US imposes tariffs on 60 countries over forced labor practices

The US Trade Representative took final action on July 23 to impose new tariffs on the top 60 US trading partners as part of a Section 301 investigation aimed at combating forced labor in global supply chains.

The tariffs will range from 10% to 12.5%.

The USTR in March initiated an investigation into 60 countries for failing to prohibit the import of goods produced with forced labor. The agency determined that the economies failed to impose and enforce a prohibition on the importation of goods produced with forced labor, which is actionable under Section 301 of the Trade Act of 1974. The new tariffs cover 99.4% of all US trade, according to the administration.

Most metals and minerals, as well as articles subject to section 232 tariffs, including the 50% duties on steel and aluminum, are exempt from the new 301 forced labor tariffs.

The tariffs take effect at 12:01 a.m. ET on July 24, replacing President Donald Trump's temporary 10% global tariffs, which are set to expire at that same time. Trump imposed the temporary duties and launched two Section 301 investigations after the US Supreme Court struck down tariffs Trump imposed under the International Emergency Economic Powers Act.

The Trump administration has pivoted to other trade laws targeting specific products and trading partners as replacements for duties.

The USTR imposed a 10% duty on trading partners that have committed to adopting and enforcing forced labor import prohibitions. Countries that have failed to adopt a prohibition on forced labor imports will face a 12.5% tariff.

Other exemptions include raw materials that could lead to the unavailability of domestic supply, certain products that cannot be produced in sufficient quantities in the US, certain energy products, agricultural products and pharmaceutical goods.

Metals and mining groups supported the USTR's efforts to address forced labor in supply chains in public comments submitted to the agency, but disagreed over product exemptions and whether the new duties should stack with existing tariffs.