Washington: The United States Trade Representative (USTR) has initiated a series of investigations under Section 301 of the Trade Act of 1974, scrutinizing the actions, policies, and practices of 60 economies that reportedly fail to prohibit or effectively enforce the prohibition on the importation of goods produced with forced labor. These economies include Argentina, Australia, and the European Union, among others.
According to The White House, on June 2, 2026, the USTR determined that the practices of these economies are unreasonable and burden U.S. commerce, making them actionable under Section 301. As a response, the USTR proposed imposing ad valorem tariffs on all goods from these economies, with certain exemptions. The proposed tariffs range from 10 percent to 12.5 percent, depending on the economy's existing commitments and enforcement of forced labor import prohibitions.
The USTR invited public comments and held hearings in July 2026, receiving over 1,600 written comments and testimony from more than 100 witnesses. Based on these inputs, the USTR recommended specific exemptions and the establishment of tariff-rate quotas (TRQs) for certain economies to encourage the importation of U.S. cotton and textile goods, thereby reducing reliance on inputs potentially produced with forced labor.
The memorandum outlines the imposition of a 10 percent tariff on goods from economies like Argentina, Bangladesh, and Malaysia, which have partially enforced prohibitions. For economies like Japan and Korea, tariffs will be adjusted based on Most-Favored Nation (MFN) rates to encourage compliance with trade agreements regarding forced labor.
The USTR also plans to establish TRQs for economies like Bangladesh and Malaysia to facilitate the importation of U.S. textiles, with the aim of implementing these quotas by September 1, 2026. Additionally, amendments to the Harmonized Tariff Schedule of the United States (HTSUS) will be made to reflect these changes.
The memorandum emphasizes the goal of eliminating the practices deemed actionable under Section 301, while also considering potential economic impacts and the efficacy of the proposed tariffs and exemptions. The USTR retains the authority to modify or terminate these measures if necessary, ensuring they remain effective in addressing forced labor concerns.