In short, the US is making it clear that market access is tied to how well you enforce these bans. A fresh Section 301 proposal has India looking at a 12.5% duty. It’s a hard line from the White House to get some alignment on labour issues before the temporary levies run out in July.
India in the crosshairs
The USTR has put India in a list of 54 economies they say have not done enough to stop and police the import of goods made with forced labour. Because of that, India is in the 12.5% column, as opposed to the 10% you see for partners who have at least put a ban in place or put their name to one.
There’s also a separate idea on the table for some textile and apparel imports, where the USTR tends to be more of an inquisitor. The fine print isn’t all in yet, but if there are any extra measures here, it will have an impact on how exporters and retailers do their numbers.
The broader shift in US trade playbook
You can see the strategy in this: after the Supreme Court put an end to some emergency levies back in February, the administration has had to find another way. President Trump is about to put up a tariff wall, but he is using methods he thinks will hold up better, even if they don’t move as fast as the old tools did.
That’s where Section 301 comes in. They’ve been running with a 10% global tax under Section 122 for now, but that’s a stopgap and it’s up in July. USTR Jamieson Greer says they want to wrap up their investigations so they can put the new ones in as the old ones go.
Here is the rundown of what has been put forward so far:
– USTR has made its Section 301 call
– Two rates on the table: 10% and 12.5%
– You have until July 6th to file written comments
– Hearings start the 7th of July
– Some kind of textile mechanism is being mullled over
How the tariff tiers would apply
If you have a prohibition on forced labour imports, or have said you will, the plan is to add 10% to your tab. That applies to places like Canada, the EU, the UK, Mexico and Taiwan.
Then you have the 12.5% for the rest of the major players: China, Japan, South Korea, Brazil, Switzerland and India. The 301 was supposed to be a look at 60 or so economies, and the USTR has found 60 of them to be in violation, with practices they consider an undue burden on US commerce.
Forced labour rationale
The USTR’s position is that if you don’t have a ban, you’re letting in goods that give you an edge and let you work around the rules. They put it in a statement: without a real prohibition, you are distorting the market and making life hard for the businesses that are playing by the book.
Ambassador Greer doesn’t mince words on it. ‘It is unacceptable that our top trading partners won’t deal with the importation of forced-labour goods,’ he said. ‘We have American workers who have to go up against that on an unlevel field. We are done with that.’
Some have made a start, but in Greer’s view, what we’ve seen through the USMCA and other trade pacts is only half a step. Every partner needs to do more to make sure they aren’t propping up forced labour in the world.
What happens next
July 6 is the day for written comments, and a panel should be holding public hearings from the 7th on. Since the probe opened on March 12, they have already put 60 or so witnesses on the stand and put in 500 comments or so, per the notice.
This is a test for the economic partners who have so far held off on any payback and have been more interested in haggling for lower taxes and open markets. As the 301 plays out, we’ll see if the 12.5% figure is enough to make them budge on forced labour or if it just adds to the friction.
