US Imposes Fresh Tariffs on 60 Countries Over Forced Labour, India Rate Cut

The United States has imposed new tariffs on imports from 60 trading partners, citing insufficient action to prevent goods made with forced labour from entering supply chains. The tariffs, ranging from 10 to 12.5 per cent, take effect as an earlier round of temporary levies expires, marking a shift in Washington's trade policy.

The move is authorised under Section 301 of the Trade Act of 1974, a law that allows the president to act against countries deemed to be using unfair trade practices. President Donald Trump used the same law during his first term to impose tariffs on China, which were upheld in court. This legal route is considered more durable than the temporary 10 per cent tariffs imposed under Section 122, which expire after 150 days.

Seventeen economies, including Argentina, Bangladesh, Canada, India, Mexico, and the United Kingdom, face a 10 per cent tariff. The European Union, Taiwan, Japan, South Korea, and Switzerland face rates of 10 to 12.5 per cent on top of existing duties. All other economies under investigation, such as Chile and Brazil, face a 12.5 per cent rate.

India's tariff was originally set at 12.5 per cent but was reduced to 10 per cent after the country tightened its rules on forced labour, according to a senior US administration official.

Exemptions include oil, gas, fertiliser, and goods already duty-free under the US-Mexico-Canada Agreement (USMCA).

The policy has drawn political pushback. United States Trade Representative Jamieson Greer defended the tariffs, stating that it is time for trading partners to adopt similar forced labour import bans. However, Democratic Representative Richard Neal, the top Democrat on the House Ways and Means Committee, argued that the forced labour justification was being used as cover for a tariff plan built on shaky legal ground.

Brazil called the tariffs unfair and said it would consider retaliatory measures and take the case to the World Trade Organization. Chile, also facing a 12.5 per cent rate, stated that its labour protections are already strong and that the US measure does not match its own standards.

The International Labour Organization estimates that approximately 27.6 million people were in forced labour worldwide on any given day in 2021. Human rights groups broadly support import bans as a tool against forced labour, but some caution that countries need time to build effective enforcement systems rather than rules that exist only on paper.

The US Trade Representative's office has also opened a separate inquiry into whether 16 countries, representing 70 per cent of US imports, have flooded markets with cheap goods. That investigation is ongoing, and analysts say more Section 301 tariffs are likely to follow.