US plans extra tariffs for 60 countries over forced labor

US Proposes New Tariffs on 60 Countries Citing Forced Labour Concerns

The Trump administration has proposed new tariffs of between 10% and 12.5% on imports from 60 countries, including major partners such as the UK, the EU, Canada, India, Japan and Australia, over concerns that they have not done enough to tackle forced labour. The move follows an investigation launched in March by the US Trade Representative (USTR) under Section 301 of the Trade Act of 1974.

In a report released Wednesday, the USTR said these countries had failed to "impose and effectively enforce a prohibition on the importation of goods produced with forced labor," calling it a "burden" to US commerce. The proposed tariffs, which have not yet been enforced, are subject to public comment and review, with hearings due to begin on July 7.

US Trade Representative Jamieson Greer said: "The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field. We will no longer tolerate this disparity."

The proposal comes after the US Supreme Court in February struck down many of President Donald Trump's earlier tariffs, and analysts see this as an attempt to find a new legal basis for import taxes. Greer had previously promised to "fast-track" such investigations, with a focus on eight areas including forced labour.

Under the plan, 54 countries that have failed to impose a legal prohibition on imports made with forced labour would face a 12.5% tariff. These include China, India, Japan, South Korea, Brazil, Switzerland, Australia and Vietnam. A further six economies — Canada, Ecuador, the EU, Indonesia, Mexico and Pakistan — which have failed to effectively enforce existing prohibitions, would face a 10% tariff.

The USTR also proposed a textile mechanism that would allow a certain volume of clothing and textile imports to enter the US at a reduced tariff rate, although details have not yet been released.

Reactions from trading partners

The proposal has drawn sharp criticism from several affected countries. The EU immediately hit back, saying it expected the US to respect the tariff deal entered into last July and arguing that the new tariffs breached the spirit of that agreement. Bernd Lange, chairman of the European Parliament's trade committee, termed the US findings "utterly absurd," arguing that the EU had already adopted some of the world's strictest rules targeting products made with forced labour.

China's Foreign Ministry said the US findings were a pretext for "political manipulation" and denied allegations that goods made with forced labour are produced in the country.

Australia, which faces a 12.5% tariff, said it maintained that any tariffs on Australian exports to the US were "unjustified" and inconsistent with the Australia-US Free Trade Agreement. A spokesperson for Trade Minister Don Farrell said Australia had "robust, comprehensive and world-leading legislation" addressing forced labour and modern slavery, and would continue to advocate that US tariffs imposed on Australia were "unwarranted." The federal government was seeking urgent clarification from US officials about the proposed sanction.

India has denied the allegations under the forced labour clause and asked the US to end the investigations, saying such matters should be addressed within the framework of ongoing bilateral trade negotiations.

Pakistan, which faces a 10% tariff, has seen exporters express confidence that the additional duties would not hurt its exports. Javed Bilwani, a former president of the Karachi Chamber of Commerce, noted that Pakistani products were already facing 16.5% tax on exports of textile products to the US, and that the additional 10% duty would make them costlier.

Analysts see pressure tactic

Several commentators have described the proposal as a pressure tactic by Washington. An India analyst said the move was designed to drive a harder bargain in trade talks with New Delhi, which had recently seen US Trade Representative officials visit the Indian capital to speed up negotiations on a bilateral agreement. Other analysts said the proposal was simply a way for President Trump to resurrect his trade levy agenda after the Supreme Court rulings.

The listed economies have until July 6 to submit written comments challenging their inclusion, with hearings scheduled to begin the following day before a final decision is reached.