President Donald Trump’s administration has proposed imposing new tariffs of up to 12.5% on imports from 60 countries after finding they are failing to curb trade in products made with forced labor, an argument rejected by America’s trading partners.
The U.S. Trade Representative’s (USTR) proposal, announced late Tuesday, stems from a Section 301 unfair trade practices investigation aimed at helping President Donald Trump restructure emergency tariffs that were invalidated by a February U.S. Supreme Court ruling.
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Despite being prohibited by law, products of forced labor are deeply integrated into supply chains around the world. European lawmakers have slammed accusations that the region is less effective at curbing trade in such goods than the United States, with one lawmaker describing the U.S. findings as “absolutely ridiculous”. Business leaders said the U.S. measures caused further disruption for businesses.
USTR proposed imposing an additional 10% tariff on imports from Canada, Ecuador, the European Union, Indonesia, Mexico, Pakistan, Argentina, Bangladesh, Cambodia, El Salvador, Guatemala, Malaysia, Taiwan, and the United Kingdom. USTR said all plans or partial plans are being implemented.
The Japan Trade Agency announced that it would impose additional tariffs of 12.5% on the remaining 45 countries targeted for investigation. These include China, India, Nigeria, Japan, South Korea, Vietnam, Australia, and New Zealand.
“It is unacceptable that our most important trading partner is not addressing the importation of goods made with forced labor,” U.S. Trade Representative Jamieson Greer said in a statement. “This creates a power relationship in which American workers are forced to compete globally on an unequal playing field.”
USTR announced it will accept public comments on the proposed tariffs and other relief measures until July 6th, with a public hearing scheduled for July 7th.
The announcement comes ahead of the July 24 expiration of the 10% interim tariffs imposed by the Trump administration on February 20, when the Supreme Court invalidated the Trump administration’s tariffs under the International Emergency Economic Powers Act. It also shows how determined the Trump administration is to build a tariff wall around the world’s largest economy, despite repeated setbacks in the courts.
After losing at the Supreme Court, President Trump turned to another law that would temporarily impose 10% tariffs on the world. However, these stopgap levies expire on July 24th. And a specialized trade court ruled last month that they too were illegal. However, the government can continue collecting while the case is being heard in court.
unfair tariffs
The European Commission called the tariffs unjust and reiterated its commitment to the trade agreement signed with the US government last year.
Bernd Lange, chairman of the European Parliament’s trade committee, which voted to accept the trade deal on Tuesday, said the new tariffs were expected but said the US findings remained “totally irrational” in light of a 2024 EU law banning the import of forced labor products.
“There is an increasing impression that tariff measures will be sought first and only then will an appropriate legal justification be found,” he said. However, he added that the key question is whether the additional tariffs exceed what the two sides agreed on in July last year.
The EU, the United States’ largest trading partner, agreed last July to accept 15% tariffs on a wide range of exports. The USTR said in its report that the EU’s anti-forced labor measures only entered into force in December 2027 and are missing key elements.
It is unclear whether the proposed tariffs, described as “additional duties” in the US release, will be on top of the surcharges agreed to in bilateral agreements with the US.
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 the US market that had been negotiated for British companies would remain in place.
Mexico said products that comply with the United States-Mexico-Canada Agreement (USMCA) will be exempt from the new tariffs.
Taiwan said it was “hopeful and confident” that the final outcome would reflect the agreements already reached and ensure relatively preferential treatment.
The Chinese government, facing a 12.5% tariff, opposes all forms of unilateral tariffs and says there is no forced labor in China. India, which faced the same tax rate, noted that the proposed tariffs were not final and said it was in discussions with the United States on the Section 301 process.
“There is a deep concern in the international business community that the US (forced labor laws) could become a global template,” said Andrew Wilson, deputy executive director of the International Chamber of Commerce.
“Anyone can file a claim and seize cargo, but companies must prove that forced labor is not occurring in their supply chains.”
certain exemptions
The USTR announced it would exempt products from tariffs, including energy, rare earths and certain other metals, beef, coffee, certain fruits and vegetables, pharmaceuticals, organic chemicals, and aircraft parts.
He also said he was proposing a textile mechanism that would allow certain amounts of clothing and textiles to be imported into the United States at reduced tax rates, although he did not provide details.
The ICC’s Wilson said the more than 76-page list of exemptions suggests sensitivity to potential cost-of-living hits for food and other goods with known risks of forced labor.
“If the purpose of this is to tighten control over modern slavery, it makes no sense,” he said.
