The US seeks to refloat its tariffs policy

**Leanna Byrne** (0:00)
It's time for Tariffs 2.0, it's World Business Express from the BBC World Service. I'm Leanna Byrne.
The BBC reveals new evidence about shell in Nigeria and Unilever defends its new food combination.
Yeah, US President Donald Trump is trying to rebuild one of his defining policies of his presidency, tariffs. The White House is proposing new duties of at least 10% on imports and 60 trading partners, including the European Union, Canada, Mexico and the UK. The US Supreme Court struck down some of the president's earlier tariffs. This time around, the idea is to use Section 301 of the US Trade Act, which argues levies are needed to tackle goods linked to forced labor. So will this allow President Trump to rebuild his tariffs wall? I put that question to Deborah Elms, head of trade policy at the Hindrish Foundation in Singapore.

**Deborah Elms** (0:57)
For sure.
Part of that was to use national security tariffs, and part of it was to use these unfair trade practices tariffs. Between them, they're viewed as a more durable, longer lasting set of tariffs that will get us back to where we were a year ago.

**Leanna Byrne** (1:12)
Why would they be longer lasting and why do you think that they might stand up to scrutiny?

**Deborah Elms** (1:17)
I think the biggest argument is that they've been used before. This tool in particular, Section 301, was used very heavily in the 70s, 80s, and 90s, but it's continued to be in use under the first Trump administration and even into Biden. I think it has a track record. Whereas the tariff authorities that Trump used early in his second term were new and they had never been intended to be used in this way. Of course, the Supreme Court struck the first one down, the second one is just temporary, but there's a court case that's already ruled against that as well.
Turning to more durable, longer lasting authorities, I think is important for this administration.

**Leanna Byrne** (1:49)
Yeah, so these have come about following an investigation to how trade partners handle goods allegedly produced by forced labour. How can the US government prove that?

**Deborah Elms** (1:59)
Well, I think they've taken a fairly straightforward approach. They've said, do you have a law or a regulation that prevents the importation of products made with forced labour? And the answer to that question is, for the most part, no, in part because it's very difficult to do. But if you do have a law, do you enforce it effectively? And so between those two ways to look at this, do you have a law, do you force it effectively?
All 60 trading partners were found guilty as charged. They either don't have a law or they don't enforce it effectively. And therefore, tariffs to be imposed range from 10% to 12.5%.

**Leanna Byrne** (2:33)
Do you expect countries and companies that are in those countries to fight this?

**Deborah Elms** (2:37)
For sure, there will be some real unhappy customers. There is a comment period currently opening in the US for comments from companies and from governments. There will be a short hearing that follows that. And then after that, we'll have the final rates imposed. So we might still see some adjustments between now and then. But yeah, there's going to be some pushback, I think, on alleged forced labor, especially around enforcement and whether or not those rules have been enforced properly.

**Leanna Byrne** (3:04)
But Deborah, you're thinking this time around, actually, this is a more robust way of going about it.

**Deborah Elms** (3:09)
I think so, but what makes it sort of challenging is that we've never used 301 in this way. We've never used it against 60 trade partners at once. We've never used it on this accelerated timeline. And we've never used it where you punish first and negotiate afterwards. Congress gave authority to negotiate first, and if necessary, if you couldn't fix the problem, then you could do punishment. So the reverse of that could lead to a court challenge and a victory for those who are challenging it.

**Leanna Byrne** (3:33)
That was Deborah Elms from the Hindrish Foundation in Singapore. With me now, Ross Mould, Investment Director at AJ Bell. Ross, we haven't spoken about tariffs in a while. Do markets remember what they are? Are they still priced in?

**Ross Mould** (3:44)
They do. It's nearly just over a year since Liberation Day and then various backwards and forges about higher and lower tariffs and individual deals. They're not too happy about this. I think they felt that the tariff issue had largely gone away after the Supreme Court decisions.
But they're actually down today, but probably more because the oil price is up amid the absence of a deal over Iran and the streets of Hormuz. But nevertheless, it's not something they were necessarily expecting.