TWN Info Service on WTO and Trade Issues (Jul26/20)
28 July 2026
Third World Network

Trade: US imposes "forced-labour" tariffs on 60 countries
Published in SUNS #10490 dated 27 July 2026

Geneva, 24 Jul (D. Ravi Kanth) -- The United States on 23 July imposed tariffs ranging from 10 percent to 12.5 percent on 60 countries under the controversial Section 301 of the US Trade Act of 1974 "for their failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labour", an allegedly unilateral and illegal move that is inconsistent with the World Trade Organization's rules, said people familiar with the development.

Although the US Trade Representative (USTR), Ambassador Jamieson Greer, justified the tariffs, which included "two rounds of public hearings, more than 2,100 public comments, and engagement with our trading partners to remedy these longstanding concerns," the move to impose tariffs on 60 countries appears to violate the WTO rules based on the rulings of dispute settlement panels.

The USTR claimed that "President Trump recognizes that decades of moral suasion have not eradicated forced labor from global supply chains," while "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."

"Today's action will begin to correct what is both a human rights abuse and distortive trade practice to improve the welfare of workers everywhere. I am encouraged by the trading partners who have moved quickly to adopt forced labor import prohibitions, and look forward to ensuring their effective enforcement," said Ambassador Greer.

The 10 percent tariff imposed due to the prevalence of forced labour includes many developing countries such as Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, and Trinidad and Tobago, as well as two industrialized countries: Canada and the United Kingdom.

Further, the "10 percent or 12.5 percent, net of Most-Favored-Nation (MFN) rate is the appropriate rate of Section 301 duties for certain products of the European Union, Taiwan, Japan, Korea, and Switzerland" as well as Brazil, among others.

The 60 countries subjected to US tariffs include Algeria, Angola, Argentina, Australia, the Bahamas, Bahrain, Bangladesh, Brazil, Cambodia, Chile, China, Colombia, Costa Rica, the Dominican Republic, Egypt, El Salvador, Guatemala, Guyana, Honduras, Hong Kong-China, India, Iraq, Israel, Japan, Jordan, Kazakhstan, Kuwait, Libya, Malaysia, Morocco, New Zealand, Nicaragua, Nigeria, Norway, Oman, Peru, the Philippines, Qatar, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Sri Lanka, Switzerland, Taiwan, Thailand, Trinidad and Tobago, Turkiye, the United Arab Emirates, the United Kingdom, Uruguay, Venezuela, and Vietnam.

The forced-labour tariffs appear to demonstrate how the Trump administration is finding one way or the other to replace the reciprocal tariffs imposed under the International Emergency Economic Powers Act (IEEPA) of 1977, which were struck down by the US Supreme Court early this year.

After the Supreme Court dismissed the IEEPA tariffs, which had caused turmoil in the global trading system since April last year, the US resorted to another weapon: imposing a 10 percent tariff under Section 122 of the US Trade Act of 1974, which comes to an end on 24 July.

According to Richard Neal, the ranking Democratic member on the House Ways and Means Committee: "With his global tariffs expiring tonight, Trump is once again flipping through the statute books looking for any authority to keep them in place. Today's forced labor justification is too convenient to be taken seriously."

Early this week, President Trump threatened to impose 50 percent tariffs on goods entering from Canada, the largest trading neighbour of the US, and in a separate move, the US targeted Brazil with a 25 percent tariff.

However, a senior US official said that the forced-labour tariffs would "restore fairness in the global market for American workers" and prompt US trading partners to "join the United States in eliminating forced labour from global supply chains," according to a report in the Financial Times on 24 July.

Further, according to a USTR fact sheet, several energy items such as oil, gas, and fertilizers, as well as goods that are not produced in the US, are being exempted from the long list of products that will be subjected to new forced-labour tariffs.

Several countries, including Japan, Australia, and Singapore, among others, have somewhat politely expressed that the tariffs are "unjustified" and not in accordance with international trade rules.

While countries appear to be increasingly unhappy with the changing face of the allegedly arbitrary, unilateral, and illegal tariffs imposed by the Trump administration, they seem to have failed in mounting a common challenge by invoking a trade dispute at the WTO or outside it, said people familiar with the development.

Notably, the move to impose tariffs based on the alleged failure of countries to comply with the International Labour Organization (ILO)'s Forced Labour Convention appears to violate multilateral trade rules, as trade and labour obligations are not part of the WTO's rulebook, according to people familiar with the development.

Interestingly, the US has ratified only two of the ILO's core labour standards - on forced labour and child labour - while leaving unratified several other conventions, including those on freedom of association, the right to organize and collective bargaining, the minimum age of employment, equal remuneration, and discrimination in employment and occupation.

Moreover, attempts to incorporate trade and labour provisions into the WTO's rulebook failed at the WTO's third ministerial conference in Seattle in December 1999.

The latest US announcement comes just before the Section 122 tariffs of 15 percent imposed by the US on a large swath of countries are due to expire on 24 July, owing to the 150-day statutory limit under the US Trade Act of 1974.

Although the issue of forced labour was repeatedly raised by the US during the fisheries subsidies negotiations in the run-up to the WTO's 12th ministerial conference (MC12) in Geneva in June 2022 - allegedly to target China - the proposal to include this issue was not agreed to, said people familiar with the development.

More importantly, while a WTO dispute panel did not rule outright against Section 301 in a trade dispute brought by the European Communities back in 1999, it clearly stated: "Significantly, all these conclusions are based in full or in part on the US Administration's undertakings mentioned above. It thus follows that should they be repudiated or in any other way removed by the US Administration or another branch of the US Government, the findings of conformity contained in these conclusions would no longer be warranted."

However, another panel in a dispute between the US and China ruled against Section 301, but the US voided the findings of the panel by appealing to the defunct Appellate Body. +