US cites forced labor concerns as grounds for new tariffs

The Trump administration has proposed new tariffs of up to 12.5% on imports ​from 60 economies after determining they had failed to curb trade in goods made with forced labor, an assertion that was rejected by US trading partners.

The proposal from the US Trade Representative’s ‌office, issued late on Tuesday, comes from a Section 301 unfair trade practices investigation designed to help rebuild US President Donald Trump’s emergency tariffs, struck down by a US Supreme Court decision in February.

Despite laws banning them, the products of forced labor are deeply embedded in supply chains across the world. Business leaders said the US move created more confusion for companies trying to police the sourcing of products.

“Forced labor concerns all countries and is happening in every sector. No one country is completely exempt – including the US,” Helene de Rengerve, a corporate responsibility official at ​Human Rights Watch, told Reuters. “Singling out some countries just based on trade volumes is questionable and may even be counterproductive.”

USTR proposed 10% additional duties on imports from Canada, Ecuador, the European Union, Indonesia, Mexico, Pakistan, Argentina, ​Bangladesh, Cambodia, El Salvador, Guatemala, Malaysia, Taiwan and Britain. The USTR said all had plans or partial schemes in place or had made commitments to address forced labor as part ⁠of US trade agreements.

The trade agency said it would impose additional duties of 12.5% on the remaining 45 countries that it investigated. These include China, India, Nigeria, Japan, South Korea, Vietnam, Australia and New Zealand.

“The failure of our most ​important trading partners to address the importation of goods made with forced labor is unacceptable,” US Trade Representative Jamieson Greer said in a statement. “This creates a dynamic where American workers are forced to compete globally on an unlevel playing field.”

USTR said ​it would accept public comments on the proposed tariffs and other remedies through July 6, with a public hearing scheduled for July 7.

The new tariffs were proposed with numerous exemptions, including for imports that were already subject to US Section 232 national security tariffs, including autos, steel, aluminum and copper products. The tariffs won’t be applied to Canadian and Mexican imports that comply with the North American trade deal rules of origin.

The proposal also lists 76 pages of specific product exemptions, including crude oil and petroleum products, rare earths and other ​specialty metals, beef, coffee, certain fruits and vegetables, pharmaceuticals, organic chemicals and aircraft parts.

Canadian Prime Minister Mark Carney said that Canada shares US objectives in rooting out forced labor but noted that Canadian products were largely protected from ​new duties by the exemptions.

EUROPE SAYS NEW TARIFFS ARE UNJUSTIFIED

The announcement comes ahead of the July 24 expiration of a 10% temporary tariff imposed by the Trump administration on February 20, the day the Supreme Court struck down Trump’s tariffs under the International Emergency ‌Economic Powers Act.

The ⁠European Commission said the tariffs were unjustified and reiterated its commitment to the trade deal sealed with Washington last year.

Bernd Lange, the chair of the European Parliament’s trade committee, which voted on Tuesday to accept that trade deal, said the new tariffs were expected, but said the results of the U.S. investigation were still “utterly absurd” given a 2024 EU law to ban imports of forced labor products.

“The impression is increasingly emerging that a tariff measure is sought first, and only then is a suitable legal justification found,” he said. However, he added that the key question would be whether the additional tariffs would exceed those agreed between both sides last July.

The United States’ largest trading partner, the EU, agreed last July to accept tariffs of ​15% on a broad range of its exports. In its ​report, the USTR said the EU anti-forced labor measures ⁠only come into force in December 2027 and lacked key elements.

“We know there are ups and downs in what people say,” French Finance Minister Roland Lescure told reporters after a cabinet meeting. “But the goal is to ratify the (trade) accord and stick to that.”

However, it was unclear whether the proposed tariffs – which the US release described as “additional duties” – would come on ​top of levies agreed in bilateral deals signed with the U.S.

Britain said it was in regular talks with the United States and was taking action to tackle forced labor. ​It added that the preferential access ⁠to US markets that it had negotiated for UK businesses remained in place.

Taiwan said it was “hopeful and confident” that the final results would reflect agreements already reached, securing relatively preferential treatment.

Beijing, facing 12.5% tariffs, said that it opposed all forms of unilateral tariffs and that there was no forced labor in China. India, confronted with the same rate, said it was engaged with Washington on the Section 301 proceedings, noting the proposed tariffs were not final.

“There will be deep concerns in the international business community that the ⁠US (forced labor law ​could) become a global template,” said Andrew Wilson, deputy secretary general of the International Chamber of Commerce.

“Anyone can make a claim, get a shipment ​impounded and the company has to prove no forced labor in the supply chain.”

He said the long list of exemptions suggested sensitivities over the potential cost-of-living hit to food and other goods with known forced-labor risks.

“It doesn’t make sense if the object of this is to enhance controls on modern slavery,” he ​said.