U.S. Trade Representative (USTR) has announced findings from 60 Section 301 investigations into countries failing to act against forced labour in trade. Based on these findings, USTR has proposed new tariffs on imports from such economies and is inviting public comments until 6 July on a suggested 12.5% forced labour tariff.
10% Tariff Proposal: This lower rate is suggested for economies that already have partial bans on forced labour imports, reciprocal trade commitments, or limited enforcement regimes.
12.5% Tariff Proposal: This higher rate, which includes India, is proposed for economies that do not meet forced labour benchmarks or lack effective enforcement measures.
Textile Relief Clause: To balance trade impact, capped volumes of apparel and textile imports from certain economies may be allowed at reduced tariff rates, offering limited relief to exporters in these sectors.
This move signals Washington’s tougher stance on forced labour-linked goods and aims to push trading partners to strengthen labour protections. If implemented, these tariffs could reshape supply chains, especially in textiles and consumer goods, while raising compliance pressure on economies like India.
