Fox Rothschild | US Trade Representative Proposes Tariffs on All 60 Economies in Forced Labor Import Ban Investigations

Key Points

• USTR has proposed additional Section 301 tariffs of 10 – 12.5% on imports from all 60 economies under investigation for failing to impose and/or enforce forced labor import bans, affecting nearly all U.S. import trade by value.
• Companies with global supply chains should immediately model the cost impact of these proposed tariffs across their sourcing footprint and evaluate whether their products may qualify for limited exemptions, including those for Section 232 goods, certain raw materials, and products posing economy-wide disruption risks.
• Written comments to USTR are due July 6, 2026, and hearing requests are due June 22, 2026 — importers, trade associations, and industry coalitions should act quickly to advocate for product-specific exclusions or sector relief, as prior Section 301 proceedings have granted exemptions based on public submissions.

Recent findings by the U.S. Trade Representative (USTR) could lead to additional duties of between 10–12.5% on many imported goods.

As we reported in March, the USTR initiated Section 301 investigations into 60 economies covering 99.40% of U.S. imports by value. On June 2, 2026, USTR released its formal determinations and proposed remedies. USTR found that 54 economies have failed to impose and effectively enforce a forced labor import prohibition, while six economies — Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan — have failed to effectively enforce an existing prohibition. USTR concluded that each economy’s failure is “unreasonable” within the meaning of Section 301 of the Trade Act of 1974 (Section 301) because it, among other things, undermines efforts to eliminate forced labor, permits firms to gain an artificial cost advantage, and contributes to circumvention of existing U.S. import bans.

Businesses that would be affected by these potential new tariffs should act now to assess their impact across their supply chains and consider preparing testimony and/or written comments to influence their implementation.

Businesses that would be affected by these potential new tariffs should act now to assess their impact across their supply chains and consider preparing testimony and/or written comments to influence their implementation.

What is the Proposed Action on Tariffs?

USTR proposes to impose additional Section 301 tariffs on all products from the 60 economies, with limited exemptions, including for goods subject to Section 232 tariffs, certain raw materials, informational materials (e.g., books), and products that could cause economy-wide disruptions. Economies that have enacted forced labor import prohibitions or undertaken commitments through Agreements on Reciprocal Trade would face a 10% additional duty, while all other economies would face 12.5% duties. These tariffs would be in addition to any existing duties under other trade laws. USTR also proposes a textile mechanism allowing a certain volume of apparel and textile imports to enter at a reduced rate.

What Steps Should Businesses Take Now?

These proposed tariffs carry important implications for multinational corporations, chambers of commerce, U.S. importers and other employer groups with global supply chains. Companies should model the cost impact of an additional 10 –12.5% duty layer across their sourcing footprint. Trade associations and industry coalitions should consider coordinating submissions to USTR highlighting sector-specific impacts — particularly where tariffs on inputs and finished goods could raise costs without meaningfully advancing forced labor enforcement.

USTR has solicited comments and requests to appear at hearings on the matter, as follows:

• Requests to appear at hearings are due June 22, 2026.
• Written comments must be submitted by July 6, 2026.
• Hearings will begin July 7, 2026.

USTR specifically invites comments on several areas, including:

• The particular products to be subject to duties.
• Whether the proposed exemptions are appropriate.
• The level of the duty rate.
• Whether different rates should apply to an economy that has made a commitment to the United States to impose and enforce a forced labor import ban, has actually imposed such a ban, or has imposed a partial regime with the effect of preventing the import of certain forced labor goods.
• Features of the proposed textile mechanism, including whether a similar mechanism should apply to any other product or sector.

In previous Section 301 investigations, the USTR has exempted certain products from proposed tariffs based upon parties’ written comments and testimony showing the strategic importance of those products or industries to U.S. interests. Given the potential long-term effect of Section 301 tariffs, interested parties should strongly consider using this opportunity to advocate for their interests.

Compliments of Fox Rothschild – a member of the EACCNY