US Plans Additional Tariffs on India, 59 Economies Over Forced Labour Trade Rules

US Proposes Additional Tariffs On India, 59 Other Economies Over Forced Labour Trade Concerns

The United States Trade Representative (USTR) has proposed imposing fresh tariffs on imports from 60 economies, including India, after concluding that they have failed to adequately prohibit or enforce restrictions on goods produced using forced labour.

The proposal follows investigations conducted under Section 301 of the US Trade Act of 1974, which allows Washington to take action against foreign trade practices it considers unfair or harmful to American commerce. The USTR said it found the policies and practices of the affected economies to be “unreasonable” and burdensome to US trade.

The move comes at a crucial time for India and the United States, which are engaged in negotiations to finalise the first phase of a bilateral trade agreement covering tariffs, market access, agriculture and other key sectors.

Proposed Tariffs

According to the USTR, economies that have already adopted, or committed to adopting, restrictions on forced-labour imports through reciprocal trade arrangements could face an additional 10 per cent tariff on exports to the United States.

For the remaining economies, including India, the agency has proposed an additional duty of 12.5 per cent on imports. The tariffs have been proposed and are not yet in force. Public comments will be accepted until July 6, followed by a public hearing on July 7 before any final decision is taken.

Why The US Is Taking Action

USTR Ambassador Jamieson Greer said the failure of major trading partners to address goods produced through forced labour creates unfair competition for American workers and businesses.

According to the agency, products manufactured using forced labour benefit from artificially lower production costs, allowing exporters to gain an unfair advantage in global markets. The USTR has argued that stronger enforcement measures are needed across international supply chains to ensure a level playing field.

The investigations were launched in March and covered 60 major US trading partners that collectively account for more than 99 per cent of US imports. The review included public hearings, witness testimony and hundreds of written submissions.

India Among Countries Named

India is among dozens of economies identified in the USTR findings, alongside countries such as China, Japan, Australia, Israel, Saudi Arabia, Singapore, South Korea, Thailand, Vietnam and the United Kingdom.

The USTR also identified another group of economies, including Canada, the European Union, Mexico, Indonesia and Pakistan, where prohibitions on forced-labour imports exist but are allegedly not being enforced effectively. These countries would face the lower proposed tariff rate of 10 per cent.

Impact On India-US Trade Talks

The proposal could add a fresh layer of complexity to ongoing trade negotiations between New Delhi and Washington. While the tariffs remain under review, any eventual implementation could affect a range of exports and become a key discussion point in bilateral trade talks.

For now, the proposed duties remain subject to consultation and review, leaving room for affected economies, including India, to present their case before the USTR reaches a final decision.