USTR Proposes Sweeping Tariffs as Part of Section 301 Forced Labor Import Enforcement Investigation

On June 2, 2026, the U.S. Trade Representative (USTR) announced a landmark set of enforcement actions under Section 301 of the Trade Act of 1974, targeting 60 economies worldwide for failing to prohibit the importation of goods produced with forced labor. This is one of the most sweeping forced labor-related trade enforcement actions in U.S. history. USTR has proposed new tariffs ranging from 10% to 12.5% on all products from these economies. Interested parties may file public comments, due by July 6, and the USTR has scheduled a public hearing on July 7 before final implementation. Companies sourcing from any of the 60 affected economies should assess exposure immediately.

1. What Happened (June 2, 2026)

• USTR made formal findings under Section 301 of the Trade Act of 1974 that 60 trading economies have failed to prohibit or effectively enforce bans on the importation of goods made with forced labor. USTR has proposed retaliatory tariffs and opened a public comment period before final action.
• Investigations were initiated on March 12, 2026. USTR consulted with 46 governments and received nearly 60 witness testimonies and over 450 public comments before issuing today's findings. See ustr.gov.

2. The Findings

• 54 economies were found to have failed to both impose and effectively enforce a forced-labor import prohibition, including major trading partners such as China, Japan, India, South Korea, the EU (as to enforcement), Vietnam, and the United Kingdom. Id.
• Six economies — Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan — were found to have failed to effectively enforce an existing prohibition. Id.

3. Grounds for the "Unreasonable" Finding

• USTR determined the failures are unreasonable because they:
  • Undermine the universal goal of eliminating forced labor globally;
  • Allow firms using forced labor to artificially lower production costs, distorting global market competition;
  • Undermine the profitability of firms that do not use forced labor; and
  • Contribute to the circumvention of U.S. forced-labor import prohibitions (notably in sectors like polysilicon and cotton).

4. Proposed Tariff Remedies

• The 54 economies that have an import prohibition in place or have committed to one through an Agreement on Reciprocal Trade, face a proposed additional duty of 10%.
• The six other economies face a proposed rate of 12.5%. Id.
• A textile mechanism is also proposed, allowing a certain volume of apparel and textile imports to enter the U.S. at a reduced rate, tied to a trading partner's imports of U.S.-produced textile inputs. Id.

5. Key Milestones & Timeline

Date	Milestone
March 12, 2026	USTR self-initiated 60 Section 301 investigations and formally requested consultations with all investigated governments.
March 17, 2026	Federal Register notice published, opening public comment period and soliciting stakeholder input.
April 28–29, 2026	Public hearings convened — nearly 60 witnesses testified; over 450 written comments and rebuttal comments received.
June 2, 2026	USTR issues formal determinations finding all 60 economies actionable; proposes additional tariffs; opens new comment period.
June 22, 2026	DEADLINE: Requests to appear at the July 7 hearing (with testimony summary) must be submitted by this date.
July 6, 2026	DEADLINE: Written comments on proposed tariff actions due.
July 7, 2026	Public hearing on proposed actions at USITC, 500 E Street SW, Washington, DC, beginning at 10:00 a.m.
~July 12, 2026	Post-hearing rebuttal comments due (five days after the last day of hearings).
TBD	Final USTR determination on tariff rates; implementation effective date to be announced.

6. Proposed Exemptions 

USTR has proposed excluding certain categories of goods from the additional duties described above. The specific products eligible for exclusion are identified by their Harmonized Tariff Schedule of the United States (HTSUS) subheadings, which are listed in Annex A to the Federal Register notice. Broadly, the proposed exclusions cover the following categories:

• Articles currently subject to Section 232 tariffs (steel, aluminum, etc.);
• USMCA-compliant goods of Canada and Mexico;
• Textiles and apparel articles that enter duty-free as a good of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, or Nicaragua under CAFTA-DR;
• Raw materials where additional tariffs could cause domestic supply shortages;
• Products that would cause economy-wide disruptions if tariffed;
• Products that cannot be grown or produced in sufficient quantities in the U.S. or obtained from alternative sources;
• Informational materials (e.g., books), charitable donations, and accompanied personal baggage; and
• Articles for which additional tariffs would not substantially contribute to eliminating the investigated practices.

 

Crowell would like to thank Ani Mard for her contribution to this alert.