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China trade
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US tariffs on forced labour face legal risk as Chinese firms see impact easing: reports

Measures tied to alleged forced labour carry litigation risk, as localisation and procurement rules now weigh on Chinese firms, reports say

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The legal foundation of US President Donald Trump’s new tariffs is “not rock solid”, according to a report. Photo: Getty Images
Ralph Jennings
Fresh US tariffs targeting alleged forced labour risk legal challenges over possible misuse of the underlying law, but major Chinese companies already see the impact of the levies easing and expect new hurdles from other trade barriers, according to two reports.

The legal foundation for US President Donald Trump’s 10 to 12.5 per cent tariffs under Section 301 of the Trade Act of 1974 is “not rock solid”, the Washington-based think tank Centre for Strategic and International Studies said in a report on Monday.

The US, which stunned the world last year with sweeping tariffs of an intensity not seen in more than a century, announced the latest wave on July 23 against 60 economies including China, India, Japan and South Korea.

Washington said a probe had triggered the latest duties, arguing that existing measures had not kept goods produced with forced labour out of supply chains.
Our analysis suggests that the Trump administration’s move to reimpose high tariffs faces some serious risks
Centre for Strategic and International Studies

“The forced-labour Section 301 investigation has some unique features that make it potentially vulnerable to a court challenge on different grounds,” said the report written by trade experts Scott Kennedy and Claire Reade.

“Our analysis suggests that the Trump administration’s move to reimpose high tariffs faces some serious risks, especially if care is not taken to meet the relevant statute’s requirements.”
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