Donald Trump
Iyunade Grace
The Trump administration has proposed sweeping new tariffs of 10% and 12.5% on imports from 60 economies after concluding they failed to curb trade in goods made with forced labor. The proposal was released late Tuesday by the U.S. Trade Representative’s office as part of a Section 301 unfair trade practices investigation meant to rebuild emergency tariff authority that the U.S. Supreme Court struck down in February. USTR said the measure targets a problem “deeply embedded in global supply chains” and argues that goods produced with forced labor create unfair competition for American workers and companies that follow legal labor practices.
Under the plan, countries would face different rates depending on whether they have laws banning forced-labor imports and how effectively they enforce them. A 10% additional duty would apply to Canada, Ecuador, the European Union, Indonesia, Mexico, Pakistan, Argentina, Bangladesh, Cambodia, El Salvador, Guatemala, Malaysia, Taiwan and Britain. USTR said these economies have some form of prohibition in place or have committed to addressing forced labor as part of U.S. trade agreements, but their enforcement was deemed insufficient. Goods that comply with the US-Mexico-Canada Agreement would be exempted from the Canada and Mexico tariffs.
The higher 12.5% rate would hit the remaining 45 countries investigated, including China, India, Japan, South Korea, Vietnam, Australia, New Zealand, Nigeria, Brazil, Switzerland, Israel, Qatar and Saudi Arabia. USTR classified these 54 economies as jurisdictions that neither imposed nor effectively enforced a prohibition on forced-labor imports. For India specifically, the agency stated it had “failed to establish and enforce a forced labour import prohibition,” a finding that allows Washington to act under Section 301 of the Trade Act of 1974. The economies under review account for 99.4% of total U.S. imports, making the proposal one of the broadest tariff actions in years.
U.S. Trade Representative Jamieson Greer said the failure of key trading partners to address forced-labor imports was “unacceptable” and created “a dynamic where American workers are forced to compete globally on an unlevel playing field.” He argued that goods produced with forced labor enter markets at lower costs, undermining U.S. manufacturers and distorting trade. The investigation, launched March 12, 2026, cited an International Labour Organization estimate that 27.6 million people were engaged in forced labor as of 2021. USTR pointed to products like rice from Myanmar, tobacco from Malawi, and cotton from China as sectors prone to forced labor risks.
The proposal comes as the administration tries to reconstruct Trump’s tariff framework after the Supreme Court invalidated duties imposed under the International Emergency Economic Powers Act. Section 301 is considered a more durable legal tool because it targets “unreasonable” foreign practices that burden U.S. commerce. USTR said the forced-labor tariffs show “the administration is rebuilding the tariff wall, investigation by investigation.” The levies won’t take effect immediately and are subject to a public comment period through July 6, with hearings scheduled to begin July 7.
Trading partners quickly pushed back. A senior EU lawmaker called the findings “utterly absurd,” pointing to a 2024 EU law that bans imports of products made with forced labor. The European Commission said the U.S. tariffs were unjustified and reiterated its commitment to last year’s trade deal with Washington. Human Rights Watch also questioned the approach, noting that “forced labor concerns all countries and is happening in every sector. No one country is completely exempt — including the U.S.” Business leaders warned the move would add confusion for companies already trying to police complex supply chains.
For the UK and EU, the 10% rate would stack on top of existing tariffs and follow intense negotiations that had capped most EU exports at 15% just two weeks earlier. Britain was placed in the lower tier because USTR acknowledged it has plans in place, but said enforcement needed to improve. Canada and Mexico received 10% rates, though USTR emphasized that USMCA-compliant goods would avoid the extra duty. This distinction reflects the administration’s view that existing trade agreements create some safeguards, even if they’re not fully effective on forced labor.
China and India face the steeper 12.5% rate because USTR found they lack effective bans on forced-labor imports. The designation for China aligns with long-standing U.S. concerns about Xinjiang cotton and other sectors, while India’s inclusion surprised some trade analysts given recent efforts to deepen U.S.-India economic ties. Both countries, along with Japan, South Korea and Brazil, are major exporters to the U.S., so the tariffs could reshape supply chains and raise costs for American importers and consumers. USTR also proposed a textile mechanism that would allow a certain volume of apparel imports at a reduced rate, though details were not disclosed.
The forced-labor investigation is one of several Section 301 probes the administration launched to regain tariff leverage. A separate probe into excess industrial capacity in 16 partners could also lead to new duties this summer. The timing is sensitive because markets are already jittery over geopolitical tensions and energy prices. Equities held steady after the announcement, but trade groups said the uncertainty would force companies to re-evaluate sourcing decisions. Pro-tariff groups urged USTR to go further with import licensing and stricter customs enforcement.
If finalized, the tariffs would mark a major escalation in U.S. efforts to link trade policy with labor standards. Greer said “each of our trading partners must do more to ensure that trade does not perversely encourage and entrench forced labor globally.” The proposal sets up months of diplomatic friction with allies and rivals alike, just as the U.S. is negotiating other trade deals. Whether the tariffs survive public comment and potential legal challenges will determine if they become the administration’s next major trade weapon, or another disputed tool in the ongoing debate over how to police forced labor in global commerce.
