The Tarriff Hype.

Ron in Regina

"Voice of the West" Party
Apr 9, 2008
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Regina, Saskatchewan
Canada is facing the prospect of entirely new tariffs from U.S. President Donald Trump’s administration after Washington claimed Ottawa has a poor track record on preventing importation of products of forced labour.
“The sweeping nature of the tariffs—which cover an estimated 99 percent of all imports into the U.S.—is raising questions. Interos.ai, a company that makes software that helps firms understand risks within their supply chains, says its database lists 1.3 million companies globally that are highly likely to be engaged in what it calls “unethical labor,” including forced labor, child labor, and other unethical practices, in the past year.
The move comes as Canada’s biggest free trade pact, CUSMANAFTAUSMCALMNOP, is up for renewal.
Yet, there appears to be little correlation between the prevalence of forced labor believed to be in a country and the level of tariffs imposed. According to data from Interos.ai, three of the top 10 countries for unethical labor (Mexico, Malaysia, and Bangladesh) are taxed at the lower rate of 10 percent. And several countries with little known forced labor, including Switzerland, New Zealand, Japan, and the United Kingdom are subject to the higher rate of 12.5 percent.

If the true purpose of the tariffs is to reduce forced labor, the logic is “a little hard to swallow follow” says Interos.ai CEO Ted Krantz—and suggests that it has more to do with bringing in income for the federal government or creating leverage for negotiating. Eighty percent of companies believed to be engaged in forced labor are based in China and India, he adds.

It feels like strategically you’re getting further and further away from the core intent and just pushing as many buttons as possible to try to have impact, which is probably more in the geopolitical game theory than it is a direct tactic against forced labor, based on the data we see,” says Krantz.

“I do think there’s good intent here, but it does feel like the overall strategy is still around top line and getting more tariffs in place to try to help the economic recovery.”

“Jamieson Greer, who leads the office, responded to the Post editorial in a statement on the office’s website, suggesting that the paper was advocating for “a laissez-faire approach to modern slavery.” He wrote that the EU’s ban on goods made with forced does not take effect until the end of 2027 and accused Canada of not stopping shipments that included goods made with forced labor..like…American alcohol exports to Canada?🤯

“The United States must ensure those commitments are effectively enforced, while continuing to use its leverage to expand the fight against slavery in global supply chains,” he wrote.

The tariffs are not based on the amount of forced labor believed to be taking place within their borders. Instead, the tariffs are based policies each country has on the books preventing goods made with forced labor from entering their markets, and how proactively those countries detaining shipments into the U.S. that contain goods believed to be made with forced labor…but what about detaining shipments “from” the U.S. that contain goods believed to be made with forced labour??? Exact statistical data detailing the specific percentage of US prison-made goods exported to other nations is unavailable, as the US government does not track this figure.
“The USTR release further explains that the tariff rate is 10 percent for economies that, in its own judgment, have made partial efforts to reduce imports made with forced labor: Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan.

(Canada explicitly bans the importation of all goods from the US—or any other country—that are manufactured, mined, or produced wholly or in part by forced or prison labour. This prohibition is legally enforced under the Canada Customs Tariff and was integrated to meet trade commitments under CUSMA, which President Trump has stated he doesn’t want to renew)

Fifty-four other economies that “have failed to impose and effectively enforce a prohibition on the importation of goods produced with forced labor,” the agency says, are set to face a tariff of 12.5 percent.

“Even if the tariffs were imposed as a replacement to the IEEPA tariffs, Brittney Powell, a partner at the Washington, DC–based law firm Fox Rothschild., calls it “a clever policy decision,” because the Tariff Act of 1930 bans imports of goods made with forced labor. “To the extent that other countries don’t have a similar law or not enforcing those laws, the courts might find that the USTR was reasonable in finding that that constitutes an unfair trade practice,” she says.

While the Canadian importation ban is technically in full effect, watchdogs and human rights organizations have noted that goods produced via exploitative prison labour in the United States still occasionally enter the Canadian market, potentially leaving Canada open to this additional 10% tariff…by the U.S.🤔😳

This issue has sparked growing domestic advocacy urging the Canada Border Services Agency (CBSA) to increase its enforcement capabilities at border crossings. Because of this, the Government of Canada introduced legislation to strengthen the import ban framework, aiming to improve interception mechanisms at the border.

U.S. Ambassador to Canada Pete Hoekstra's speech at his Fourth of July party in Ottawa included a political nudge aimed at Canada, with American F-35 fighter jets flying over the crowd and a comment about some provinces' bans on American booze.🙄 American agricultural products and commodities produced by forced prison labor are entering global supply chains and being exported, though they are typically embedded as raw ingredients rather than sold directly as branded alcohol bottles for example, but catch22.

“Hoekstra set a goal on stage outside his official residence to get American liquor back on Canadian shelves by his next Independence Day party. "Next year, hopefully we can all take a toast of American bourbon semi-legally (except for Section 301 of the U.S. Trade Act of 1974 I guess) in the province of Ontario," Hoekstra said. "And toast the friendship and the relationship between the United States and Canada."