The Forced-Labour Tariffs

An additional duty of 10 or 12.5 percent on imports from sixty economies, set by whether each has forced-labour import prohibitions in place.

AI evaluation · not yet reviewed by a human

This evaluation was produced and sourced by an AI model; a human review is still pending. Figures and conclusions may still change. The review log is at the foot of the page.How review works →

After the Supreme Court struck down the emergency-powers tariffs in February 2026 and the temporary balance-of-payments surcharge expired in July, the trade representative concluded sixty investigations at once and imposed a two-tier duty. Seventeen economies judged to have forced-labour import prohibitions in place pay an additional 10 percent; thirty-eight others pay 12.5 percent. Together the sixty cover about 99.4 percent of American imports, so the effect is a near-universal tariff with a discount attached to one policy. It took effect on 24 July 2026 and stacks on top of existing duties. This evaluation looks four years ahead and compares it against the tariff position that would otherwise apply, which is the sectoral duties alone.

Balance

Much worse for the future · 0.05 previous scale

Balance on the previous scale. The Bilanz 2.0 simulation is not yet available for this evaluation. The category comes from the share of the debate on the pro side (r).

For 1.7 · 5 % Against 32 · 95 %

Size class: large Scale of this evaluation: Normalised Impact — unitless, calibrated to this topic. For comparison: one point here is worth roughly 5 billion euro per year. The tariff raises roughly 230 billion euro a year from American buyers and hands it to the American Treasury. That is a transfer between two domestic parties, so it is booked once, as the difference between what a euro is worth at each end, rather than twice as a cost and a benefit. Anyone who counts the revenue as a separate gain will get a very different total. How we score →

Arguments for

Arguments against

7 arguments evaluated · Scoring v1.3 Δ absolute −30.3

Arguments — For

3 arguments

Forced labour that leaves the supply chain

1.1of 100

The lower tier is offered to economies that have forced-labour import prohibitions of their own, which is the one part of this measure aimed at the problem it is named after. Seventeen already qualify. Whether the 2.5 point discount is large enough to move the other thirty-eight is the question.

Value 9 · Basic rightsImpact 0.3Plausibility 3.5

▸ Show reasoning & sources ▾ Hide reasoning & sources

The stream is people who are not held in forced labour: not paid, not free to leave, often with documents taken and a debt that never shrinks. This site places that in the class it uses for the constitutional core — below life and health, above the working order of institutions and above money. It is priced as a deprivation of liberty rather than as a loss of wages, because what is taken is the ability to leave rather than an amount of income. That the people concerned are not Americans does not lower the weight; this site prices what a measure does, not who it happens to. The value is high because the stream is liberty, set below life and health because it is recoverable.

About 23.7 million people are in forced labour worldwide, and forced labour generates roughly 236 billion dollars of illegal profit a year ^[4]. Only part of that produces goods that cross borders — most forced labour is in domestic service, construction and agriculture for local markets — and roughly 3.5 million people is used here for the traded share, in a range from 2 to 6 million. The United States takes about 23 percent of the world's at-risk imports by value although it is only 13 percent of global imports, which puts roughly 800,000 of those people in supply chains that end in America ^[5]. What the measure does to that number runs through one narrow channel: a 2.5 percentage point discount for economies that adopt import prohibitions of their own. Five percent of the 800,000 is used here, in a range from half a percent to twenty percent — 40,000 people a year. A year in forced labour is valued at 43,000 euro, the rate American law sets for compensating wrongful imprisonment. The Impact is small against the tariff that carries it, because the discount that does the work is a fifth of the duty and applies to a country's laws rather than to any particular shipment.

▸ Show calculation ▾ Hide calculation

	People in forced labour producing goods that cross borders Setting, range 2 to 6 million: most forced labour is in domestic service, construction and agriculture for local markets [4]	of 23.7 million in forced labour worldwide	3.5 million people
×	Share in supply chains that end in America the United States takes 23 percent of the world's at-risk imports by value although it is 13 percent of global imports [5]	23 %	800,000 people
×	Share the discount frees Setting, range 0.5 to 20 percent: the discount is 2.5 percentage points against a duty of 10 or 12.5, and it applies to a country's laws rather than to any shipment [1]	5 %	40,000 people a year
×	Value of a year of freedom regained the rate American federal law sets for compensating wrongful imprisonment, converted at 1 euro = 1.16 dollars	43,000 euro	1,720 million euro
÷	Normalised Impact scale of this evaluation	5 billion euro a point	0.34

Score 0.34 Impact × 9 Value × 3.5 Plausibility ÷ 10 = 1.1 of 100

Nothing here has been measured, and the design gives reason for doubt in both directions. The counterfactual is the sectoral duties alone, without the sixty-economy action, and no comparable action has ever been taken, so there is no precedent to read. The chain has three links: a discount induces a government to adopt an import prohibition, the prohibition is enforced, and enforcement removes forced labour from production rather than moving it elsewhere. The third link is where the evidence that does exist points against: American customs blocks about 0.8 billion dollars of goods a year on forced-labour suspicion out of imports of 3,300 billion, which suggests that detection is the binding constraint rather than the legal authority ^[5]. The confounder that matters is that the seventeen economies already at the lower tier adopted their prohibitions before this measure and would have kept them anyway, so part of what looks like an effect is a pre-existing state of affairs. Reverse causation does not arise. The Plausibility is low because the chain that carries this argument has three links and none of them has been observed.

evidence basis: Mechanism · P ceiling 6 identification: Mechanistic · rung ceiling 6 band: Chain open · P 3–3.5

Counterfactual: the sectoral duties alone, without the sixty-economy action; no comparable precedent exists. Design: mechanistic — three-link chain (discount → prohibition adopted → forced labour removed rather than displaced), none observed. Confounder: the seventeen economies at the lower tier adopted their prohibitions beforehand and would have kept them; unaddressed. Direction: no reverse causation, the tariff schedule precedes any policy response. Ceiling: mechanistic 6.0 binds. Band: chain open, because the enforcement link carries the whole quantity and the evidence on detection points against it.

The chain is named but the link that carries the quantity — whether an import prohibition actually removes forced labour rather than redirecting the goods — is unchecked, and the fact that customs blocks only 0.8 billion dollars of goods a year out of 3,300 billion suggests detection is the binding constraint. Read back: about a third of the time, the discount frees roughly the number of people assumed here.

Open: Whether any of the thirty-eight economies at the higher tier adopts an import prohibition in the next two years is directly observable, and would settle the first link of the chain on its own.

Factories that stay open

0.4of 100

A tariff raises the price of the imported version and makes the domestic one competitive, which is the oldest argument for one. The 2018 and 2019 American tariffs were studied closely enough to test it. Manufacturing employment fell rather than rose.

Value 6 · OutputImpact 0.3Plausibility 2

▸ Show reasoning & sources ▾ Hide reasoning & sources

The stream is not the jobs themselves — a worker who moves from one industry to another has not made the country poorer — but the cost of the move: months without work, skills that do not transfer, a house in a town where the plant was the employer. This site prices that at the level it uses for economic output and systems. Where the displacement is concentrated in particular places, as manufacturing displacement is, the cost is larger than an average would suggest, because a whole local labour market absorbs it at once. That concentration is a fact about the size of the effect rather than its weight, and it is in the Impact. The value sits in the middle-upper part of the scale, at the level this site uses for economic output.

A duty of nine percentage points on 3,300 billion dollars of imports shifts some demand to domestic producers. If that shift is two percent of import value, it supports something like 250,000 manufacturing positions that would otherwise not exist. Those are not net new jobs — the workers come from somewhere — so what is counted is not the wages but the displacement avoided: workers who would otherwise have gone through the loss of a job in a town with one large employer. Roughly 100,000 people a year are assumed to avoid that, in a range from none to 300,000, and the cost of such a displacement is put at 15,000 euro each, drawn from what the research on American import competition finds about earnings that do not recover. The result is 1.5 billion euro a year. Set against this, and not counted here, is the same effect in reverse for firms that use imported inputs, which the next paragraph explains is what the evidence actually found. The Impact is small even at face value, because what a tariff can protect is a displacement cost rather than a wage bill.

▸ Show calculation ▾ Hide calculation

	American goods imports a year [3]		3,300 billion dollars
×	Share of demand shifting to domestic producers Setting, range 0 to 5 percent: a nine point duty against import demand that responds roughly one for one	2 %	66 billion dollars
=	Workers who avoid a displacement Setting, range 0 to 300,000: the positions are not new jobs, so only the displacement avoided is counted	about 100,000 a year of the 250,000 positions involved	100,000 people a year
×	Cost of a displacement avoided Setting, range 5,000 to 40,000 euro: drawn from what the research on American import competition finds about earnings that do not recover [6]	15,000 euro each	1,500 million euro
÷	Normalised Impact scale of this evaluation	5 billion euro a point	0.3

Score 0.3 Impact × 6 Value × 2 Plausibility ÷ 10 = 0.4 of 100

This is the one claim in the debate that has been tested on American data, and it came out the other way. The 2018 and 2019 tariffs were imposed at different rates on different products at different times, which allows exposed manufacturing industries to be compared against unexposed ones, and the research using that variation found manufacturing employment slightly lower rather than higher in the protected industries ^[6]. The reason it gives is arithmetic: the same tariffs raised the price of imported inputs and drew retaliation against exports, and those two effects were larger than the protection. The confounder that would matter — that exposed industries were declining anyway — is what the product-level comparison absorbs, and reverse causation does not arise, since the tariff schedule was set in Washington rather than by any industry's employment. The reply available to this argument is that the 2018 tariffs were narrow while this one is near-universal, so input costs rise for everyone and the relative protection is what counts. That is a real difference and it is why the figure is not scored at zero. The Plausibility is low because the effect claimed here was looked for in American data under a proper comparison and the opposite was found.

evidence basis: Study · P ceiling 8 identification: Quasi-experimental · rung ceiling 8 band: Effect did not materialise · P 1.5–2

Counterfactual: manufacturing industries not exposed to the 2018-19 tariff schedule. Design: quasi-experimental — product-level variation in tariff exposure over time (Flaaen and Pierce, Federal Reserve 2019 [6]). Confounder: exposed industries declining anyway, absorbed by the product-level comparison. Direction: no reverse causation, the schedule was set in Washington. Ceiling: quasi-experimental 8.0 binds below the studie ceiling of 9.0; the band binds far below it. Band: effect did not materialise — the close twin ran on American data and the employment effect went the other way.

The 2018 and 2019 tariffs were studied with product-level variation and protected industries showed slightly lower manufacturing employment, not higher, because input costs and retaliation outweighed the protection [6]. Read back: roughly one time in five, a tariff of this kind protects about as many positions as assumed here; the rest of the time it does not.

Open: The new duty applies at two rates across sixty economies, which gives usable variation. Comparing employment in industries sourcing mainly from the 10 percent tier against those sourcing from the 12.5 percent tier would settle this within two years.

Less depends on one supplier

0.2of 100

A duty that falls on everyone still falls hardest on whoever supplies most, and it makes a second source worth paying for. What that is worth is the cost of the disruption it prevents, multiplied by how likely the disruption is.

Value 6 · OutputImpact 0.1Plausibility 3.5

▸ Show reasoning & sources ▾ Hide reasoning & sources

The stream is output that continues when a supply route closes: factories that keep running, shelves that stay stocked, hospitals that have the equipment they ordered. It belongs to the class this site uses for economic systems and prosperity. It is not counted at the level of health or security even where the goods are medical, because what is priced is the continuity of supply rather than any particular patient's outcome, and pricing both would count the same disruption twice. What the second source costs to maintain is inside the tariff's own cost and is not counted again here. The value sits in the middle-upper part of the scale, at the level this site uses for economic output.

This is an argument about a rare event, so what is counted is the expected value rather than the event. A serious disruption to a dominant supply route — a blockade, an export ban, a conflict — is put at a two percent chance in any year, in a range from half a percent to five, and the cost if it happened at 200 billion dollars of lost and delayed output. That is an expected four billion dollars a year of exposure. A near-universal duty makes a second source worth paying for and is assumed to cut that exposure by fifteen percent, in a range from five to thirty: 600 million dollars, or 520 million euro a year. The probability sits in the quantity rather than in the Plausibility, which is the treatment this site uses for rare events with large consequences. The Impact is the smallest on the pro side and would be considerably larger for anyone who thinks a disruption more likely than one year in fifty.

▸ Show calculation ▾ Hide calculation

	Cost of a serious disruption to a dominant supply route Setting, range 80 to 400 billion dollars	lost and delayed output	200 billion dollars
×	Chance of it in any year Setting, range 0.5 to 5 percent: the probability belongs in the quantity, not in the Plausibility	2 %	4 billion dollars a year
×	Share of the exposure the duty removes Setting, range 5 to 30 percent: a broad duty makes a second source worth paying for	15 %	0.6 billion dollars a year
÷	In euro	1.16 dollars to the euro	0.52 billion euro
÷	Normalised Impact scale of this evaluation	5 billion euro a point	0.1

Score 0.1 Impact × 6 Value × 3.5 Plausibility ÷ 10 = 0.2 of 100

What is scored here is not whether a disruption happens but whether the reasoning that produces the figure is sound, and there are two weak points. The counterfactual is the same import pattern under the sectoral duties alone, and no measurement exists of how much a broad tariff actually diversifies sourcing rather than simply raising the cost of the same sourcing. The 2018 and 2019 experience is the closest evidence and it is mixed: sourcing did shift away from the most affected origin, but a great deal of it shifted to third countries that assembled the same components, which is a change of address rather than of dependence ^[6]. That counter-mechanism is named and unresolved, and it is what holds this argument down. The confounder is that firms were already diversifying for reasons of their own after 2020, so part of any shift is not attributable to the tariff. Reverse causation does not arise. The Plausibility is low because the link between a broad tariff and genuine diversification has not been shown and the evidence that exists suggests relabelling rather than reshoring.

evidence basis: Mechanism · P ceiling 6 identification: Mechanistic · rung ceiling 6 band: Chain open · P 3–3.5

Counterfactual: the same import pattern under the sectoral duties alone. Design: mechanistic — chain named (broad duty → second source worth paying for → exposure falls), unmeasured. Confounder: firms diversifying anyway after 2020, and third-country assembly of the same components, which changes the address rather than the dependence; both unresolved. Direction: no reverse causation. Expected-value treatment: the probability of a disruption sits in the quantity, not in P. Ceiling: mechanistic 6.0 binds. Band: chain open, because the diversification link carries the quantity and the relabelling counter-mechanism is unanswered.

The chain is named but the link carrying the quantity — whether a broad duty produces genuine diversification rather than third-country assembly of the same components — is unchecked and the 2018-19 experience points toward relabelling. Read back: about a third of the time, a duty of this kind cuts exposure by roughly the share assumed here.

Open: Component-level trade data can distinguish a genuine change of supplier from a change of final assembly point. Two years of it under the new duty would settle whether dependence actually falls.

Arguments — Against

4 arguments · top 3 shown

A tax that takes more from those with less

14of 100

A tariff is collected from importers and paid by whoever buys the goods. Goods are a larger share of a small household budget than of a large one, so the same duty takes a bigger bite lower down. About 230 billion euro a year changes hands.

Value 5 · Household budgetsImpact 4.7Plausibility 6

▸ Show reasoning & sources ▾ Hide reasoning & sources

The stream is money, priced at the middle of the scale. The duty moves it from American buyers to the American Treasury, and because both ends are domestic the transfer is booked once, as the difference between what a euro is worth at each end, rather than twice as a cost to one and a benefit to the other. The whole sum does not appear anywhere in this evaluation, which is deliberate: counting 230 billion euro as a cost and again as revenue would say something false about what the measure does. That the money is collected at the border rather than on a payslip changes nothing about its weight. The value is the middle of the scale, and the regressive shape of the tax is carried entirely by the Impact.

American goods imports run at about 3,300 billion dollars a year ^[3]. The new duty adds a trade-weighted average of roughly nine percentage points over the position that would otherwise apply, in a range from six to twelve, once the sectoral duties already in force are taken out and the lower tier's larger partners are weighted in. Import volumes fall as prices rise, so collections come to about 270 billion dollars, or 233 billion euro at 1.16 dollars to the euro. The money moves from households to the federal budget, and the two ends differ in what a euro is worth there. Goods take about twice as large a share of spending in the bottom fifth of American households as in the top, which puts the buyers' weight at roughly 1.1 against the budget's 1.0. Only that difference of 0.1 is a loss: 23.3 billion euro a year, in a range from 12 to 40. The Impact is the largest in this debate even after netting, because a tenth of a very large number is still a large number.

▸ Show calculation ▾ Hide calculation

	American goods imports a year [3]		3,300 billion dollars
×	Additional duty over the position that would otherwise apply Setting, range 6 to 12 points: trade-weighted across the 10 and 12.5 percent tiers, net of the sectoral duties already in force [1]	9 percentage points	297 billion dollars
×	Collections after import volumes fall import demand responds roughly one for one to a price rise of this size	91 %	270 billion dollars
÷	In euro	1.16 dollars to the euro	233 billion euro
×	Difference in what a euro is worth goods take about twice as large a share of spending in the bottom fifth of American households as in the top; only the difference is a loss, not the whole transfer	1.1 minus 1.0	23.3 billion euro
÷	Normalised Impact scale of this evaluation	5 billion euro a point	4.7

Score 4.7 Impact × 5 Value × 6 Plausibility ÷ 10 = 14 of 100

The mechanism is a matter of statute and arithmetic: a duty is collected at a stated rate on a measured volume. The counterfactual is the tariff position without this action, which is the sectoral duties alone, and both are published schedules. What is estimated is how much of the duty reaches consumers rather than being absorbed by foreign exporters in lower prices, and here the American evidence is unusually clear: studies of the 2018 and 2019 tariffs using product-level variation found the duty passing through almost entirely to American prices, with foreign exporters absorbing close to none of it ^[6]. That is why no absorption is assumed here. The confounder that would matter — that exchange rates move to offset the duty — is real and unresolved, and it would reduce the figure. The regressivity weight is a judgment rather than a measurement, and the range around it is wide for that reason. Reverse causation does not arise. The Plausibility is at the top of what a projection can carry: the duty and the volume are measured and only the weighting is judged.

evidence basis: Study · P ceiling 8 identification: Quasi-experimental · rung ceiling 8

Counterfactual: the tariff position without this action, namely the sectoral duties alone. Design: quasi-experimental for the pass-through link — product-level variation in the 2018-19 tariffs showed near-complete pass-through to American prices [6]; the duty and volume themselves are definitional. Confounder: exchange rate movements offsetting the duty, which would reduce the figure; unresolved. Direction: no reverse causation, the schedule is set in Washington. Ceiling: quasi-experimental 8.0 binds below the studie ceiling of 9.0; P sits below it because the regressivity weight is a judgment. Netting: the transfer is booked once as the weight difference, never as a cost and a benefit.

Trade that simply stops happening

13of 100

Part of a tariff is a transfer and part of it is neither paid nor received: exchanges that were worth making at the old price are not worth making at the new one. Nobody gets that money because it never exists. It is the part economists agree on.

Value 6 · OutputImpact 4Plausibility 5.5

▸ Show reasoning & sources ▾ Hide reasoning & sources

The stream is output that does not happen: goods not made, not shipped, not bought, and the domestic production that replaces some of them at a higher cost than the import it displaces. It belongs to the class this site uses for economic systems and prosperity. It is a genuine loss rather than a transfer, which is what separates it from the argument above — no household gains what the Treasury loses here, because there is nothing to gain. Nothing about who bears it enters, because it falls on producers and consumers on both sides of the border in proportions nobody can trace. The value sits in the middle-upper part of the scale, at the level this site uses for economic output.

Two losses arise and they are conventionally measured the same way. Buyers who stop importing lose the difference between what the goods were worth to them and what they cost, which for a nine point duty on 3,300 billion dollars of imports comes to about 13 billion dollars a year. Domestic producers who step in do so at a higher cost than the import they replace, and that difference is a second loss of similar size. Together 22 billion dollars, or roughly 19 billion euro; 20 billion is used, in a range from 10 to 35, the width reflecting how strongly trade responds to price. The estimate rises more than proportionally with the duty, so a twelve point tariff would cost nearly twice what a nine point one does. What is not counted here is the same effect in reverse — that some of the displaced trade goes to third countries rather than disappearing — which would reduce the figure and is one reason the range runs low. The Impact is second only to the transfer and, unlike the transfer, none of it comes back to anybody.

▸ Show calculation ▾ Hide calculation

	American goods imports a year [3]		3,300 billion dollars
×	Value of the exchanges that stop happening the standard measure of what a tax on an exchange destroys rather than moves	half of 9 percentage points × the 9 percent of imports foregone	13 billion dollars a year
+	Domestic production replacing imports at a higher cost Setting, range 4 to 20 billion: the difference between what the replacement costs and what the import cost	9 billion dollars	22 billion dollars a year
÷	In euro Setting, range 10 to 35 billion euro, set by how strongly trade responds to price	1.16 dollars to the euro	20 billion euro
÷	Normalised Impact scale of this evaluation	5 billion euro a point	4

Score 4 Impact × 6 Value × 5.5 Plausibility ÷ 10 = 13 of 100

This is the least contested proposition in the debate and also one of the least directly measured. That a tax on an exchange reduces the number of exchanges is not in question, and the counterfactual — the same trade without the duty — is what every estimate of the 2018 and 2019 tariffs compared against. Those estimates, using product-level variation in exposure, found import volumes falling sharply and roughly in line with what the standard calculation predicts, which is the support this argument rests on ^[6]. What is not measured is the elasticity at a near-universal duty of this size: every American estimate comes from narrower tariffs, and a broad one behaves differently because substitution toward untaxed origins is not available. That works in both directions — less substitution means less trade diverted and more genuinely lost — and it is why the range is wide. The confounder that would matter is that other things changed in 2018 and 2019, including retaliation, which the product-level comparison partly absorbs. Reverse causation does not arise. The Plausibility is above the middle: the mechanism is settled and the size at this scale of duty has never been observed.

evidence basis: Study · P ceiling 8 identification: Quasi-experimental · rung ceiling 8

Counterfactual: the same trade without the duty. Design: quasi-experimental — product-level variation in the 2018-19 tariff schedule, against which import volume responses were measured [6]. Confounder: retaliation and other 2018-19 shocks, partly absorbed by the product-level comparison. Direction: no reverse causation, the schedule is set in Washington. Ceiling: quasi-experimental 8.0 binds below the studie ceiling of 9.0; a deduction applies because every American estimate comes from narrower tariffs and substitution behaves differently under a near-universal one. The size doubt sits in the 10 to 35 billion euro band.

What sixty economies do back

4.3of 100

A duty on sixty trading partners invites sixty responses. In 2018 and 2019 the retaliation landed mostly on American agriculture and cost billions in lost exports. This action is several times larger and reaches nearly every partner at once.

Value 6 · OutputImpact 1.4Plausibility 5

▸ Show reasoning & sources ▾ Hide reasoning & sources

The stream is American output that finds no buyer: harvests sold below cost or not at all, production lines built for export markets that close, and the towns where those are the employer. It belongs to the class this site uses for economic systems and prosperity, the same as the trade lost in the argument above and for the same reason. What the exporters lose is not counted as a transfer to foreign producers, because the point is the output that is not produced rather than who produces it instead. Federal compensation payments to affected farmers, which followed the last round, are a transfer within the American budget and are not counted here at all. The value sits in the middle-upper part of the scale, at the level this site uses for economic output.

American goods exports run at about 2,100 billion dollars a year. If a fifth of them face retaliatory duties averaging ten percent — which is roughly what the 2018 and 2019 round produced on a much narrower American action — that is 420 billion dollars of exports facing a new barrier. Exporters do not lose all of that: some sell elsewhere, some absorb the duty, some keep the sale. What is lost is the margin on the trade that stops, put at twenty percent of the affected value's own reduction, giving about 8.4 billion dollars, or 7.2 billion euro a year, in a range from 2 to 20 billion. The width is unavoidable because retaliation is a political choice rather than a mechanical response, and because a near-universal American action gives sixty governments the same reason to act at once, which has no precedent. The Impact is a third of the trade destroyed on the import side, which is the ordinary proportion: a country's exports are smaller than its imports and retaliation is usually narrower than what provoked it.

▸ Show calculation ▾ Hide calculation

	American goods exports a year [3]		2,100 billion dollars
×	Share facing retaliatory duties Setting, range 5 to 45 percent: roughly what the 2018 and 2019 round produced on a much narrower American action [6]	20 %	420 billion dollars
×	Margin lost on the trade that stops Setting, range 0.5 to 5 percent: some exporters sell elsewhere, some absorb the duty, some keep the sale	2 %	8.4 billion dollars a year
÷	In euro	1.16 dollars to the euro	7.2 billion euro
÷	Normalised Impact scale of this evaluation	5 billion euro a point	1.4

Score 1.4 Impact × 6 Value × 5 Plausibility ÷ 10 = 4.3 of 100

That tariffs draw retaliation is a matter of record rather than of theory — it happened in 2018, in 2019, and in every comparable episode — so the direction is not the question. The counterfactual is American export performance without this action, and the closest measurement compares American agricultural exports to retaliating and non-retaliating destinations before and after 2018 ^[6]. What that cannot supply is the size here. This action is several times larger, reaches nearly all partners at once, and is framed on a ground — forced labour — that some partners may find harder to retaliate against openly than a straightforward trade dispute. The confounder that matters is that the same partners are negotiating other things with the United States simultaneously, so retaliation is bundled with concessions in ways no model captures. That is unresolved and it is the main reason this figure carries a range of an order of magnitude. Reverse causation does not arise. The Plausibility is at the middle: retaliation is certain in direction and its size here has no precedent to be read from.

evidence basis: Precedent · P ceiling 8 identification: Quasi-experimental · rung ceiling 8

Counterfactual: American export performance to non-retaliating destinations, before and after 2018. Design: quasi-experimental — destination-level comparison of the 2018-19 retaliation [6]. Confounder: simultaneous negotiations bundling retaliation with concessions, which no model captures; unresolved. Direction: no reverse causation, the American schedule preceded the responses. Ceiling: quasi-experimental 8.0 binds below the praezedenz ceiling of 8.5; P sits at 5.0 because the size at this scale has no precedent and the range spans an order of magnitude.

Three legal bases in five months

0.5of 100

The emergency-powers tariffs were struck down in February, replaced within hours by a balance-of-payments surcharge, which expired in July and was replaced by this. About 100 billion dollars has been certified for refund. A firm planning a five-year supply chain has nothing to plan against.

Value 6 · OutputImpact 0.2Plausibility 4

▸ Show reasoning & sources ▾ Hide reasoning & sources

The stream is investment that is postponed or not made: a warehouse not built, a supplier contract not signed, a production line kept in its current location because moving it might be wrong within a year. It belongs to the class this site uses for economic systems and prosperity. What is priced is the output that investment would have produced, not the money itself, which is not destroyed but merely held. Nothing here is a judgment about whether the tariff should exist; a stable tariff and no tariff are both plannable, and it is the changing that costs. The value sits in the middle-upper part of the scale, at the level this site uses for economic output.

American business fixed investment runs at roughly 3,500 billion dollars a year, of which perhaps thirty percent is in activities exposed to trade policy: manufacturing, logistics, wholesale and the supply chains behind them. Research on policy uncertainty finds investment in exposed sectors falling by one to two percent when the rules are unsettled, and one and a half percent is used here, giving about 16 billion dollars of investment deferred each year. What that costs is not the investment but its return, put at eight percent, or 1.26 billion dollars — 1.1 billion euro a year, in a range from 0.3 to 3 billion. Deferred is the right word: most of it is made eventually, which is why the figure is the return on a delay rather than the value of the investment. The 100 billion dollars of tariff refunds working through the system is a transfer rather than a loss and is not counted here ^[3]. The Impact is the smallest in this debate, which is the honest size of a cost that shows up as delay rather than as damage.

▸ Show calculation ▾ Hide calculation

	American business fixed investment a year		3,500 billion dollars
×	Share in trade-exposed activities manufacturing, logistics, wholesale and the supply chains behind them	30 %	1,050 billion dollars
×	Investment deferred while the rules are unsettled Setting, range 0.5 to 3 percent: research on policy uncertainty finds one to two percent in exposed sectors	1.5 %	16 billion dollars
×	Return on a year's delay most of the investment is made eventually, so what is lost is the return on the delay rather than the investment	8 %	1.26 billion dollars a year
÷	In euro	1.16 dollars to the euro	1.1 billion euro
÷	Normalised Impact scale of this evaluation	5 billion euro a point	0.22

Score 0.22 Impact × 6 Value × 4 Plausibility ÷ 10 = 0.5 of 100

That firms defer irreversible commitments when the rules might change is one of the better-established findings in investment economics, and the counterfactual is the same firms under a settled schedule. What has not been measured is this episode. The uncertainty here is unusual in kind: not that the tariff might rise or fall but that its legal basis might be struck down entirely, which happened in February and could happen again to this one. The chain is short — unsettled rules, deferred commitment, output later than it would have been — and every link is visible. The counter-mechanism is real and only partly answered: a firm facing an uncertain tariff may invest sooner rather than later, to secure domestic capacity before the rules tighten, and the net direction across firms has not been established for this case. Reverse causation does not arise. The Plausibility is below the middle: the mechanism is well established in general, unmeasured here, and the direction is not certain across all firms.

evidence basis: Mechanism · P ceiling 6 identification: Mechanistic · rung ceiling 6 band: Chain closed, unevidenced · P 4–5

Counterfactual: the same firms under a settled tariff schedule. Design: mechanistic — chain named (unsettled rules → deferred commitment → output later), with the uncertainty-to-investment relationship carried over from general research rather than measured for this episode. Confounder: firms investing sooner to secure domestic capacity before rules tighten, which reverses the sign for some of them; named and unresolved. Direction: no reverse causation. Ceiling: mechanistic 6.0 binds. Band: chain closed but unevidenced — every link named and the counter-mechanism addressed by the low figure; only the measurement is missing.

Nothing measured argues against the claim; what is absent is any measurement of this episode. The counter-mechanism — firms investing sooner to get ahead of tighter rules — is named and is why the figure sits at the low end. Read back: about half the time, trade-exposed investment is deferred by roughly the amount assumed here.

Open: Capital expenditure guidance from trade-exposed firms, compared across the February and July changes of legal basis, would measure the deferral directly and could carry P to 6.

Summary

This is the most lopsided balance on the English side of the site, and the reason is the mismatch between what the measure does and what it is for. It is a near-universal tariff — sixty economies, 99.4 percent of American imports — and the forced-labour purpose enters only through a 2.5 point discount for countries that pass their own import bans. So the costs are the costs of a general tariff, which are large and well measured: about twenty billion euro a year of trade that simply stops, a regressive shift of a very large transfer, and retaliation from sixty partners at once. The benefit is whatever that discount achieves, and the one thing known about it is that American customs currently blocks 0.8 billion dollars of goods a year on forced-labour grounds out of imports of 3,300 billion, which suggests detection rather than legal authority is what binds. A measure that put the same effort into detection, or that applied the duty only to goods and sectors where forced labour is documented, would appear in this ledger very differently.

Outlook — effect over time

Much worse for the future · 0.05 previous scale

Sources

Global Trade Alert: Forced-Labour Section 301 Tariffs on 60 Economies Take Effect on 24 July: An Overview of the Final Action. globaltradealert.org
Holland & Knight: And the (Tariff) Beat Goes On: New Section 301 Forced-Labor Tariffs Imposed on 60 Countries. hklaw.com
Penn Wharton Budget Model: Effective Tariff Rates and Revenues. budgetmodel.wharton.upenn.edu
International Labour Organization: Profits and Poverty: The Economics of Forced Labour. ilo.org
Walk Free, Global Slavery Index: Importing Risk. walkfree.org
Flaaen and Pierce, Board of Governors of the Federal Reserve System: Disentangling the Effects of the 2018-2019 Tariffs on a Globally Connected U.S. Manufacturing Sector. federalreserve.gov

Last reviewed by Claude Opus 5 · September 6, 2026 · 1× AI, not yet reviewed by a human

September 6, 2026AI reviewClaude Opus 5First evaluation
Created for the English side: the tariff transfer booked once as a weight difference, with the forced-labour purpose priced through the two-tier discount alone.

Evaluations are produced with AI support and reviewed on a schedule for new developments; human passes are marked separately.How we review →