Trump’s third and maybe final attempt to build a global tariff wall

The new global tariff regime that Donald Trump is trying to erect is a transparently cynical attempt to do what US courts have told him he can’t.

On Wednesday, the Trump administration announced new tariffs of either 10 per cent or 12.5 per cent on 60 of its trading partners, covering 99.4 per cent of all imports into the US, predicated on those countries’ failures to adequately prevent that imports were made with forced labour.

There are six countries that the US deems have made “some initial steps” to prevent the importation of forced labour goods. They will have a 10 per cent tariff rate imposed. The other 54, including Australia, face the 12.5 per cent rate.

Separately, the US is pressing ahead with an investigation of 16 of its biggest trading partners – including China, the European Union, Japan, India and South Korea – for what it has described as “excess manufacturing capacity and production” that could add another layer to their tariff burdens.

The new tariffs have little to do with the Trump administration’s concern about forced labour. They’re driven by the US president’s protectionist obsession with tariffs and a desire to replace the trade barriers that America’s courts have demolished, and restore the revenues lost.

In effect, they would replicate the global baseline tariff component of the “reciprocal” tariffs Trump had announced, rather theatrically, on “Liberation Day” in April last year.

Those tariffs were ruled illegal by the Supreme Court, with the administration now in the process of refunding some of the $US166 billion of revenue collected. (Having disgorged about $US20 billion so far, with plans to return $US85 billion, it is appealing a lower court ruling that it has to refund the entire amount).

When the Supreme Court struck down Trump’s first attempt at constructing a global tariff regime, he put in place temporary measures, using a different section of the US Trade Act, Section 122, which in a balance-of-payments crisis allows the president to impose a tariff rate of up to 15 per cent for a maximum of 150 days before they have to seek Congressional approval for an extension.

The 10 per cent duty imposed under that regime was also ruled illegal by a US court – America is not experiencing a balance-of-payments crisis, as with a floating currency, it actually can’t – and the tens of billions of dollars of revenue the government has been collecting in that tariff round may also have to be returned. The administration is appealing the judgement.

That second attempt at building the universal tariff wall faced an expiry date,