I have previously written about how Trump's new Section 301 tariffs are illegal and harmful. The same goes for his earlier IEEPA tariffs (invalidated by the Supreme Court in a case I helped litigate), and Section 122 tariffs (struck down by the US Court of International Trade in May, though litigation continues). In an insightful recent article, economist David Hebert highlights an underappreciated type of harm caused by Trump's tariff policies that cannot be fully remedied by court decisions:
[T]here's a far worse outcome from this that cannot be undone by courts, elections, or policy reversals. These new tariffs and their justifications have only served to further destroy the relationships with allies and trading partners that we had previously taken as given. The costs of this will outlast every tariff schedule, court ruling, and this administration. They won't show up on BLS reports, BEA analyses, or Fed surveys. But they will be felt by every single American for years to come….
Canada, the European Union, the United Kingdom, and Mexico now face 10 percent tariffs for their alleged forced labor practices. Canada and Mexico are, of course, also parties to the USMCA, a trade agreement that this very president negotiated, signed, and called "a colossal victory" only to then walk away from. That same week, the President hit Canada with an additional 50 percent tariff on goods ranging from "wine to hockey sticks to cement" regardless of whether or not those goods qualify under the USMCA.
So in the span of a week, the White House effectively told Canada, our closest trading partner and ally, that America's word means nothing and then told them that they are complicit in forced labor.
An ordinary tariff is a tax. Trading partners are annoyed, sometimes retaliate, and sometimes negotiate. These tariffs are different. We didn't just tax Japanese goods. We announced to the world, as an official finding of the United States government, that Japan is profiting from slavery and needs to be punished for it. Norway, Switzerland, Australia, the United Kingdom, and South Korea are guilty of this, too. Then we set a penalty that just so happens to approximate the Section 122 tariffs that just expired.
Foreign officials must now contend with an even clearer reality: not only is an agreement with the United States not worth the paper it's printed on, but we will accuse you of horrendous practices if it means that an administration can re-impose tariffs. Our trading partners saw that the findings of investigations will be written to fit the desires of an administration instead of the facts on the ground. They learned that not only is America protectionist but that they will publish a serious moral accusation against a friend when doing so is politically convenient.
This changes how other countries will deal with us going forward.
