Rumor: Trump's New Chapter of 'Tariff Tyranny' – Taiwan Beware of Short-Term Gain, Long-Term Pain

The United States has introduced new tariffs on 60 trading partners, citing 'failure to effectively prevent the importation of forced labor products.' Most countries have silently accepted the move, while a few have voiced complaints. Although these new tariffs can be seen as an extension of previously imposed duties, their absurdity and lack of justification are even more pronounced. Taiwan, while subjected to lower tariffs than Japan and South Korea and thus appearing to benefit in the short term, must remain vigilant against the risk of 'short-term gain, long-term pain.'

The U.S. launched the 'Forced Labor 301 Investigation' in March this year, and last week announced its findings. New tariffs of 10% or 12.5% will apply to the European Union, Taiwan, Japan, South Korea, and Switzerland. For the remaining 38 countries, including China, a 12.5% tariff will be added on top of existing duties, justified by insufficient efforts to combat forced labor. U.S. Trade Representative Grillo stated, 'Today’s action will begin to correct what is both a human rights violation and a trade distortion, improving worker welfare around the world.'

The ideals sound noble and the rhetoric is polished, but no one truly believes it. The global consensus is clear: Trump is merely using forced labor as a pretext to justify tariffs. Tariffs have long been Trump’s favorite and, in his view, most effective 'all-purpose weapon'—capable of correcting America’s massive trade deficit, incentivizing manufacturing investment to return to the U.S., serving as a geopolitical lever, and even punishing countries deemed 'disrespectful.' Since taking office in January last year, tariff policy has remained central to Trump’s agenda, shaping global attention and economic interests.

However, since the invocation of the International Emergency Economic Powers Act for 'reciprocal tariffs' in April last year, the legal basis for Trump’s tariff war has remained in a gray zone. After the U.S. Supreme Court ruled this authority unconstitutional on February 20 this year, the White House shifted to using other trade laws, such as Section 122 of the 1974 Trade Act. Yet this authority has a limited duration (150 days), which explains why the U.S. initiated the 301 investigation in March—to ensure a 'seamless transition' for continued tariff imposition.

Thus, the only real objective is clear: to keep collecting tariffs. The justification is irrelevant and widely seen as a mere formality. The economies now targeted under the pretext of 'failing to block forced labor imports' are not the developing, authoritarian, or human rights-deficient nations one might expect, but include all advanced economies—such as the EU, UK, Canada, Japan, Taiwan, and South Korea.

More curiously, 17 countries—including Canada, India, Indonesia, Malaysia, Mexico, and the UK—have been assessed as having either implemented, committed to, or partially enforced bans on forced labor product imports. Yet they are not exempted for 'good performance.' Instead, they face an additional 10% on top of existing tariffs, while non-compliant countries face 12.5%. China, long accused by the U.S. of severe forced labor practices, also faces a 12.5% surcharge—just a 2.5 percentage point difference from those making efforts.

This reveals that the 'failure to block forced labor imports' is merely a convenient excuse to impose tariffs. The minimal difference in penalties between compliant and non-compliant nations underscores the pretextual nature of the policy. Moreover, the Trump administration has never been one to prioritize labor rights, often opposing 'woke culture' and progressive labor standards.

In past 301 cases, countries could avoid tariffs by meeting U.S. demands—such as strengthening intellectual property protections. But this time, no country, including Taiwan, can expect to eliminate the tariffs by 'meeting U.S. standards' on forced labor imports, because the tariffs were never genuinely about that issue. Even if improvements are made, the U.S. will simply find another excuse to impose new tariffs.

Taiwan has received a relatively favorable treatment with a flat 10% tariff without stacking, better than Japan and South Korea. While it must still perform symbolic actions and provide justifications to the U.S. on forced labor prevention, it should not expect these gestures to lead to tariff reductions or removal. Increasing investments by TSMC in the U.S. would likely yield far greater benefits in easing tariff pressure.

Nonetheless, the long-term impact on Taiwan remains uncertain. While all nations recognize the absurdity and injustice of Trump’s 301 tariff campaign, most have accepted it with only verbal objections. Even China, typically defiant, has refrained from retaliation. In a sense, this is merely a replacement for the existing 10% additional tariffs—indicating that nations have already normalized, accepted, and effectively submitted to a 'standard' U.S. tariff of 10–15%.

Yet from another perspective, countries are quietly seeking to reduce their dependence on the U.S. In the long run, America’s share in global trade may decline—a negative outcome for the U.S. itself. For Taiwan, whose export reliance on the U.S. continues to grow, this situation demands vigilance and a proactive strategy to avoid future vulnerabilities.