The reason has changed, but the tariffs remain

On Friday, the United States began collecting new tariffs of 10 to 12.5 percent on imports from roughly 60 trading partners. The duties cover 99.4 percent of all US imports. The latest tariffs replaced a nearly identical set of tariffs that had expired just minutes earlier. The rates barely moved. The goods barely changed. What changed was the stated reason.

The new tariffs rest on a finding, under Section 301 of the Trade Act of 1974, that these 60 economies have failed to ban imports made with forced labor. Partners that commit to enacting and enforcing forced labor import bans pay 10 percent. Partners that do not make such a commitment pay 12.5 percent. The levy they replaced was a temporary 10 percent charge imposed under a different statute after the Supreme Court struck down the US administration's original and illegal "Liberation Day" tariffs in February and ordered tens of billions of dollars refunded. Those original tariffs had rested on the use of presumed emergency economic powers.

A basic diagnostic finding from the study of how complex systems fail applies here. That is: When the output of a system holds steady while its stated inputs keep changing, the stated inputs are not driving the system. The tariff is the constant. The justification is the variable. The justification, therefore, is not the cause of the tariff.

The Supreme Court struck down the first tariffs. The second expired by their own terms. The third began minutes later under a third statute. When a policy survives every change in its legal foundation, the law is not guiding the policy. The law is being fitted to it.

The design of the instrument says the same thing. It is a remedy that is narrow by nature. It identifies particular producers and blocks their goods on the grounds of forced labor. But the United States already owns a tool that does exactly that.

Section 307 of the Tariff Act of 1930 — the same act remembered for the Smoot-Hawley tariff wall — has prohibited imports made with forced labor for nearly a century and US Customs enforces it.

It is enforced through Withhold Release Orders against named facilities. That is what real enforcement looks like. A flat surcharge on 99.4 percent of imports, with carve-outs for fuels, fertilizers, autos, metals, pharmaceuticals and various foods, is built for a different purpose. It is a revenue and leverage instrument carrying a human rights label.

The administration has said as much. The president and his trade representative have stated plainly that the goals are reducing the US trade deficits and reviving the country's manufacturing. Trade economists reached the same reading within hours of the announcement: Forced labor supplies the legal foundation, not the motive.

The label still matters, because moral language is a finite resource. Forced labor is real. Removing it from global supply chains is one of the few trade objectives on which nearly every government formally agrees. But when that cause is used as legal scaffolding for a general tariff wall, the genuine enforcement work pays the price. Trading partners learn to hear the words as pretext, and the next accusation, however well-founded, arrives pre-discounted. An honest argument survives being stated plainly. "We want tariff revenue and negotiating leverage" is a plain statement. It was available, and it was not used.

Tariffs do not act on a single wire. They act on a network, and interdependent networks respond to uniform friction in predictable ways. Flows reroute. Costs migrate toward the end consumer. Participants reduce their exposure to whichever node generates the friction. The last effect is already underway. Governments from Brasilia to Canberra called the new duties unjustified within hours, and their durable answer will not be rhetoric. It will be quiet diversification into agreements and corridors that do not run through the US market. Each rotation of legal rationale accelerates the shift, because a business can price a tariff, but it cannot price a rule whose justification changes every few months. Uncertainty, more than the duty itself, is what freezes investment.

The deeper problem is that the stated end goal deserves better means. Rebuilding manufacturing is a worthy aim, but factories follow reliable electricity, skilled workers, modern logistics and stable rules over decades, not election cycles. A tariff supplies none of these. It can shelter a plant that already exists. It cannot build the transmission capacity or train the workforce that a new one needs. It does the opposite: It raises the price of the imported transformers, machine tools and steel that every new plant requires.

A more productive path is open. Enforce the century-old forced-labor import ban on evidence, producer by producer. Make the trade-deficit argument in its own name so that it can be judged on its merits. Invest at home in the foundations that decide where the world's next factories will be located. Washington, however, has instead opened investigations into 16 more trading partners over industrial overcapacity, suggesting a fourth rationale is already in the works. The tariff will presumably remain constant.

As has been said, when the winds of change blow, some build walls and others build windmills. The wind is now moving through the entire trading system.

Every economy on the list of 60 must decide which to build. So must the country that wrote the list.

The author is a professor emeritus and director of technological leadership at the University of Minnesota.

The views do not necessarily reflect those of China Daily.

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