Farmers pick cotton on a farm on the outskirts of Hami, in China’s Xinjiang Uyghur Autonomous Region, on September 26, 2010. Cotton producing areas have long been the focus of forced labor concerns.
Zhao Jie | Corbis News | Getty Images
Ever since the Supreme Court struck down President Donald Trump’s sweeping global tariff plans, the White House has turned to other avenues to implement the centerpiece of Trump’s trade war policies. One of those new paths became clear last week, when the Office of the U.S. Trade Representative (USTR) proposed new tariffs of up to 12.5% for 59 countries and the European Union under Section 301 of the Trade Act of 1974.
Justification: USTR claims there has been a widespread failure to restrict imports of goods produced with forced labor.
“It is unacceptable that our most important trading partner will not address imports of goods made with forced labor,” Trade Representative Jaymaison Greer said in the X-Post announcing the tariffs. “This creates a power relationship in which American workers are forced to compete globally on an unequal playing field,” he wrote.
Forced labor is a widespread problem worldwide. Forced labor continues throughout global supply chains, despite nearly universally ratified International Labor Organization (ILO) conventions suppressing this practice. According to the latest ILO estimates, 27.6 million men, women and children are victims of this practice every day. Approximately 86% of the labor itself occurs in the private economy, with the remaining 14% coming from state-imposed indentured servitude.
According to the ILO, forced labor, often used in industry, services, agriculture and domestic work, generates around $236 billion in illicit profits worldwide each year. Occupations such as mining, quarrying, manufacturing, and food service generate large amounts of illegal profits, up to $4,944 per victim.
U.S. laws restricting forced labor practices date back nearly a century and are among the strictest in the world. Section 307 of the United States Tariff Act of 1930 completely prohibits forced labor imports. UFLPA restricts imports from China’s Xinjiang Uighur Autonomous Region based on a comprehensive “presumption” of forced labor.
Over time, these domestic standards have come to influence international trade policy, including the most recent North American Free Trade Agreement, the USMCA, and the recent ART, which includes provisions prohibiting the importation of forced labor goods. These agreements are multilateral in nature and are distinctly different from unilateral Section 301 tariffs.
The US struggles to enforce its own forced labor laws
The United States has been the focus of forced labor concerns due to large quantities of goods flowing into countries of questionable origin. A 2025 report from the Homeland Security Operations Analysis Center (HSOAC), which analyzed U.S. import data, found that the U.S. accounts for a disproportionate share of the world’s total direct imports of risk goods (products that the International Labor Office has determined are at high risk of being produced with forced labor). “For example, in 2021, the United States accounted for approximately 23% of imports by value, but only approximately 13% of total global imports,” the report said.
The United States has struggled to effectively enforce its laws regarding forced labor items.
Congress’ recent review of Section 307 does not shy away from mentioning the challenges associated with implementing the law, including “fraud in the import process, expansion of direct-to-consumer sales, and limited access to technologies that enhance supply chain traceability.”
During a 2023 Congressional hearing on federal UFLPA enforcement, Representative Dan Bishop noted that more than a year after the law went into effect, products made with forced labor in Xinjiang are still coming into the United States.
Customs and Border Protection has made extensive efforts to mitigate the entry of forced labor goods into the United States. According to a 2023 CNBC report on supply chain activities, CBP held up $961 million worth of goods at the Ports of New York and New Jersey in less than a year. Edward Fox, assistant port director, said the agency targeted at-risk goods through several internal mechanisms, including reliance on national intelligence information and a “specialized cargo targeting system.”
Importers of goods under CBP surveillance must generally provide conclusive evidence within 30 days of detention that the goods were produced without the use of forced labor. However, this is not a simple process, and millions of dollars worth of cargo can be held by CBP at one time in its custody, disrupting the consistency of product supply and scale of profitability. Companies are often under tremendous financial pressure when trying to demonstrate fair labor practices throughout their procurements, coupled with compounding storage fees and litigation costs.
The globalization of production can make it difficult to track labor throughout the supply chain. For example, a large clothing or automobile manufacturer may source materials for its products from multiple independently operated intermediaries.
“Intermediaries can sell products to large buyers as if they are practicing fair labor practices,” said Desiree Leclercq, an assistant professor at the University of Georgia School of Law, who has expertise in international trade and labor law and is at the forefront of research on Section 301 and its impact.
Mr. Leclerc pointed out that most of the illicit profits associated with the use of forced labor in production come from intermediaries. “The difference between the manufacturing cost and the selling price is taken by the intermediary as profit.”
While this is not the only way to illegally profit from forced labor, it perpetuates and obscures forced labor practices, Leclerc said.
Brandon Daniels, CEO of Exiger, which provides supply chain and third-party risk management and regulatory compliance solutions to more than 150 Fortune 500 companies and more than 60 government agencies, including the U.S. Department of Defense and U.S. Customs and Border Protection, told CNBC earlier this year that many companies are now going directly to suppliers and using their purchasing power to write contracts specifying where materials will be manufactured. “But this only hurts the service on how to monitor forced labor,” he says.
He alleges that Chinese companies used forced labor during the trade war to send cheaper products to second countries at favorable tariff rates, which were then rerouted to the United States and other markets. “This is economic abuse,” Daniels told CNBC.
likely to face legal challenge
Legal experts say imposing unilateral tariffs on 60 countries at once is unprecedented. Past applications of Section 301 have been more nuanced and have been used on a case-by-case basis to target distinct areas of concern in international trade policy. But Trump has increased his use of trade law measures since taking office. Prior to 2017, Section 301 was primarily used as leverage for the United States in international trade disputes. President Trump opened six investigations in his first term, while President Biden opened only three, two of them in his final month in office.
The timeline for this USTR investigation is also under scrutiny. Section 301 investigations typically have a 12-month period after initiation, and a final report is prepared within this period. This round of research was broad in scope, with findings for all 60 countries available within three months.
The timeline is not the only thing raising eyebrows in the investigation. Legal experts also pointed to the fact that the U.S. claims come despite the United States itself facing difficulties in the fight against forced labor.
“I actually felt a little bad for the USTR, because in order to show a violation of Section 301, you had to allege two things,” said Leclerc, who laid out the problems with the USTR tariffs in a post on the International Economic Law and Policy blog last week. “First, we had to make the case that forced labor products are still coming into the United States, because if we can’t say that, we can’t say that our producers are being harmed.[Next]we had to make the case that CBP is doing a very effective job to show that the lack of effectiveness in other countries puts the United States at a disadvantage.”
Troutman Pepper Rock associate Ryan Rust and partner Daniel N. Andziska said in an analysis last week that the government’s initiation of a Section 301 investigation “represents a deliberate effort to establish a permanent, legally defensible foundation for a broad fee structure that is not dependent on emergency powers or Congressional reauthorization.”
The USTR will inevitably seek to rely on the language of the statute itself, which explicitly authorizes the use of tariffs as a retaliatory measure for forced labor practices.
However, while tariffs under Section 301 have a more substantive legal basis than those issued under IEEPA, their validity can be complicated by how they are presented.
“The new legal theory underlying this Section 301 case, particularly the argument that the mere absence of a foreign import ban constitutes an ‘unreasonable’ practice, will likely face judicial challenge,” they wrote.
Asked if these Section 301 tariffs could be challenged in court in the near future, Leclerc said, “It’s guaranteed.”
