Latest / DEEP INSIGHT / Why 25 states sued the Trump administration over 'forced labour' tariffs

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Why 25 states sued the Trump administration over 'forced labour' tariffs · DEEP INSIGHT

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  Speaker 1: Welcome to the Global News Podcast from the BBC. I'm
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  Speaker 1: John at Jalil and today we're joined by our North
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  Speaker 1: America correspondent Anthony Thurker. And Anthony, we're talking about President
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  Speaker 1: Trump's latest tariffs and the pushback against them. Twenty five
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  Speaker 1: US states have filed a lawsuit to try to block them.
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  Speaker 2: Why well, they are alleging that these new tariffs are
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  Speaker 2: arbitrary and capricious, that they were imposed without reason. That
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  Speaker 2: a legal jargon for essentially accusing this administration of finding
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  Speaker 2: some way anyway to put new tariffs on foreign imports
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  Speaker 2: to replace the ones that they had instituted last year
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  Speaker 2: they got struck down by the Supreme Court and another
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  Speaker 2: round of terroifts that expired because there was a limit
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  Speaker 2: on them. So they are accusing this federal government of
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  Speaker 2: abusing misinterpreting existing law in order to impose tariffs on
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  Speaker 2: fifty nine countries and the European Union. They say there's
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  Speaker 2: no ground for that. They didn't do enough time to
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  Speaker 2: research it, because the justification the administration is using is
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  Speaker 2: that all of these countries, including the UK and the
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  Speaker 2: European Union, in China and Japan and South Korea, they
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  Speaker 2: all didn't do enough to stop forced labor imports, imports
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  Speaker 2: that were derived from forced labor. They said that there
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  Speaker 2: was weak justification for this. Of course, the administration counters
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  Speaker 2: that they did all the proper fact finding. This is
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  Speaker 2: well within their authority and these tariffs are going to
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  Speaker 2: be here to stay.
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  Speaker 1: But the Trump administration's critics will say, how can you
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  Speaker 1: do fact finding for what sixty or so countries in
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  Speaker 1: a matter of weeks?
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  Speaker 2: Yea, And that is going to be what this case
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  Speaker 2: is about. It's not about whether the Trump administration has
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  Speaker 2: this authority. They imposed similar tariffs on China under Section
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  Speaker 2: three or one of this nineteen seventy four Trade Act
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  Speaker 2: earlier in Donald Trump's term, and those were upheld by
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  Speaker 2: the court. So there is grounds. Unlike that first Supreme
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  Speaker 2: Court case, the first legal challenge, which was really pushing
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  Speaker 2: the boundaries, there's grounds for using this tariff action against
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  Speaker 2: countries that do rely on forced labor. The question is
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  Speaker 2: going to be is there enough evidence for all of
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  Speaker 2: these countries fifty nine countries in the EU and be
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  Speaker 2: able to find all of that evidence just in a
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  Speaker 2: matter of a couple of months. What the States are
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  Speaker 2: alleging is is that there was no time for that,
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  Speaker 2: and if you look at the terriffs, they matched pretty
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  Speaker 2: closely what Trump had been trying to do under other laws.
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  Speaker 2: So this is just an example of picking up everything
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  Speaker 2: they had before that the court struck down and finding
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  Speaker 2: a way around it and new justification.
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  Speaker 1: And it's not just the states that are suing. There
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  Speaker 1: are also small businesses bringing cases against the Trump administration.
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  Speaker 2: Right and the small businesses, some of them are the
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  Speaker 2: same small businesses importers of foreign goods that are sold
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  Speaker 2: here in the United States, but the same ones that
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  Speaker 2: brought the first lawsuit, the successful lawsuit against Trump, and
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  Speaker 2: they could certainly draw a line to the direct impact.
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  Speaker 2: They're the ones having to pay the terraffs. They're the
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  Speaker 2: ones who are having to raise prices. They're the ones
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  Speaker 2: who probably see consumer demand for their products go down
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  Speaker 2: because of these terraffs. It's just slightly more complicated legal
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  Speaker 2: reasoning for states bringing these lawsuits. Although what the states
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  Speaker 2: will argue is that they also buy imported products. They
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  Speaker 2: also have state agencies that rely on imported products. They
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  Speaker 2: also rely on income generated revenue tax revenue coming from
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  Speaker 2: these companies within their territory that are paying the terrafts,
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  Speaker 2: and if the businesses in their states aren't doing as well,
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  Speaker 2: then they don't get as much revenue. And that was
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  Speaker 2: an argument that the Supreme Court supported. It allowed them
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  Speaker 2: to proceed with their lawsuits the first time around, So
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  Speaker 2: I guess it worked once, it'll work again for the states.
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  Speaker 2: But if for people challenging these terrafts, they want to
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  Speaker 2: put forward more sympathetic characters, little companies, little businesses, people
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  Speaker 2: struggling to make ends, meets, and that's why you see
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  Speaker 2: these small businesses also been at the forefront of these lawsuits.
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  Speaker 1: And critics of the Trump administration would say that it's
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  Speaker 1: ironic that it's talking about forced labor because forced labor
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  Speaker 1: has long been an issue in the US itself.
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  Speaker 2: Yeah, there are questions. I mean, we've heard some countries
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  Speaker 2: accuse the United States that relying on prison labor because
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  Speaker 2: many of the major prisons in the United States do
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  Speaker 2: put their inmates to work. Of course, the United States
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  Speaker 2: has close trading relations with China. Although there had been
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  Speaker 2: tensions between the two countries, the United States still imports
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  Speaker 2: a considerable amount of products from China, So you could
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  Speaker 2: easily say you see the same sorts of justifications that
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  Speaker 2: the United States is using to impose these tariffs on
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  Speaker 2: the sixty different trading partners to also apply to the
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  Speaker 2: United States itself, and that I think will also be
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  Speaker 2: a key part of the case that these tariffs are
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  Speaker 2: arbitrary and capricious.
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  Speaker 1: And how long will it take before there's a resolution
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  Speaker 1: to this lawsuit.
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  Speaker 2: Well, we saw it take almost a year for the
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  Speaker 2: initial legal challenge to Donald Trump's first round of tariffs
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  Speaker 2: to make it all the way up to the Supreme
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  Speaker 2: Court and to be struck down by the Supreme Court.
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  Speaker 2: And in the meantime, those tariffs went into effect and
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  Speaker 2: they generated revenue, revenue that is now having to be
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  Speaker 2: returned to many of these businesses that paid the terrorffs.
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  Speaker 2: So I think we can't expect a quick resolution on this,
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  Speaker 2: particularly since this seems to be a little more of
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  Speaker 2: a gray area around this law. There might be more
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  Speaker 2: need to get legal fact finding on whether the justification,
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  Speaker 2: whether it's justification to impose these terrors, So I wouldn't
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  Speaker 2: hold my breath for a quick resolution. I think we
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  Speaker 2: could see some lower court start to weigh in, the
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  Speaker 2: Trade Court start to weigh in in the next few months,
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  Speaker 2: but for it to reach a final resolution, and gosh,
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  Speaker 2: this probably will get back up to the Supreme Court
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  Speaker 2: again at some point we may be looking at sometime
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  Speaker 2: next year.
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  Speaker 1: So Anthony, taking a step back, what's the impact of
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  Speaker 1: these successive rounds of tariff spin on the US economy?
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  Speaker 2: Well, I think if you look at economic studies, it
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  Speaker 2: has driven up prices for many products, has contributed to
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  Speaker 2: inflation because tariffs, these terrafts, the past ones have been
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  Speaker 2: passed along to consumers by and large. There was a
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  Speaker 2: certain period of time when prices didn't go up as
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  Speaker 2: much as economists predicted, but eventually that did start filtering
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  Speaker 2: down because companies whose margins are narrow can't keep swallowing
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  Speaker 2: the terriffs. They have to start finding ways to make
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  Speaker 2: profits on their import So you've seen some impact in prices.
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  Speaker 2: You've also seen some push the Trump administration would argue
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  Speaker 2: for major foreign manufacturers trying to find new ways to
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  Speaker 2: produce products here in the United States. Donald Trumpell regularly
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  Speaker 2: tout new auto manufacturing plants that are opening up, new
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  Speaker 2: manufacturing plants that are being built. Of course, the timeline
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  Speaker 2: for such things is longer than just months. It takes
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  Speaker 2: a long time to stand up new manufacturing facilities in
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  Speaker 2: this country, and so while Donald Trump has promised a
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  Speaker 2: rebirth of American manufacturing, we haven't seen that in the
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  Speaker 2: numbers yet.
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  Speaker 1: Well, given all this, what's a lightly impact going to
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  Speaker 1: be in the midterm elections in November.
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  Speaker 2: Well, according to public opinion polls, Americans don't like terrafs.
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  Speaker 2: They view it as harmful to the economy. They see
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  Speaker 2: a direct link between terrace and inflation and the higher
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  Speaker 2: prices at the grocery store and at the shopping centers.
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  Speaker 2: And so, if anything, it will be a political weight
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  Speaker 2: on Donald Trump his promises that there are long term
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  Speaker 2: benefits to these things. American voters don't typically see things
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  Speaker 2: that way. They look for the immediate implications, and so
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  Speaker 2: it is yet another piece of economic news that is
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  Speaker 2: providing a strong headwind for this president. When you throw
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  Speaker 2: in the higher energy prices because of the Iran War,
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  Speaker 2: higher agriculture prices because of the trade disputes that Trump
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  Speaker 2: has had with China, just a general trend of prices
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  Speaker 2: going up across this country. This is just one more
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  Speaker 2: piece of that. So it certainly doesn't help in the
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  Speaker 2: short term if you listen to Trump, you will say
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  Speaker 2: that the benefits are just around the corner, but that
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  Speaker 2: American voters don't vote about what's just around the corner.
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  Speaker 2: They vote about conditions on the ground when they go
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  Speaker 2: to the ballot box.
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  Speaker 1: Thanks Anthony. That was Anthony Zerka, our North America correspondent,
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  Speaker 1: and if you'd like to hear more from the Global
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  Speaker 1: News podcast, please click on the link below.