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The Office of the U.S. Trade Representative on June 2 published findings and proposed actions from its Section 301 investigation into forced labor practices in 60 countries. The investigation concluded that none of the countries is doing enough domestically to effectively prevent products made with forced labor from entering their borders.

All Have Fallen Short: USTR found that 54 of the 60 targets do not impose any prohibition on goods made with forced labor and the remaining economies need to better enforce bans in place. In response, USTR recommended 10% tariffs on goods from Argentina, Bangladesh, Canada, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, Indonesia, Malaysia, Mexico, Pakistan, Taiwan, and the United Kingdom; the other 46 economies are targeted for a 12.5% tariff.

Familiar Exemptions: USTR also outlined a list of exempted products similar to those excluded under the invalidated IEEPA tariffs and under the current temporary Section 122 tariffs. These exemptions include:

• USMCA-compliant goods;
• Any product currently subject to a Section 232 tariff;
• Textile and apparel articles that enter duty-free under CAFTA-DR;
• Raw materials that “if subject to the proposed additional tariffs” could lead to unavailability of domestic supply;
• Certain products that cannot be grown or produced at scale domestically or obtained from other sources; and
• Articles for which additional tariffs may not contribute substantially to the elimination of the investigated acts, policies, and practices detailed in the report.

On Dubious Legal Ground? Some analysts assess that the legal standing of the proposed Section 301 duties may be undermined by the similarity of the exceptions given that the authorities invoked (IEEPA, Section 122, and Section 301) have rested on very different justifications (trade deficits, “large and serious balance-of-payments deficits,” and now forced labor, respectively). Others have questioned the oddity of treating nations such as Finland and China—with clearly different records in the area of forced labor—so similarly and criticized the absence of specific and detailed country-by-country analysis.

Arguing Over the Target List: USTR is seeking comments not on the substance of the investigation’s findings but on its proposed coverage list. Comments on what goods to add to or subtract from the list are due July 6, with public hearings slated to begin on July 7.

Rewind: The U.S. Chamber on April 15 joined a group of 16 other associations to submit comments for USTR’s investigation. While denouncing forced labor practices globally, the submission notes that technical assistance, international cooperation and international organization funding will address the systemic causes of forced labor over tariffs. A successive joint submission on the coverage list is under consideration.

For further information, please contact Executive Director for International Policy Isabelle Icso (iicso@uschamber.com).