by Section 301 hearing is planned for July 7; deadline for written comments is July 6
WASHINGTON — In what could be a further challenge to the industry’s reliance on global trade, the Trump administration is considering imposing additional tariffs on countries that it believes have not taken steps to reduce forced labor.
Earlier this month, the Office of the United States Trade Representative announced that the initiative potentially impacts some 60 countries that represent 99.4% of goods shipped to the U.S. market.
The USTR report said the following 54 economies “have failed to impose a legal prohibition on the importation of goods produced wholly or in part with forced labor and to effectively enforce such a prohibition”: Algeria; Angola; Argentina; Australia; The Bahamas; Bahrain; Bangladesh; Brazil; Cambodia; Chile; China, People’s Republic of; Colombia; Costa Rica; 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; Türkiye; United Arab Emirates; United Kingdom; Uruguay; Venezuela; and Vietnam.”
It also said the following six economies have failed to effectively enforce a forced labor import prohibition: Canada, Ecuador, the European Union, Indonesia, Mexico and Pakistan.
“For nearly 100 years, the United States has prohibited the importation of goods produced with forced labor under Section 307 of the Tariff Act of 1930 (19 U.S.C. § 1307),” the USTR said in its executive summary. “Although it is universally recognized that forced labor is a practice that should not be tolerated, the use of forced labor across the world continues to persist and has even increased in recent years.”
The USTR went on to define forced labor as “all work or service which is exacted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself voluntarily,” adding, “The existence of forced labor imports in markets across the globe has nurtured an economic system that favors the use of forced labor or forced labor inputs.”
Any additional tariffs on the countries named in the report would be imposed under Section 301 of the Trade Act of 1974.
In an alert to its members on June 12 regarding the issue, logistics services firm CV International noted that 10% tariffs could be imposed on the following countries:
Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, European Union, Guatemala, Indonesia, Malaysia, Mexico, Pakistan, Taiwan and the United Kingdom.
It noted that proposed additional tariffs of 12.5% could be imposed on the following countries:
Algeria, Angola, Australia, The Bahamas, Bahrain, Brazil, Chile, People’s Republic of China, Colombia, Costa Rica, Dominican Republic, Egypt, Guyana, Honduras, Hong Kong-China, India, Iraq, Israel, Japan, Jordan, Kazakhstan, Kuwait, Libya, Morocco, New Zealand, Nicaragua, Nigeria, Norway, Oman, Peru, Philippines, Qatar, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Sri Lanka, Switzerland, Thailand, Trinidad and Tobago, Türkiye, United Arab Emirates, Uruguay, Venezuela, and Vietnam.
Obviously only a handful of countries on this list ship furniture to the U.S. market such as Vietnam, Malaysia, Canada, India, Mexico, Malaysia, India, the European Union and Taiwan.
Regardless, the issue warrants our attention based on the number of people impacted around the world. According to the International Labor Organization, some 27.6 million people around the world — or 3.5 out of every 1,000 people — have been forced to work against their will in the public and private sectors. It goes on to note that 86% of forced labor is believed to occur in the private sector, while the remainder occurs in the public sector.
“The existence of national laws prohibiting forced labor has been insufficient to curb the use of forced labor, including the production of goods with forced labor,” the report notes, adding, “Trade creates incentives for the use of forced labor because goods produced with forced labor generate substantial sales, revenues and profits.”
This is not the U.S. government’s first action relating to forced labor. The Uyghur Forced Labor Prevention Act addresses China’s alleged use of forced labor against Uyghurs and other ethnic minorities in the Xinjiang Uyghur Autonomous Region by prohibiting the importation of goods with materials or components sourced from this part of the world. This can include anything from cotton to wood and metal components
The difference with the current initiative is that it applies not only to China, but also many other countries that allegedly produce products using forced labor. As with other trade-related initiatives it also would collect tariffs from these countries that are paid by importers of record and likely passed along to retailers and consumers. This ultimately feeds more revenues into government coffers at a time when deficit spending continues to rise.
In its alert, CV International notes that “many trade observers believe these measures could replace the current Section 122 tariffs of 10%-15% when those tariffs expire on July 24, 2026,” although it also notes this is based entirely on speculation at this point.
It also notes that the USTR will continue to seek public input on the matter, with a public hearing planned for July 7. The deadline for those wanting to appear at the hearing is June 22, and the deadline for written comments is July 6.
For more information on the investigation and how to submit comments and participate in the hearings, click here. For detailed information on the issue, including a country-by-country analysis explaining why each country is named in the report, click here.
