Latest tariff proposal reveals US is caught in dilemma of its own making: China Daily editorial

The United States administration's latest tariff offensive targeting 60 economies including China was greeted around the world with something unusual: a collective shrug.

That is because Washington has been signaling for months that it needs a legal substitute for the sweeping tariffs struck down by the US Supreme Court earlier this year.

The White House's temporary global tariffs — imposed under Section 301 investigations after its earlier tariffs were ruled unlawful — are due to expire next month. Allowing a gap in tariff collection would be politically costly at a time when the US' fiscal deficit remains elevated and the midterm elections loom on the horizon.

The US administration therefore has a strong incentive to keep the tariff machine running. Tariff revenues, which exceeded $31 billion per month at their peak last autumn, have already declined substantially.

The result is a curious blend of continuity and retreat.

Compared with the tariff threats that dominated headlines last year, the new rates are lower. Most major economies face either a 10 percent or 12.5 percent surcharge rather than the much steeper penalties previously contemplated. The US administration has also expanded exemptions for a wide range of agricultural commodities, industrial inputs and products that the US either cannot produce domestically or cannot produce in sufficient quantities.

Economic gravity has a habit of asserting itself, sooner or later. For all the rhetoric about reindustrialization, economic reality has imposed constraints. Inflation remains stubbornly uncomfortable for US households. Consumer prices continue to weigh on public sentiment. Manufacturers and farmers have repeatedly warned that tariffs on imported inputs raise production costs. The situation has been further complicated by renewed instability in the Middle East.

The US administration thus finds itself attempting a delicate balancing act. On the one hand, it wants to preserve the tariff barriers that protect select domestic industries. On the other hand, it cannot ignore the political consequences of higher prices. Even the Federal Reserve's recent warning to continue shrinking its balance sheet underscores lingering inflationary concerns.

Against this backdrop, the groundless allegations of "forced labor" made by the Office of the US Trade Representative are merely a "politically correct" pretext for the proposed tariffs to go to congressional debate next month.

Chinese Foreign Ministry spokeswoman Mao Ning reiterated that China opposes all forms of unilateral tariff measures. No one benefits from tariffs or trade wars, and economic disputes should be resolved through dialogue and consultation based on equality, respect and mutual benefit.

She also rightfully rejected allegations of "forced labor" in China and criticized attempts to use the issue as a pretext for political manipulation.

The European Union, Canada and many other trading partners of the US have voiced opposition and concerns regarding both the substance and the justification of the tariff surge. Yet they have been measured rather than alarmed in their responses. That reflects a growing recognition that Washington itself is constrained.

Protracted trade negotiations have taught some US trading partners an important lesson: tariff threats are often as much about domestic politics as international economics. The latest proposals reveal a US administration struggling to reconcile strategic ambitions with economic realities.

The deeper problem for Washington is that tariffs have gradually ceased to function as conventional economic instruments based on market law. They have become political instruments that are difficult to calibrate. Raise them too aggressively and domestic inflation, legal challenges and business opposition intensify. Apply them selectively and their coercive power diminishes. Exemptions proliferate, contradictions multiply and credibility erodes.

Durable economic relationships cannot be built on coercion. Whether the issue is market access, supply chains or labor standards, progress ultimately depends not on tariff walls but on fair competition, candid negotiation and mutually beneficial cooperation.