Why 25 states sued the Trump administration over 'forced labour' tariffs | Global News Podcast

Welcome to the Global News podcast from. the BBC. I'm Jon Jalil and today we're. joined by our North America. correspondent Anthony Zurcher. And. Anthony, we're talking about President. Trump's latest tariffs and the pushback. against them. 25 US states have filed a. lawsuit to try to block them. Why? >> Well, they are alleging that these new. tariffs are arbitrary and capricious, that they were imposed without reason. That's the legal jargon for essentially.

accusing this administration of finding. some way, any way to put new tariffs on. foreign imports to replace the ones that. they had instituted last year. They got. struck down by the Supreme Court and. another round of tariffs that expired. because there was a limit on them. So, they are accusing this federal. government of abusing, misinterpreting. existing law in order to impose tariffs. on 59 countries and the European Union. They say there's no ground for that. They didn't do enough time to research. it because the justification the.

administration is using is that all of. these countries, including the UK and. the European Union and China and Japan. and South Korea, they all. didn't do enough to stop. forced labor imports, imports that were. derived from forced labor. They said. that this was weak justification for. this. Of course, the administration. counters that they did all the proper. fact-finding. This is well within their. authority and these tariffs are going to. be here to stay. >> But the Trump administration's critics. would say how can you do fact-finding.

for what, 60 or so countries in a matter. of weeks? >> Yeah, that that that is going to be what. this case is about. It's not about. whether. the Trump administration has this. authority. They imposed similar tariffs. on China under Section 301 of this 1974. Trade Act. earlier in Donald Trump's term and those. were upheld by the court. So, there. there is grounds unlike that first. Supreme Court case, the first legal. challenge, which was really pushing the.

boundaries. There is grounds for using. this tariff action against countries. that that do rely on forced labor. The. question is going to be is there enough. evidence for all of these countries, 59. countries in the EU, and. and be able to find all of that evidence. just in a matter of a couple of months. What the states are alleging is is that. there was no time for that. And if you. look at the tariffs, they match pretty. closely what Trump had been trying to do. under other laws. So, this is just an.

example of picking up everything they. had before that the court struck down. and finding a way around it and a new. justification. >> And it's not just the states that are. suing. There are also small businesses. bringing cases against the Trump. administration. >> Right. And the small businesses, some of. them are the same small businesses, importers of foreign goods that are sold. here in the United States. They're the. same ones that brought the first. lawsuit, the successful lawsuit against. Trump. They could certainly draw a line. to the direct impact. They're the ones. having to pay the tariffs. They're the.

ones who are having to raise prices. They're the ones who probably see. consumer demand for their products go. down because of these tariffs. It's a. slightly more complicated legal. reasoning for states bringing these. lawsuits. Although, what the states will. argue is that they also buy imported. products. They also have. state agencies that rely on imported. products. They also rely on. income generated revenue, tax revenue. coming from these companies within their.

territory that are paying the tariffs. And if the businesses in their in their. states aren't doing as well, then they. don't get as much revenue. And that was. an argument that the Supreme Court. supported. It allowed them to proceed. with their lawsuits the first time. around. So, I guess it worked once, it'll work again for the states. But, it. for people challenging these tariffs, they want to They want to put forward. more sympathetic characters, little. companies, little businesses, people. struggling to make ends meet, and that's.

why you see these small businesses also. being at the forefront of these. lawsuits. >> And critics of the Trump administration. would say that it's ironic that it's. talking about forced labor because. forced labor has long been an issue in. the US itself. >> Uh yeah, there are questions. I mean, we've heard some countries accuse the. United States of relying on prison labor. because uh many of the the major prisons. in the United States do put their. inmates to work. Of course, the United. States uh has uh close trading relations. with China. Uh al- although there'd been.

tensions between the two countries, the. United States still imports uh. considerable amount of products from. China. So, you could easily say the You. see the same sorts of justifications. that the United States uh is using to. impose these tariffs on the 60 different. trading partners to also apply to the. United States itself. And that I I think. will also be uh a key part of the the. case that these tariffs are arbitrary. and capricious. >> And how long will it take before there's. a resolution to this lawsuit?

>> Well, we saw it take almost a year for. the the initial legal challenge to. Donald Trump's first round of tariffs to. make it all the way up to the Supreme. Court and to be struck out of by the. Supreme Court. Uh and uh in the. meantime, those tariffs went into effect. and they generated revenue. Revenue that. is now having to be returned to many of. these uh businesses that paid the. tariff. So, I think we can't expect a. quick resolution on this, particularly. since this seems to be uh a little more. of a gray area uh around this law. There. might be more uh need to find uh get the.

legal fact-finding on whether the the. justification whether there's. justification to impose these tariffs. So, uh I wouldn't hold my breath for a a. quick resolution. I think we could see. some lower courts start to weigh in, the. the court start to weigh in uh in the. next few months, but for it to reach a. final resolution, and gosh, this. probably will get back up to the Supreme. Court again at some point. We may be looking at sometime next year. >> So, Anthony, taking a step back, what's.

the impact of these successive rounds of. tariffs been on the US economy? >> Well, I think if you look at the. economic studies, it has driven up. prices for many products, has. contributed to inflation because tariffs. these tariffs, the past ones, have been. passed along to consumers by and large. There was a certain period of time when. prices didn't go up as much as. economists predicted, but eventually. that did start filtering down because. companies whose margins are narrow can't.

keep swallowing the the tariffs. They. have to start finding ways to make. profits on their imports. So, uh you've. seen you've seen some impact in prices. You've also seen. some push the Trump administration would. argue for. major foreign manufacturers trying to. find new ways to produce products here. in the United States. Donald Trump will. regularly tout new auto manufacturing. plants that are opening up, new. manufacturing plants that are they're.

being built. Of course, the. the timeline for such things is longer. than just months. It takes a long time. to stand up new manufacturing facilities. in this country, and so while Donald. Trump has promised a rebirth of American. manufacturing, we haven't seen that in. the numbers yet. >> Well, given all this, what's the likely. impact going to be in the midterm. elections in November? >> Well, according to public opinion polls, Americans don't like tariffs. They view. it as harmful to the economy. They see a.

direct link between tariffs and. inflation and the higher prices at the. grocery store and at the at the shopping. centers. And so, it it if anything, it. will be a political weight on Donald. Trump. Uh Uh his promises that there are. long-term benefits to these things. Uh. American voters don't typically see. things that way. They they look for the. immediate implications. And so, uh it is. yet another piece of economic news that. is providing a strong headwind uh for.

this president. When you throw in the. higher energy prices because of the Iran. war, higher agriculture prices because. uh of uh the trade dis putes that Trump. has had with China, uh just a general. trend of prices going up across this. country. This is just one more piece of. that. So, it certainly doesn't help in. the short term. Uh if you listen to. Trump, he will say that the benefits are. just around the corner. Uh but that uh. American voters don't vote about what's. just around the corner. They vote about. conditions on the ground when they go to.

the ballot box. >> Thanks, Anthony. That was Anthony. Zurcher on North America correspondent. And if you'd like to hear more from the. Global News podcast, please click on the. link below.