US metals groups back forced labor tariffs, split over exemptions and tariff stacking

US metals and mining groups backed proposed Section 301 tariffs aimed at combating forced labor in global supply chains, but split over product exemptions and whether the new duties should stack with existing metals tariffs.

The US Trade Representative in March initiated an investigation into 60 countries for failing to prohibit the import of goods produced with forced labor, a response to the 2025 US Supreme Court decision that voided tariffs Trump imposed under the International Emergency Economic Powers Act. The agency determined that the economies failed to impose and/or enforce forced labor import prohibitions, which is actionable under Section 301 of the Trade Act of 1974.

USTR proposed duties ranging from 10% to 12.5% on the investigated economies.

Metals and mining groups overwhelmingly support USTR's efforts to address forced labor in supply chains. But in comments submitted to the agency, groups disagreed over how the new rates should be enforced.

Metals groups clash over tariff stacking

USTR's proposed duties would exempt products already covered by the Section 232 50% steel and aluminum tariffs. Products considered USMCA-compliant would also be exempt. This means new forced labor duties would not stack on top of existing metals tariffs.

US-based aluminum producer Alcoa, the National Association of Manufacturers, and the Aluminum Association, urged USTR to maintain this current guidance. The groups said layered tariffs create uncertainty and could raise costs.

But some industry groups, like the Council on American Steel Trade, a steel trade group, said any Section 301 measure on steel or steel derivative imports should stack on top of Section 232 tariffs.

The council argued that stronger trade remedies are needed to support domestic producers.

"As the investigated economies have demonstrated the ability to sell through even 50 percent tariffs, stacking any Sec. 301 remedies on top of the existing Sec. 232 tariffs would provide both significant leverage to USTR to address the underlying acts and provide some relief to the domestic steel industry from continued high levels of steel and derivative import," Ben Caryl, the council's president, wrote in comments to USTR.

The Rebar Trade Action Coalition and the Aluminum Extruders Council similarly argued that Section 301 duties should be added to existing Section 232 tariffs. The groups said the current measures have not done enough to curb unfair import competition.

Manufacturers seek input exemptions

Miners and metals producers urged the USTR to add certain equipment, raw materials, and inputs that are unavailable domestically to the current exemption list for new Section 301 duties.

Australia-based mining and metals company South32, the National Mining Association and US rare earths producer MP Materials asked USTR to exempt mining equipment and machinery.

South32 said it needs specialized capital equipment, machinery, components and spare parts that domestic suppliers cannot provide for its multibillion dollar silver-zinc-manganese Hermosa Critical Minerals project.

"Additional duties on these products, which cannot be sourced domestically, would raise the cost of and slow the buildout of a resilient US critical mineral supply chain," South32 wrote to the USTR.

MP Materials said USTR should exempt certain parts used in rare earth and magnet production from any final actions. The rare earths producer pointed to additional tariffs increasing costs and creating operational challenges for US producers.

The aluminum industry requested exemptions for aluminum scrap and smelting raw materials such as aluminum hydroxide, which are critical to US smelters but not produced in sufficient quantities in the US.

Steelmakers seek pig iron exemption

Pig iron, which is not subject to Section 232 tariffs, could face the 10%-12.5% 301 tariffs.

Multiple steel groups, like Nucor and the Steel Manufacturers Association, asked USTR to add pig iron to the exemption list. They said it is a critical input for electric arc furnace steel production without a large domestic supply.

The US imports most of its pig iron from Brazil, which faces a separate Section 301 investigation initiated on June 1.

But US-based steel producer Cleveland-Cliffs supports 301 tariffs on pig iron imports, saying it would encourage domestic production of iron and steel.

Cliffs urged the USTR to stack the 12.5% forced labor tariff on top of USTR's proposed 25% tariff as part of the Brazil investigation.

"This tariff stacking is especially justified in relation to Brazil's pig iron exports due to the well documented links between Brazilian pig iron exports, the charcoal used to produce Brazilian pig iron, and illegal deforestation and forced labor resulting from Brazilian charcoal production," Cliffs wrote.