The Office of the U.S. Trade Representative (USTR) has published a Federal Register notice seeking public comment on proposed additional tariffs under Section 301 related to forced labor concerns. The proposed action follows USTR’s investigation into 60 countries, which found that many trading partners have failed to adequately prohibit or enforce restrictions on imports of goods produced with forced labor.

As a result of these findings, USTR has proposed additional tariffs ranging from 10% to 12.5% on imports from the affected countries. These measures are not yet final and are subject to change based on public feedback.

Proposed Tariff Structure

• 10% Tariff would apply to countries that:
  • Currently enforce forced labor import prohibitions (e.g., Canada, EU, Mexico, Indonesia, Pakistan)
  • Have committed to such prohibitions under trade agreements (e.g., Bangladesh, Cambodia, Malaysia, Taiwan)
  • Maintain partial regimes restricting certain forced labor goods (e.g., United Kingdom)
• 12.5% Tariff would apply to the remaining 44 countries that USTR determined have failed to adequately implement or enforce such prohibitions.

These duties would apply broadly to all products from the affected countries, with limited exclusions outlined in the forthcoming Federal Register notice.

Additional Considerations

• Tariff stacking: These new duties would be imposed on top of existing tariffs, including most favored nation (MFN) rates, current Section 301 tariffs on China, and any other applicable trade actions.
• Textile mechanism: USTR also proposed a potential quota-based mechanism allowing a limited volume of apparel and textiles from certain countries to enter at a reduced tariff rate.

Timeline

• June 22: Deadline to request participation in public hearings
• July 6: Written comments due
• July 7: Public hearings scheduled

This timeline could allow implementation of new tariffs before the expiration of current Section 122 duties on July 24. USTR is also expected to release findings from a separate Section 301 investigation into excess manufacturing capacity involving 16 economies, including China, the EU, Vietnam, India, and Mexico.

We will continue to monitor this closely and provide updates as more information becomes available. If you have questions about how this may affect your imports, please reach out to your Deringer representative or consult your Customs Attorney.