The ongoing tariff wars, particularly between the United States and China, are significantly reshaping global migration patterns and increasing the risk of human rights abuses within supply chains. Since April 2018, when former US President Donald Trump announced plans for sweeping tariffs, uncertainty has permeated international trade, leading to a reconfiguration of supply chains as countries vie for economic dominance.
As the US seeks to bolster its manufacturing sector through initiatives like “Made in America,” many companies are opting to restructure their supply chains rather than simply reshoring production. This includes strategies like “China +1,” where businesses maintain some operations in China while expanding to countries such as Vietnam, Indonesia, and Mexico. These shifts are not just about economics but also have profound implications for labor migration and human rights.
Global Supply Chain Shifts and Migration Dynamics
The changes in supply chains are generating new corridors for investment and labor. For instance, Mexico is becoming increasingly attractive due to its proximity to the US, lower labor costs, and comparatively lower tariffs on goods produced there. This influx of investment is driving up demand for labor, yet Mexico’s domestic workforce is not sufficient to meet this demand. Consequently, Mexico is transitioning from a country primarily known for emigration to one that is experiencing increased immigration.
This phenomenon is part of a broader trend known as “replacement migration,” where labor migration flows from lower-income countries to middle-income economies. Workers from nations with fewer resources are filling roles in middle-income countries, which are in turn sourcing labor from even poorer nations. This cascade pattern creates complex challenges, including heightened vulnerability for migrant workers.
Human Rights Risks in Supply Chains
As companies increasingly rely on migrant labor, the risk of human rights abuses rises. The systems used by multinationals to manage migrant workers often involve intricate recruitment networks. In many instances, visa programs necessitate that workers are hired while still in their home countries. In fact, up to 80% of legal, international lower-skilled hires are arranged by labor agencies, which can expose workers to significant risks.
Many of these recruitment agencies operate by charging hefty fees for job placements, leading to exploitation. There have been numerous cases of corruption, including passport confiscation and misleading contracts that offer poorer terms upon arrival. According to research conducted by the risk-management platform EiQ, over 850 major violations, such as unlawful salary deductions and unreturned recruitment fees, have been documented.
Kevin Franklin, CEO of EiQ, noted, “There are no longer any ‘safe’ or ‘easy’, cost-effective options for supply chain sourcing. We have entered an era of intense and nuanced trade-offs.” For example, moving operations from China to India may increase the risk of forced and child labor, while production in Bangladesh raises significant health and safety concerns.
The situation in the US is equally alarming. The country has shifted from a medium to a high-risk category for worker rights, driven by the demand for labor amid strict immigration policies. The push for a more self-sufficient economy has led to mass deportations, exacerbating labor shortages and increasing the vulnerability of remaining workers.
Tighter immigration policies create an environment of fear, deterring migrant workers from reporting abuses or seeking legal support. Audits by EiQ have revealed troubling findings, including forced overtime, severe workplace injuries, and even amputations due to unsafe working conditions.
The Impact of Tariff Wars on Global Trade
As global trade continues to evolve, it is imperative for businesses to adapt to this complex landscape. Companies must utilize evidence-based insights to understand and manage risks associated with their supply chains. This includes mapping risks, employing artificial intelligence to assess potential trade-offs, and engaging in training programs for suppliers.
When issues arise, businesses should formulate action plans that include compensation for affected migrant workers to address the human cost of these shifts. As the dynamics of migration and trade change, the stakes for human rights and ethical labor practices have never been higher.
The growing interconnectedness of global economies means that the repercussions of tariff wars extend far beyond financial metrics, impacting the lives of workers worldwide.
