US launches fresh forced labour tariffs on 60 partners, cuts India rate

President Donald Trump is moving ahead with new tariffs of 10 per cent to 12.5 per cent on imports from 60 trading partners, as temporary worldwide tariffs imposed after a Supreme Court setback are due to expire at 12.01 am Friday. The US says the measures are aimed at countries that have not adequately enforced bans on goods made with forced labour.

The new duties will be imposed under Section 301 of the Trade Act of 1974, a more durable route than the stopgap levies now ending. A senior administration official said some countries have tightened enforcement since the tariffs were first proposed last month and have qualified for lower rates, including India, whose tariff was cut from 12.5 per cent to 10 per cent. The move has drawn criticism from US opponents and foreign governments, even as some human rights advocates say import bans can pressure countries to act on forced labour.

Announcing the move, US Trade Representative Jamieson Greer said, "The United States has had a forced labour import ban for nearly a century, and rigorously enforces it; it's well past time for our trading partners to do the same." The tariffs replace temporary 10 per cent worldwide levies that Trump imposed under Section 122 of the Trade Act of 1974 after the Supreme Court in February struck down his broader tariffs, ruling that the 1977 International Emergency Economic Powers Act did not authorise them. That decision forced the administration to refund importers who had paid those tariffs.

Trump has argued that high tariffs will revive American manufacturing. Last year, he used the emergency powers law to impose double-digit tariffs on imports from almost every country, saying the long-running US trade deficit amounted to a national emergency. With that option blocked, the administration has now turned to Section 301, which allows the president to impose tariffs and other sanctions against countries found to engage in "unjustifiable", "unreasonable" or "discriminatory" trade practices. Trump used Section 301 in his first term to impose major tariffs on China, and those survived court challenges. The US Trade Representative's office has also opened another Section 301 investigation into whether 16 countries, accounting for 70 per cent of US imports, have overproduced goods and depressed prices, but that inquiry is not yet complete.

The administration first proposed the forced labour tariffs last month. According to the senior official, some countries have since tightened forced labour enforcement and qualified for lower tariff rates. The new tariffs will not apply to some products, including oil and gas and fertiliser, and products that qualify for duty-free treatment under the US-Mexico-Canada Agreement are also exempt.

The tariffs were criticised immediately. US Representative Richard Neal of Massachusetts, the top Democrat on the House Ways and Means Committee, said, "Today's forced labour justification is too convenient to be taken seriously. Forced labour 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 per cent tariff, called the US move "arbitrary and unjustified" and said it would trigger its reciprocity law and file a complaint at the World Trade Organization. In a statement, the Brazilian government said the United States "chose to manipulate 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, which also faces a 12.5 per cent rate, said the measure did not reflect its labour standards. Paula Estevez, Chile's undersecretary for international economic relations, said the country has "solid labor institutions, a robust regulatory framework and a firm commitment to the prevention and eradication of forced labour". She added, "The Government of Chile considers that the application of this measure to our country is inconsistent with these standards, as well as with the technical, political, and legal background presented throughout the investigation process."

Tariffs are paid by companies in the United States that import foreign goods, and those importers often try to pass on the cost through higher prices. The administration is therefore taking a risk with the new tariffs at a time when Americans remain unhappy about the cost of living and ahead of the November 3 midterm elections.

Human rights watchers said it is reasonable to be sceptical about the motivation behind the tariffs, but some said the measures could still affect the forced labour problem. The tariffs target countries that the US says either failed to impose or failed to effectively enforce bans on importing goods made with forced labour. The International Labour Organisation defines forced labour as work or service exacted under the menace of a penalty and not offered voluntarily. According to the ILO's latest figures, about 27.6 million people were in forced labour worldwide on any given day in 2021.

Martina Vandenberg, founder and president of The Human Trafficking Legal Centre, said, "We've gone on record for years now advocating for import bans, not as a magic bullet, it's not a silver bullet, but as a potentially effective tool in combating forced labor across the globe." She added, "It's possible to be extremely critical of tariffs, as we are, and to be very concerned about blanket tariffs used as bludgeons against countries. And yet I think it's undeniable that there is a significant response in terms of the adoption of import bans." At the same time, she and her organisation urged a phased rollout. "Our concern is that the import bans will be thin slips of paper with no enforcement," she said. "Countries need time to build import ban mechanisms that are meaningful and enforceable."

Kenya Davis, a partner at Boies Schiller Flexner, said the Uyghur Forced Labour Prevention Act passed in 2021 was the most significant US law on the issue before these tariffs. "The level of effectiveness is certainly up for debate, but it certainly has drawn attention to the issue of labour trafficking and forced labour," she said. "And so, if nothing else, these import bans will serve that function of bringing greater awareness to forced labour." She added that without a "comprehensive approach" that gives transparency on the investigations and helps countries enforce bans, she was "very cautious in my enthusiasm about the tariffs".

Isabelle Glimcher, senior research scientist for global labour at the NYU Stern Center for Human Rights, said one flaw in the tariffs is that they tax countries based on goods they import rather than goods they make at home. But she said the threat of tariffs had already pushed several countries, including India, to change their foreign trade policies to include a forced labour import ban, while European Union rules due next year were also adding pressure. "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," she said. As the temporary worldwide levies expire, the US is now shifting to a new tariff regime tied to forced labour enforcement, while further trade investigations remain under way.

With PTI Inputs

President Donald Trump is moving ahead with new tariffs of 10 per cent to 12.5 per cent on imports from 60 trading partners, as temporary worldwide tariffs imposed after a Supreme Court setback are due to expire at 12.01 am Friday. The US says the measures are aimed at countries that have not adequately enforced bans on goods made with forced labour.

The new duties will be imposed under Section 301 of the Trade Act of 1974, a more durable route than the stopgap levies now ending. A senior administration official said some countries have tightened enforcement since the tariffs were first proposed last month and have qualified for lower rates, including India, whose tariff was cut from 12.5 per cent to 10 per cent. The move has drawn criticism from US opponents and foreign governments, even as some human rights advocates say import bans can pressure countries to act on forced labour.

Announcing the move, US Trade Representative Jamieson Greer said, "The United States has had a forced labour import ban for nearly a century, and rigorously enforces it; it's well past time for our trading partners to do the same." The tariffs replace temporary 10 per cent worldwide levies that Trump imposed under Section 122 of the Trade Act of 1974 after the Supreme Court in February struck down his broader tariffs, ruling that the 1977 International Emergency Economic Powers Act did not authorise them. That decision forced the administration to refund importers who had paid those tariffs.

Trump has argued that high tariffs will revive American manufacturing. Last year, he used the emergency powers law to impose double-digit tariffs on imports from almost every country, saying the long-running US trade deficit amounted to a national emergency. With that option blocked, the administration has now turned to Section 301, which allows the president to impose tariffs and other sanctions against countries found to engage in "unjustifiable", "unreasonable" or "discriminatory" trade practices. Trump used Section 301 in his first term to impose major tariffs on China, and those survived court challenges. The US Trade Representative's office has also opened another Section 301 investigation into whether 16 countries, accounting for 70 per cent of US imports, have overproduced goods and depressed prices, but that inquiry is not yet complete.

The administration first proposed the forced labour tariffs last month. According to the senior official, some countries have since tightened forced labour enforcement and qualified for lower tariff rates. The new tariffs will not apply to some products, including oil and gas and fertiliser, and products that qualify for duty-free treatment under the US-Mexico-Canada Agreement are also exempt.

The tariffs were criticised immediately. US Representative Richard Neal of Massachusetts, the top Democrat on the House Ways and Means Committee, said, "Today's forced labour justification is too convenient to be taken seriously. Forced labour 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 per cent tariff, called the US move "arbitrary and unjustified" and said it would trigger its reciprocity law and file a complaint at the World Trade Organization. In a statement, the Brazilian government said the United States "chose to manipulate 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, which also faces a 12.5 per cent rate, said the measure did not reflect its labour standards. Paula Estevez, Chile's undersecretary for international economic relations, said the country has "solid labor institutions, a robust regulatory framework and a firm commitment to the prevention and eradication of forced labour". She added, "The Government of Chile considers that the application of this measure to our country is inconsistent with these standards, as well as with the technical, political, and legal background presented throughout the investigation process."

Tariffs are paid by companies in the United States that import foreign goods, and those importers often try to pass on the cost through higher prices. The administration is therefore taking a risk with the new tariffs at a time when Americans remain unhappy about the cost of living and ahead of the November 3 midterm elections.

Human rights watchers said it is reasonable to be sceptical about the motivation behind the tariffs, but some said the measures could still affect the forced labour problem. The tariffs target countries that the US says either failed to impose or failed to effectively enforce bans on importing goods made with forced labour. The International Labour Organisation defines forced labour as work or service exacted under the menace of a penalty and not offered voluntarily. According to the ILO's latest figures, about 27.6 million people were in forced labour worldwide on any given day in 2021.

Martina Vandenberg, founder and president of The Human Trafficking Legal Centre, said, "We've gone on record for years now advocating for import bans, not as a magic bullet, it's not a silver bullet, but as a potentially effective tool in combating forced labor across the globe." She added, "It's possible to be extremely critical of tariffs, as we are, and to be very concerned about blanket tariffs used as bludgeons against countries. And yet I think it's undeniable that there is a significant response in terms of the adoption of import bans." At the same time, she and her organisation urged a phased rollout. "Our concern is that the import bans will be thin slips of paper with no enforcement," she said. "Countries need time to build import ban mechanisms that are meaningful and enforceable."

Kenya Davis, a partner at Boies Schiller Flexner, said the Uyghur Forced Labour Prevention Act passed in 2021 was the most significant US law on the issue before these tariffs. "The level of effectiveness is certainly up for debate, but it certainly has drawn attention to the issue of labour trafficking and forced labour," she said. "And so, if nothing else, these import bans will serve that function of bringing greater awareness to forced labour." She added that without a "comprehensive approach" that gives transparency on the investigations and helps countries enforce bans, she was "very cautious in my enthusiasm about the tariffs".

Isabelle Glimcher, senior research scientist for global labour at the NYU Stern Center for Human Rights, said one flaw in the tariffs is that they tax countries based on goods they import rather than goods they make at home. But she said the threat of tariffs had already pushed several countries, including India, to change their foreign trade policies to include a forced labour import ban, while European Union rules due next year were also adding pressure. "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," she said. As the temporary worldwide levies expire, the US is now shifting to a new tariff regime tied to forced labour enforcement, while further trade investigations remain under way.

With PTI Inputs