente, that could be upended by U.S. trade action in key industrial or tech sectors, relaunching a trade war that briefly sent tariffs between the world’s two largest economies soaring into triple digits.

Jacob Jensen, director of trade policy at the center-right think tank the American Action Forum, said all the carve-outs in Trump’s latest round of tariffs are broadly a response to “an affordability concern.”

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