America
Lt. Col. Palantir and how personal data is being put at the service of the West
Last June, an interesting announcement came from the Pentagon. An Army spokesperson announced that four technology executives would be appointed to the rank of lieutenant colonel and tasked with leading a new Army innovation unit within the Reserve Forces.
Colonel Dave Butler stated that the new unit, named “Detachment 201”(1), was created to bring together technology innovation executives to “help the Army with broader conceptual issues, such as capability management and how to recruit and train tech-focused individuals.”
The companies whose executives were made lieutenant colonels were Palantir, Meta, and OpenAI.
This initial group of executives consists of Palantir Chief Technology Officer Shyam Sankar, Meta Chief Technology Officer Andrew Bosworth, OpenAI Chief Product Officer Kevin Weil, and Bob McGrew, who served as OpenAI’s Vice President of Research until November 2024.
These “generals without an army” align with the Trump administration’s plan to place the Pentagon at the service of Silicon Valley and venture capital (VC). For example, Michael Obadal, appointed by the White House as the Army’s second-highest civilian official, is an employee of Anduril.
Chairman of the Joint Chiefs of Staff General Randy George and Secretary of the Army Dan Driscoll are also focused on giving technology startups and “non-traditional” defense companies a more significant role within the service.
So much so that Driscoll had gone as far as to call it a “success” if a major prime contractor were to close its doors in the coming years because it couldn’t start operating more efficiently.
The Detachment 201 program also aims to help the service adopt commercial technologies like drones and robots and integrate them into its formations by bringing in part-time consultants from the private sector.
According to a report from Task & Purpose, which covers news from the U.S. military and defense industry, the idea of incorporating private-sector expertise originated in Ukraine. There, soldiers who work as engineers or computer scientists during the day produce makeshift drones or 3D-printed parts for use on the front lines against Russia.
The distinction between civilian and military use, civilian and military production, and civilian and military personnel is being erased by the Silicon Valley-Pentagon collaboration. The elimination of this distinction appears consistent with the concept of “total war,” which became widespread with World War I, and with the “ideology of war.”
Of course, becoming a lieutenant colonel is not easy: Spokesperson Butler emphasizes that the four tech executives will receive up to two weeks of online and in-person training at Fort Moore (formerly Fort Benning) in Georgia on “basic soldiering tasks” such as physical fitness, marksmanship, and Army customs and etiquette, rank structure, and uniform wear.
Still, the executives from companies including Palantir began their service with the rank of lieutenant colonel, a rank that most officers reach and hold in the second decade of their military careers. It is also worth remembering that the rank of lieutenant colonel commands battalion-sized units, typically consisting of 300 to 1,000 soldiers. With the correction, of course, that they are no longer generals without an army, but with one…
In 2018, an article published in Bloomberg was titled, “Palantir Knows Everything About You.”
Palantir, whose market value for a time surpassed that of the “big five” [a term often used for the largest US defense contractors] known as traditional arms companies doing business with the Pentagon, was a child of America’s “war on terror” era. Starting as a data-mining company, Palantir provided services to American soldiers in Iraq and Afghanistan as part of mine-sweeping operations.
Founded in 2003 by Peter Thiel and other members of the “PayPal mafia,” the company takes its name from the seeing stones in The Lord of the Rings series. In-Q-Tel, the CIA’s investment/venture capital arm, was its first investor.
The Bloomberg article describes Palantir’s operations as follows:
“The company’s engineers and their products don’t do any spying themselves; they’re more like a spy’s brain, collecting and analyzing information that’s fed in from the hands, eyes, nose, and ears. The software combs through disparate data sources—financial documents, airline reservations, cellphone records, social media postings—and searches for connections that human analysts might miss. It then presents these connections in colorful, easy-to-understand, web-like charts. U.S. spies and special forces loved it immediately, using Palantir to synthesize and sort the blizzard of battlefield intelligence. The software helped planners reroute convoys to avoid roadside bombs, track insurgents for targeting, and even, in a small way, hunt down Osama bin Laden. Military success led to civilian federal contracts. The U.S. Department of Health and Human Services uses Palantir to detect Medicare fraud. The FBI uses it in criminal probes. The Department of Homeland Security uses it to screen air travelers and track immigrants.”
The “civilian” contracts don’t stop there. For instance, we learn from the same article that Palantir has been providing “services” to JPMorgan since 2009, and the scope of this service was to monitor every moment of the bank’s employees. An “insider threat” detection unit employed by the bank, with Palantir’s help, collected emails and browser histories, GPS locations from company-issued smartphones, printer and download activity, and transcripts of digitally recorded phone calls. I quote again from the Bloomberg article:
“Palantir’s software aggregated, searched, sorted, and analyzed these records, surfacing keywords and behavior patterns that [former Secret Service agent Peter] Cavicchia’s team had flagged for potential abuse of corporate assets. For example, Palantir’s algorithm would alert the insider-threat team if an employee began badging into work later than usual, a potential sign of disgruntlement. That would trigger more detailed inquiry and, possibly, physical surveillance by bank security personnel outside of work hours.”
Ironically, this employee surveillance was reportedly halted when it began to extend to monitoring executives as well. Bloomberg, noting that this issue had not been previously reported, expresses surprise: Palantir, one of Silicon Valley’s most valuable startups, and its celebrated intelligence platform designed for the “global war on terror,” had been turned into a weapon against ordinary citizens in the country! (2)
Yet the same report acknowledges that police and sheriff’s departments in New York, New Orleans, Chicago, and Los Angeles also use this system and that individuals “not suspected of committing a crime” are frequently caught in these digital nets.
We learn from Bloomberg: On Palantir’s software screen, people and objects appear in boxes connected by radial lines to other boxes. These lines indicate the relationship between individuals, with labels such as “Colleague,” “Lives with,” “Operator of [cell phone number],” “Owner of [vehicle],” “Brother of,” and even “Lover of.”
If authorities have a photograph, the rest is easy: As early as 2018, law enforcement agencies with access to databases of driver’s license and ID photos could identify more than half of the adult population in the US.
Thus, we are faced with a perfect state-capital collaboration. The partnership of the military, intelligence, finance capital, and police went hand-in-hand with the effort to subjugate all of society, especially workers, at home, and to conduct occupations (“war on terror”) abroad. (3)
In March, President Donald Trump signed a presidential executive order mandating data sharing among federal government agencies.
With the signing of the order, concerns arose about a single repository for the personal data of American citizens. This concern was not unfounded: the most important company with which the Trump administration had significantly strengthened its relationship in recent months was Palantir.
According to government records cited by The New York Times, the company had received more than $113 million in federal spending since Trump took office (let’s recall that the relevant article is dated May 30, 2025).
Moreover, this amount did not include a $795 million contract previously awarded to the company by the Pentagon.
According to six government officials and Palantir employees familiar with the talks, Palantir representatives were also in discussions with at least two other agencies (the Social Security Administration and the Internal Revenue Service) about purchasing its technology.
This initiative led to the adoption of Palantir’s key product, “Foundry,” by at least four federal agencies, including the Department of Homeland Security and the Department of Health and Human Services.
While Foundry serves as a data analysis platform, a product named “Gotham” is designed for security and defense purposes, helping to organize data and draw conclusions from it.
During what the author refers to as the “DOGE era,” Palantir engineers became involved in the work of the Internal Revenue Service (IRS), using Foundry to begin organizing data collected on American taxpayers.
The work began with the goal of creating a single, searchable database for the IRS but later expanded.
It is also noted that Palantir was in negotiations to sign a permanent contract with the IRS. At the time, a Treasury Department representative stated that the IRS was updating its systems to serve American taxpayers and that Palantir was contracted to complete this work alongside IRS engineers.
Palantir also recently began assisting Immigration and Customs Enforcement’s (ICE) enforcement and removal operations team. This work is part of a $30 million contract ICE signed with Palantir in April to create a platform for tracking immigrant movements in real time.
For some reason, the Times article emphasizes the concern that American citizens’ data might fall into Trump’s hands. However, firstly, it doesn’t highlight any concern about this data being in the hands of a private company. And secondly, the article mentions that during the COVID-19 pandemic, the Biden administration signed a contract with Palantir to manage vaccine distribution through the CDC. This contract does not seem to worry the Times.
But let’s return to the executive order. The White House says that with the order, titled “Preventing Waste, Fraud, and Abuse by Eliminating Information Silos,” it aims to take significant steps to remove “unnecessary barriers” to federal employees’ access to government data, promote “inter-agency data sharing,” and “enhance the government’s ability to detect overpayments and fraud while eliminating bureaucratic duplication and inefficiency.”
It’s as if Silicon Valley is speaking, not the White House. The data of American (and perhaps global?) citizens is becoming the property of Palantir under the guise of “reducing bureaucracy.” Along with personal data, the future is also being sold.
During a call with investors last February, Palantir CEO Alex Karp shouted enthusiastically, “We’re doing it! I’m sure you’re enjoying this as much as I am!”
What was this “success” he referred to? As reported by Mother Jones, it seemed to mean enabling the Trump administration to carry out mass deportations and police surveillance domestically, while also helping “the West” globally.
Karp also said on the call that “sometimes” these actions might require “killing”:
“I’m so happy to be on this journey with you. We are succeeding. We have dedicated our company to the West and the U.S., and we are very proud of the role we play, especially in areas we can’t talk about. Palantir exists to disrupt the order. And when necessary, to intimidate and sometimes kill our enemies.” (4)
The ideology of war has become the master key [Turkish: maymuncuk, literally “lockpick”] for Silicon Valley’s wealthy, especially Palantir’s partners Karp and Thiel. Readers curious about Karp and Thiel’s worldview can look here and here. (5) But another reminder about Karp is necessary: according to the report mentioned above, in his letter to shareholders, the Palantir CEO quoted the famous political scientist Samuel P. Huntington, who wrote that Hispanics could not assimilate into American society. In his letter, Karp stated, “The rise of the West was not due to the ‘superiority of its ideas, values, or religion,’ but to ‘its superiority in applying organized violence.'” (6)
Karp praised what the author calls “DOGE’s saw,” saying they were experiencing a revolution and that “some people’s heads rolled.” And CTO Shyam Sankar, whom we should now call Lieutenant Colonel, said, “I think DOGE will bring meritocracy and transparency to government, and that is exactly the purpose of our commercial business.”
Let’s pause for a moment on the issue of meritocracy. Meritocracy, which unites the New Right, libertarianism, and Silicon Valley, appears as a renewed version of “scientific racist” thought. Supported by genetics and “IQ research,” this vision provides a foundation for both anti-immigrant sentiment in the US and the search for an “ethno-economy” (7) that accompanies the “decline of the West” narrative. “Cultures” (some call them “neuro-castes,” but you can understand it as “races”) proven to be of “scientifically” high intelligence should separate themselves from others; instead of the theater of democracy, a meritocratic government should be established where games or politics no longer matter. One source of Thiel’s much-debated thesis that he “no longer believe[s] that freedom and democracy are compatible” is his belief in this kind of meritocracy.
Hostility to DEI [Diversity, Equity, and Inclusion], disgust for the welfare state, and indifference to aid for women/children/the poor all stem from this. This hatred also fuels violent language: Thiel, inspired by Richard Hanania, who wrote a book on the origins of “woke” thought, wrote, “DEI can never be defeated by words—Hanania shows that we need the sticks and stones of state violence to exorcise the demon of diversity.”
Lionel Shriver, author of We Need to Talk About Kevin, which was adapted into a film, captures the very “anxieties” of the Big Tech-Silicon Valley libertarianism led by Palantir in another novel, Mania. She depicts an America where the high-IQ “brain-arrogant” are seen as “brain supremacists,” and “Mental Parity” campaigns lower everyone’s expectations, stigmatizing achievement and excellence.
We will analyze the story of Palantir creating a “Zionist surveillance state” in the next installment. But before we finish, there’s an anecdote that makes you think, “What’s a company without a little theft?”
According to the legend reported by Bloomberg, Thiel’s co-founder Stephen Cohen programmed the first prototype of Palantir’s software in two weeks, but it took years to snatch customers from I2, the long-time leader in the intelligence analytics market.
In an incident not mentioned in the stories of Palantir’s brilliant rise, I2 accused Palantir of misappropriating its intellectual property through a Florida shell company registered to the family of a Palantir executive.
A company claiming to be a private detective agency had licensed I2’s software and development tools and transferred them to Palantir for more than four years.
I2 discovered that this company was registered to the family of Shyam Sankar, Palantir’s director of business development.
The company sued Palantir in federal court for fraud, conspiracy, and copyright infringement.
I’ll conclude with Palantir’s response, an instructive tale about how the imperialist beast operates that leaves no room for interpretation:
“In its legal response, Palantir argued that it had the right to use I2’s code for a greater good. In its motion to dismiss I2’s lawsuit, Palantir stated, ‘What is at stake here is the ability of critical national security, defense, and intelligence agencies to access their own data and to use that data interoperably on the platforms they choose to most effectively protect citizens.’
The motion was denied. Palantir agreed to pay I2 approximately $10 million to settle the case. I2 was sold to IBM in 2011.”
(1) Andrew Bosworth explained on X that “201” refers to an HTTP status code, where a “201” response indicates that a new resource has been successfully created.
(2) As the Palantir software “Metropolis” used by JPMorgan was established and developed, the Wall Street bank made a capital investment in the data-mining company and included it in its Hall of Innovation, while its executives praised Palantir in the press, Bloomberg also writes: Guy Chiarello, JPMorgan’s chief information officer at the time, told Bloomberg Businessweek in a 2011 interview that Metropolis “turns data dumps into gold mines.”
(3) Thiel told Bloomberg in 2011 that civil liberties advocates should support Palantir because data mining was less oppressive than the “crazy abuses and draconian policies” proposed after 9/11. According to him, the best way to prevent another catastrophic attack without turning into a police state was to “give the state the best possible surveillance tools and build in safeguards against their abuse.”
(4) Elsewhere, Karp said, “We built our company to support the West.” To this end, Palantir states that it does not do business with countries it considers adversaries of the US and its allies, namely China and Russia. In the company’s early days, Palantir employees, quoting J.R.R. Tolkien, described their mission as “saving the Shire.”
(5) After Palantir became a public company, it officially announced its move from Palo Alto to Denver, separating itself from Silicon Valley. Karp used his introductory letter to emphasize this point; he harshly criticized what he called the “engineering elite of Silicon Valley,” stated that Palantir was increasingly diverging from the values of the tech sector, and reaffirmed the company’s commitment to working with the U.S. military and defending the West. “We have chosen our side,” he wrote, in a comment implying that Silicon Valley had chosen the “other side.”
(6) According to a long article published in The New York Times in 2020, Karp insisted that Palantir was more in line with U.S. public opinion than Google and other Silicon Valley giants. “We are strengthening Western institutions and, in some cases, making them dominant,” he said, continuing: “This is our narrative. Now, that’s probably not a popular narrative in Silicon Valley. In the rest of America, it’s a very popular narrative. What is Google’s narrative? ‘We’re destroying the media, we’re dividing the country, we’re taking your jobs, we’re getting rich, and by the way, when the country needs you, we’re not there.’ If the Google standard is established, our ability to produce software platforms, the greatest strategic asset America has, will be taken from our warfighters. And that means our enemies will de facto be in a much stronger position.” The article also contains a nice “coincidence”: in a photo showing Karp with Palantir employees Dave Glazer, Sara Peletz, and Mayer Schein, a large portrait of the French philosopher Michel Foucault is seen on the wall.
(7) I use the term “ethno-economics” inspired by Quinn Slobodian’s book Crack-Up Capitalism: Market Radicals and the Dream of a World Without Democracy.
America
US Treasury yield surge signals end of cheap money era as capital demand rises
The relentless rise in US Treasury yields indicates that a significantly higher return is now required to convince investors to lend their capital.
According to Axios, this trend reflects a new global economic reality. Unlike previous bond sell-offs driven by inflation fears, the current environment stems from a world where governments and corporations are scrambling to secure vast sums of capital to finance expanding fiscal deficits, artificial intelligence infrastructure, and other major capital commitments.
This fierce competition for capital is forcing borrowers to offer higher returns. The positive takeaway, according to Axios, is that inflation expectations appear well-anchored, suggesting these developments will not trigger an emergency response from the Federal Reserve.
However, the trend implies that policy benchmark interest rates will need to remain at elevated levels for years to come to maintain economic equilibrium.
Furthermore, this shift significantly complicates fiscal planning in Washington by raising the financing costs of an already expanding national debt.
For prospective home buyers, it signals that mortgage rates are unlikely to decline in the near term.
Even as Treasury yields have climbed, long-term inflation pricing in the bond market has remained virtually unchanged.
The 10-year break-even inflation rate—a market-based metric reflecting future inflation expectations—rose to 2.28% following the renewed escalation of conflict in the Middle East since late June.
Nevertheless, this figure remains below its early May peak of 2.5% and stays within a range fully aligned with the Federal Reserve’s long-term 2% inflation target.
Despite the relatively stable inflation outlook, Treasury yields have continued their upward trajectory. The 10-year yield crossed 4.7% this morning, reaching its highest level since last January.
The surge in real yields is even more pronounced at the longer end of the curve: the yield on 30-year Treasury Inflation-Protected Securities (TIPS) currently stands at 2.97%.
This marks the highest yield recorded for the security since its reintroduction in 2010.
Taken together, these dynamics demonstrate that investors are not merely pricing in higher inflation; rather, they are demanding higher real compensation to commit funds over the long horizon.
For much of the past two decades, bond market movements were driven primarily by inflationary trends and central bank policy interventions.
At present, however, the interest rate environment is being shaped directly by the dynamics of lendable funds: a limited supply set against a seemingly unlimited demand.
During the 2010s, global markets were characterized by an excess of capital chasing a scarce set of productive investment opportunities, maintaining historical lows for the cost of capital.
Today, the situation has reversed. Corporations are embarking on their largest capital expenditure boom in decades while governments run expansive budget deficits—with both competing for the exact same pool of capital.
As Axios notes:
“Consider Alphabet’s announcement to investors last night: the company raised its capital expenditure plans for this year by an additional $15 billion, with Chief Financial Officer Anat Ashkenazi noting that demand for computing capacity ‘still outpaces this investment.’”
If these elevated interest rates persist, the debt servicing costs of the US government will become far less manageable than currently projected.
Estimates published by the Congressional Budget Office (CBO) in February assumed that 10-year Treasury yields would average 4.1% this year and 4.3% over the subsequent few years.
According to CBO projections, every persistent 0.1 percentage point increase in interest rates over the next decade will add $379 billion to the government’s net interest expenses over that period.
Rough calculations suggest that if the recent yield trend persists, taxpayers will face approximately $1.8 trillion in additional interest costs over the coming decade.
There remains a possibility that this movement in the multi-trillion-dollar global bond market represents a temporary summer fluctuation.
However, the persistent spikes in yield rates suggest that a fundamental structural shift is underway across global capital markets.
America
US House panel unanimously passes bill to shield consumers from AI data center energy costs
Amid growing pushback in the US Congress over the rapid expansion of artificial intelligence infrastructure, a bipartisan bill aimed at capping the impact of data centers on residential electricity bills is gaining momentum in the House of Representatives.
The Ratepayer Protection Act mandates that state utility regulators evaluate standards that would shift the burden of electricity costs from individual consumers onto technology companies.
The proposed legislation cleared the House Energy and Commerce Committee in a unanimous 52-0 vote—a result demonstrating that public and political resistance to data center construction has breached party lines.
Designed to codify commitments made by tech executives to the White House earlier this year, the text requires state regulatory bodies to hold formal proceedings on the issue.
The measure mandates the consideration of a standard under which large data centers would be required to absorb the expenses of new power generation or transmission capacity necessitated by their electricity consumption; however, it stops short of compelling states to ultimately adopt those standards.
In a statement following the vote, Representative Brett Guthrie, the Republican chairman of the House Energy and Commerce Committee, said: “When evaluating the industry as a whole, it has become clear that there is only one body capable of standing alongside the families and communities who pay electricity bills—and that is this committee, along with our colleagues in Congress.”
The legislation has also found traction in the upper chamber. Republican Senator Jon Husted introduced a companion measure in the Senate last week. A spokesperson for Husted noted that the senator was pleased with the House committee’s approval and its bipartisan support, adding that he would continue working to pass the bill through the Senate Energy and Natural Resources Committee toward final enactment.
Despite its accelerating legislative pace, whether the measure will ultimately become law remains uncertain.
Matt VanHyfte, a spokesperson for the Republicans on the House Energy and Commerce Committee, noted in an emailed statement that he remains confident the bill will continue its advance following its successful committee passage.
Clara Summers, director of the Consumers for a Better Grid campaign at the Citizens Utility Board, observed that while the bill does not impose direct mandatory standards on states, directive language from Congress serves a useful purpose.
“There are states that have not addressed this issue proactively. Therefore, a signal from Congress stating, ‘You must at least place this topic on your agenda within a specified timeframe,’ represents a constructive incentive,” Summers said.
Summers emphasized that the standards submitted for state evaluation under the bill would hold data centers accountable for generation, transmission, distribution, and other associated costs, though the final determination on whether to act rests entirely with state authorities.
While supporting the measure, several Democrats on the Energy and Commerce Committee characterized the legislation as merely an initial step rather than a comprehensive solution.
Democratic Representative Nannette Barragán noted that while the bill recognizes a critical principle, it falls short of what is required. “We must do more to protect families from soaring electricity costs while simultaneously addressing the attendant health and environmental impacts,” Barragán said.
Data centers—the backbone of artificial intelligence development—are encountering intensifying grassroots resistance as technology firms push to construct new server warehouses and expand their computing power.
Local communities are challenging projects over rising electricity rates, high water consumption, and potential environmental pollution. Certain analysts also link this opposition to broader public anxieties regarding AI, including job displacement.
Public enthusiasm for data center developments, which until last year were widely viewed by both Democrats and Republicans as prime economic investments, is visibly eroding.
According to a survey published by Politico, 41% of Americans now oppose the construction of a data center in their local area, compared to 24% who support it. In January, opposition stood at 28%, with support at 36%.
Democratic Representative Kathy Castor, a co-sponsor of the bill, argued that the legislative package before the committee does not go far enough to resolve the underlying crisis.
Pointing to the Republican majority in the House, Castor said: “I believe the majority must take more decisive action right now to lower household electricity bills. Bipartisan bills are a good first step, but they fall short in this period of energy inflation.”
Castor expressed regret that her own proposal, which would require federal regulators to accelerate the grid interconnection process for new power sources, was not brought up for consideration by the committee.
Nevertheless, Castor commended the bill for sending a clear message to developers: “If a company wants to build a data center, it must pay for the power and grid upgrades it requires.”
Camden Weber, a senior climate and energy policy specialist at the Center for Biological Diversity, told The Hill that congressional focus on affordability was welcome, though incomplete. “It is positive that Congress is addressing pricing issues. We are experiencing an affordability crisis; people are struggling to pay their bills, particularly energy bills. However, concerns surrounding data centers extend well beyond this. There are environmental issues, water scarcity, and air pollution. While this bill appears well-intentioned, it does not go far enough,” Weber said.
Weber further criticized the legislation for establishing an optional framework for states rather than a binding mandate.
Conversely, several lawmakers view this structural flexibility as a primary strength of the text.
Democratic Representative Troy Carter emphasized during the committee markup that the federal government should refrain from overreach. “The key point is that Washington is not dictating terms to Louisiana. This bill does not force state regulatory commissions to adopt a specific rate structure. It establishes a federal standard for state public utility commissions to evaluate, leaving the ultimate implementation strategy to their discretion,” Carter said.
Carter added that local regulators are best positioned to assess the specific requirements of their own jurisdictions.
Responding via email regarding the policy impact of the legislation, Republican committee spokesperson Ben Mullany stated that lawmakers are working in tandem with states and utility providers to ensure grid efficiency.
“The Ratepayer Protection Act sends a strong signal from Congress to the states. States need to examine these massive computing loads and work to ensure that residential customers do not bear the financial burden of generating and transmitting the power required for these data centers,” Mullany said.
The proposed legislation has drawn resistance from the technology sector. The Data Center Coalition, an industry group backed by major tech firms, voiced strong opposition to recent modifications that narrowed the scope of the bill exclusively to data centers.
Josh Levi, president and chief executive officer of the Data Center Coalition, stated that while the organization initially supported the original version and intent of the legislation, the latest revisions were counterproductive.
“The amendments introduced by the Energy and Commerce Committee narrow the scope of the bill to target the data center industry exclusively. This leaves consumers unprotected against the costs associated with substantial load additions driven by other expanding sectors across the United States,” Levi said.
America
US enacts new tariffs on 60 trading partners following legal setback
A new wave of US tariffs targeting 60 trading partners came into effect today (July 24).
The new tariffs replace a global duty introduced earlier this year by President Donald Trump, which was set to expire.
The tariffs range between 10% and 12.5%, impacting major economies such as China, India, and the European Union.
“The US has prohibited the importation of goods produced with forced labor for nearly a century and rigorously enforces that prohibition; it is long past time for our trading partners to do the same,” US Trade Representative Jamieson Greer said.
Greer previously added that the targeted economies account for the majority of US trade.
Following a Supreme Court decision in February that struck down a series of tariffs imposed by the President—delivering a blow to the President’s ability to levy high tariffs at will—the Trump administration moved swiftly to rebuild the President’s “tariff wall.”
After that setback, Trump invoked different legal authorities to reimpose a 10% duty on imports. However, that measure lasted only 150 days and expired today.
The new series of tariffs, initially proposed in June, is now coming into force.
These measures were planned following months of investigation and are considered more resilient to legal challenges compared to previous actions.
According to Thursday’s announcement, a lower rate of 10% will apply to economies that prohibit or commit to prohibiting the import of goods produced using forced labor.
These include Canada, the EU, India, and the United Kingdom.
China, Japan, South Korea, and dozens of other nations have been subjected to a higher tariff rate of 12.5%.
However, the EU, Taiwan, Japan, South Korea, and Switzerland will benefit from certain exemptions under trade agreements previously signed with the US.
The new tariffs were immediately condemned by target countries. Japan stated it found the duties “regrettable,” while the Australian trade minister described them as “unfair.”
Goods already subject to sector-specific tariffs, such as steel and aluminum, will not be affected.
A US official told reporters that specific energy products and fertilizers, as well as goods covered under the US-Mexico-Canada free trade agreement, will also be exempt.
Washington is separately investigating 16 economies over “excess industrial capacity,” inquiries that could lead to additional tariffs.
Experts warn that this could ultimately result in differing rates across countries.
Trade lawyer Greta Peisch told AFP that the Trump administration’s move to implement a baseline tariff while maintaining the threat of additional duties preserves its leverage over trading partners.
Peisch added that this also creates an incentive for countries to comply with previously signed trade agreements.
By taking time for investigations, officials want to ensure that the tariffs imposed are robust in the event of court challenges.
Peisch is a former general counsel at the Office of the US Trade Representative and currently serves as a partner at Wiley Rein.
Josh Lipsky of the Atlantic Council told AFP, “This makes it much more likely that tariffs will remain in place throughout Trump’s term,” pointing to a “much more protectionist global economy” ahead.
Lipsky added that the reimposition of tariffs also increases government revenues.
Former US trade official Ryan Majerus said the Trump administration is seeking options that will allow it to aggressively enforce tariffs.
Majerus noted that, in the long run, Section 301 of the Trade Act of 1974, which Greer invoked to apply the latest tariffs, offers “more flexibility than people realize.”
Majerus, now a partner at King & Spalding, added that once the tariffs are in place, officials can modify them based on new developments.
This latest move comes shortly after a 25% tariff on various Brazilian goods took effect after Washington accused the Latin American giant of unfair trade practices.
This week, Trump also ordered new 50% tariffs on many Canadian products, citing Ottawa’s “discriminatory treatment” of American alcoholic beverages, automobiles, and dairy products.
Lipsky noted that the Canadian tariffs, set to take effect in a month, are based on an untested legal provision, demonstrating that Trump possesses other tools he can rapidly deploy.
This situation indicates that US tariff agreements remain “fragile.”
Nevertheless, the EU, which has signed a trade deal, expects Washington to “abide by the commitments set out in the EU-US Joint Statement.”
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