Trump Deepens Tariff Battle With Threat Over EU’s Google Fine

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.
This is Bloomberg Businessweek Daily, reporting from the magazine that helps global leaders stay ahead, with insight on the people, companies, and trends shaping today's complex economy, plus global business, finance, and tech news as it happens. The Bloomberg Businessweek Daily podcast with Carol Massar and Tim Stenovec. On Bloomberg Radio.

**Tim Stenovec** (0:32)
We got Mike McKee with us, Bloomberg News International Economics & Policy correspondent. He joins us here in the Bloomberg Businessweek Studio. Mike, I have trouble keeping track of all of these.
Fortunately, you're here to set us straight. People are familiar with the liberation day tariffs from last year, struck down by the Supreme Court. I'm still waiting on my refund check. I don't know if you've gotten yours.

**Michael McKee** (0:55)
No.

**Tim Stenovec** (0:55)
Okay.

**Michael McKee** (0:56)
You're not likely to get one. Don't wait too long.

**Tim Stenovec** (0:58)
Okay. We'll get to that. The new tariffs that were laid out yesterday, 4:57 PM Wall Street time. How are these different than what the president did last year?

**Michael McKee** (1:07)
Well, the president did the Section 122 tariffs after the Supreme Court struck down his IEPA tariffs, which gave him the ability to do 150 days of tariffs at 10 percent around the world. That expired at midnight last night. Today, they announced these new Section 301 tariffs, which is basically an effort to re-create the tariff levels that they already have. In this case, Section 301 allows tariffs on national security grounds, or if the US is parting the treaties and people are not keeping up with the treaties. It's kind of that part that it falls under because the US is accusing these countries of either using forced labor to produce things or not policing the companies that they're importing from.
And so then, they've levied 10% to 12.5% tariffs on these people, which is the same as what we had before with the 122s. So, it doesn't change the tariff level, maybe a little bit for some companies, but in general keeps tariffs at about where they are.

**Tim Stenovec** (2:11)
It's just a different justification.

**Michael McKee** (2:12)
It's just a different justification that they hope will be legal before the Supreme Court. But, while you were talking, we just saw a headline that some companies have already filed suit against the president on those tariffs, arguing that they're just an excuse for the tariffs that were already struck down as illegal by the Supreme Court. So, we're back where we were, as Carol was saying, deja vu all over again. And now we have these other threats today from the president on the 301 tariffs arguing that it's not fair to American companies that the EU can fine them for breaking EU law.

**Carol Massar** (2:56)
Yet some would say if the US felt foreign companies were breaking the law, right, we would do that. Well, of course. We would impose fines.

**Michael McKee** (3:05)
Of course. But you're trying to be logical.

**SPEAKER_1** (3:07)
Okay.

**Tim Stenovec** (3:09)
What are the, I mean, is there a sink, does it stem from forced labor in China? Is that where all of this stems from?

**SPEAKER_1** (3:17)
Yeah, what is that about?

**Michael McKee** (3:19)
Not necessarily. I mean, there is, and Bloomberg's done some award-winning reporting on this. Forced labor, basically slavery, around the world in many, many, many countries, particularly in Southeast Asia and Latin America, where, and Africa, people are just forced into producing for workers. It can be actual slavery where you're imprisoned and you're made to do it, or it can be economic imprisonment, basically.

**Tim Stenovec** (3:48)
But are there, I mean, is that a, is it legitimate? Does the US have a legitimate way of actually proving that these countries are doing business with companies that are using forced labor?

**Michael McKee** (4:01)
With a 301, you have to do an investigation. And so the administration has a written justification for these countries. Now, I would put some of it certainly under stretching the law as far as it will go.
The United Kingdom, for example, or Canada. But there are some legitimate uses. And so we'll have to see how legally this all plays out. But what's happening is the president is using these and he's going to put the tariffs in place and they will be in place while whatever legal battles go on.

**Carol Massar** (4:33)
So essentially a mechanism for imposing these tariffs while everybody figures out really what he can or can't do.

**Michael McKee** (4:39)
Right. Essentially.

**Carol Massar** (4:40)
So the Supreme Court ruling, like you brought this up because you've been talking with some of your buds here last night who were like, how can the president do this, right? With coming after the Supreme Court ruling. This is just a reminder that he has different levers he can pull.