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Editorial: A trade policy built on perpetual confusion won't work

The Editors, Bloomberg Opinion on

Published in Op Eds

Recurring legal setbacks haven’t deflected the White House from its plan to impose a worldwide tariff regime. Whether the fourth variant of this protectionist strategy, proposed last week, will fare better in the courts than its predecessors is doubtful. What’s certain is that it will cause yet more disruption, compound the economic damage already done and further harm U.S. relations with its allies.

To recap, the Supreme Court invalidated the administration’s “Liberation Day” tariffs in February, ruling that they misapplied federal law. Last month, the U.S. Court of International Trade ruled that the next iteration, so-called Section 122 tariffs set at a flat 10% rate to address a “balance of payments” problem, failed because there is in fact no balance-of-payments problem (under floating exchange rates, external payments always balance). These tariffs are due to expire in any case next month.

Undeterred, the administration has also promised specific Section 301 tariffs, which require a country-by-country determination of unfair trade practices; several investigations are underway. Again, though, the courts are likely to intervene, because the policy’s encompassing purpose doesn’t accord with its narrow statutory rationale.

The new idea is to apply Section 301 tariffs much more broadly in retaliation against trading partners that, according to the administration, buy goods made with forced labor — not because this violates human rights, by the way, but because it gives them an unfair competitive advantage. More than 80 countries stand accused of this malpractice and could face tariffs of 10% or 12.5%, depending on whether they have a ban that they fail to “effectively enforce” or no ban at all.

Canada, for instance, prohibited imports made with forced labor starting in 2020, but U.S. officials say it isn’t serious about enforcement. Nor is anybody else, apparently. According to the U.S. trade representative, most of the world enables forced labor at home or abroad — which gives the U.S. grounds to impose a new tariff of at least 10% on countries accounting for 99% of its imports.

The idea isn’t to add new tariffs to those already proposed, but to replace the ones that have been voided — and indeed reversed, if importers’ efforts to claim refunds succeed. If the new plan goes forward after a comment period, and assuming it isn’t neutered by further complications, the courts might be skeptical once more. The plan’s official purpose is transparently a feint, another effort to displace Congress from its constitutional function of setting taxes.

 

Amid this relentless confusion, U.S. importers and trading partners must be close to despair. Threats are made, deals are announced, but nothing is ever settled. If, despite everything, the administration’s plan for managed trade should eventually cohere, that would be no win. The evidence is clear that its tariffs will raise prices for U.S. consumers and producers, hold back competition and growth, and leave the trade deficit unchanged. For the economy’s sake and as a matter of cold political calculation, the White House should quietly pause, and then forget, this entire agenda.

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The Editorial Board publishes the views of the editors across a range of national and global affairs.

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©2026 Bloomberg L.P. Visit bloomberg.com/opinion. Distributed by Tribune Content Agency, LLC.

 

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