The Trump administration is implementing new double-digit tariffs on imports from 60 trading partners, a move that will take effect Friday as temporary levies expire. The tariffs, ranging from 10% to 12.5%, are being imposed on the grounds that these countries have not adequately enforced bans on goods produced by forced labor.
"The United States has had a forced labor import ban for nearly a century, and rigorously enforces it; it’s well past time for our trading partners to do the same," said U.S. Trade Representative Jamieson Greer. The new tariffs leverage Section 301 of the Trade Act of 1974, a provision that allows the president to impose import taxes and sanctions against countries found to engage in unfair trade practices. This section was previously used by the administration to impose tariffs on China.
These new levies replace temporary 10% worldwide tariffs that were enacted under Section 122 of the Trade Act of 1974 after the Supreme Court invalidated earlier tariffs imposed under the International Emergency Economic Powers Act. Those Section 122 tariffs have a 150-day limit, which expires Friday.
The administration initially proposed the forced labor tariffs last month. According to a senior administration official, some countries have since improved their enforcement of forced labor bans and qualified for lower tariff rates. For instance, the tariff on imports from India was initially set at 12.5% but has been reduced to 10%.
Certain products, including oil, gas, and fertilizer, are exempt from the new tariffs. Additionally, products eligible for duty-free status under the USMCA trade agreement are also being spared.
The tariffs have drawn criticism from some lawmakers and trading partners. U.S. Representative Richard Neal, the top Democrat on the House Ways and Means Committee, stated, "Today’s forced labor justification is too convenient to be taken seriously. Forced labor is a real and pervasive problem in our supply chains and demands serious enforcement. It should never be cheapened into a pretext for a tariff policy built on dubious legal theories and personal grievances."
Brazil, which faces a 12.5% tariff, has called the U.S. action "arbitrary and unjustified" and intends to explore retaliatory measures and file a complaint with the World Trade Organization. The Brazilian government contends that the U.S. has "manipulated an issue of great importance to human rights and the struggles of workers worldwide in order to accuse 59 countries and the European Union of unfair practices."
Chile, also facing a 12.5% tariff, has asserted that its robust labor institutions and regulatory framework are inconsistent with the U.S. measure. Paula Estévez, Chile's Undersecretary for International Economic Relations, stated that the application of the tariff is inconsistent with the country's standards and the background presented during the investigation.
Tariffs are paid by U.S. importers and are often passed on to consumers through higher prices. This comes at a time when Americans are already contending with elevated living costs, posing a potential political risk ahead of the midterm elections.
While critics express skepticism about the motivations behind the tariffs, some human rights advocates suggest the levies could be an effective tool in combating forced labor. Martina Vandenberg, founder and president of The Human Trafficking Legal Center, noted that import bans, while not a singular solution, can be a potentially effective tool. However, she and her organization have advocated for a phased approach to implementation to allow countries time to establish enforceable bans.
Kenya Davis, partner at Boies Schiller Flexner, highlighted the Uyghur Forced Labor Prevention Act of 2021 as a significant U.S. law addressing forced labor, particularly concerning goods from China's Xinjiang region. She stated that while the effectiveness of such measures is debatable, they do draw attention to labor trafficking and forced labor issues.
Isabelle Glimcher, a senior research scientist for global labor at NYU Stern Center for Human Rights, pointed out that the tariffs target imported goods rather than domestically produced ones. However, she acknowledged that the threat of these tariffs has prompted several countries, including India, to revise their foreign trade policies to include forced labor import bans. The upcoming European Union forced labor regulations are also seen as a contributing factor.
"Not all of these things are necessarily or wholly attributable to the Section 301 investigations, but does seem like countries are responding and starting to take all of this seriously," Glimcher said.