The Intersection of Forced Labour and Tariffs
Trade and economic sanctions have long felt like a lifeline to labour advocates. The International Labour Organization supervises international labour standards, but lacks the economic incentives to discourage countries from growing their economies on the backs of workers. The World Trade Organization, when it’s functioning, monitors and approves the use of economic tools to shape policies that affect workers, but its Members have long refused to adopt a mandate regulating international labour standards. Without an international forum to debate and develop intersecting trade and labour policies, economies have experimented with various instruments, from preference programmes for developing countries coupled with mandatory labour standards, to so-called free trade agreements with binding labour clauses, to, most recently, tariffs.
This post examines the latter initiative. On June 2, 2026, the Office of the U.S. Trade Representative (USTR) released its report on its Section 301 Investigation into acts, policies, and practices of various economies related to the failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labour. But what role do tariffs have to play in eradicating forced labour in global supply chains? Will this initiative drive positive changes for workers, or will it be struck down by the U.S. courts as yet another illegitimate tariff scheme imposed by a President who seems hell-bent on punishing economies for failing to buy sufficient quantities of U.S. goods? Finally, assuming President Trump cares nothing about forced labour in the supply chains, might the Section 301 tariffs nevertheless drive positive changes in countries willing to play along?
What are tariffs?
The first question a blog for a non-trade audience needs to address is what tariffs mean, especially given the incorrect rhetoric swirling around the term in policy discussions. Put simply, a tariff imposed by the U.S. government is a tax the U.S. buyer pays to customs when goods clear the border. Despite what policymakers would have us believe, foreign governments or sellers do not pay tariffs.
The Trump administration has used various legislative authorities to impose tariffs on countries it claims have a trade deficit with the United States. While trade and economic researchers contest that argument, its core thesis is that U.S. trade partners export more goods to the United States than they import. Doing so purportedly causes an unfair advantage to those countries, which are selling more than they are buying, and a disadvantage to the United States. Imposing tariffs on imports to deter U.S. consumers from purchasing outside of the United States is a central pillar of the administration’s America First Trade Policy.
Why tariffs?
Before turning to the forced-labour initiatives, I want to step back and explain how we got here.
From the start of the second Trump administration, the U.S. government has rolled out a series of tariffs, including but not limited to 25 percent tariffs on imports of steel and aluminum (as well as derivatives) from all countries, and 25 percent tariffs on automobiles and certain automobile parts outside the United States-Canada-Mexico Agreement (USMCA).
As these initiatives percolated, the administration issued an executive order under the National Emergencies Act and International Emergency Economic Powers Act (IEEPA) based on its finding, referenced above, that “underlying conditions, including a lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers, and U.S. trading partners’ economic policies that suppress domestic wages and consumption, as indicated by large and persistent annual U.S. goods trade deficits, constitute an unusual and extraordinary threat to the national security and economy of the United States.” Under IEEPA, the Trump Administration imposed a minimum of 10 percent tariff on nearly all goods imported into the United States, beginning in April of 2025. The rates increased for goods from dozens of countries, up to 49 percent for products imported from Cambodia.
In June of that year, the U.S. Court of International Trade (CIT) ruled that the President had exceeded his statutory powers under IEEPA by imposing such sweeping tariffs. The government appealed the CIT’s decision, and the case eventually reached the Supreme Court in Learning Resources v. Trump. In short, the Supreme Court majority held that the President of the United States cannot rely on IEEPA to impose tariffs because that statute does not encompass a taxing power.
Immediately thereafter, President Trump announced that he would be imposing a new set of tariffs, albeit under different statutory authorities. He has followed through on that announcement through a slew of tariffs under archaic trade laws that have sat idly for decades (someone in his administration is terrifically creative). While those parallel actions operate beyond the scope of this post, Kathleen Claussen does a great job describing them for trade audiences.
What is Section 301?
Section 301 provides that if the Office of the U.S. Trade Representative (USTR) determines that:
(1) an act, policy, or practice of a foreign country is unreasonable or discriminatory and burdens or restricts United States commerce, and
(2) action by the United States is appropriate, the Trade Representative shall take all appropriate and feasible action authorized under subsection (c), subject to the specific direction, if any, of the President regarding any such action, and all other appropriate and feasible action within the power of the President that the President may direct the Trade Representative to take under this subsection, to obtain the elimination of that act, policy, or practice. Actions may be taken that are within the power of the President with respect to trade in any goods or services, or with respect to any other area of pertinent relations with the foreign country.
The first Trump Administration imposed Section 301 tariffs successfully, and it has thus far withstood challenge and scrutiny. It has become a convenient alternative to IEEPA and has permitted the U.S. administration to replace the former tariffs, struck down by the Supreme Court, with a new slate of tariffs reflecting virtually the same percentages and economy targets.
Why forced labour?
Many of you will wonder, quite reasonably, why a country that consistently uses private prison labour and otherwise violates international labour standards while disregarding international criticism would become the global leader in forced labour initiatives. I have long noted that labourstandards are an attractive trade commitment. At the ILO, where I was a lawyer for nearly a decade, international labour standards are written (with some exceptions) to be flexible, taking into account national circumstances. The ILO’s supervisory bodies fill in the open-textured text through dialogues with the governments and national workers’ and employers’ associations. But, as mentioned above, the ILO’s processes lack economic sanctions. Governments have replaced the ILO’s supervisory bodies with their own judge-and-jury systems, imposing sanctions at their discretion.
The Section 301 Forced-Labour Import Bans
On March 12, 2026, USTR announced it was launching 60 investigations under Section 301 related to the failure of those economies to each impose and effectively enforce a prohibition on the importation of goods produced wholly or in part with forced labour. That announcement explained that, despite USTR’s efforts to get trade partners to adopt “measures intended to stop the importation or sale of products using forced labor…none of these countries has adopted and effectively enforced a forced labour import prohibition to date.” USTR tied that failure to U.S. economic interests, noting, without embellishment, that it “may negatively affect U.S. commerce.” U.S. exports could also compete in global markets with products made with forced labour. Those factors could show practices “in violation of, or inconsistent with, the international legal rights of the United States” or could constitute “a persistent pattern of conduct that permits any form of forced or compulsory labor,” in a way that leads to a finding under Section 301 that the foreign failures are “unreasonable or discriminatory and burden or restrict U.S. commerce.”
On June 2, 2026, USTR released its report finding that all 60 economies under investigation, including the European Union, Canada, and Mexico, either failed to effectively enforce a forced labour prohibition or failed to impose any legal prohibition on the importation of goods produced wholly or in part with forced labour. Citing Section 301(b) of the Trade Act, the report notes that the Trade Representative must now “take all appropriate and feasible action …to obtain the elimination of that act, policy, or practice.” USTR proposed 10% as the rate of additional duties for one group of countries and 12.5% for another.
Critique
There is much to be said about the forced-labour import bans. This post will hit on a few key points.
First, since the announcement of the Section 301 action, numerous countries have adopted forced-labour import bans or taken steps to operationalize them. Those efforts suggest that trade tools like Section 301 may help eradicate forced labour by incentivizing countries to set up, fund, and administer mechanisms to identify forced labour in supply chains.
Second, and less positively, the report raises a host of legitimacy concerns. The report finds that the failure of all 60 economies to impose and enforce a forced labour import ban is actionable. Notably, the investigation and tariffs focus solely on the bans, and not on domestic instances of forced labour, itself. Nevertheless, referring back to the statute, USTR argues that failing to impose and enforce such a ban is “unreasonable” because it undermines the universal aim of eliminating forced labour. That failure also permits firms that use forced labour to produce goods at a lower cost and distort market conditions, harming firms that do not use forced labour. It also undermines the profitability of firms that do not use forced labour and contributes to circumvention of existing forced-labour import prohibitions. Finally, USTR alleges that the failure to impose and enforce a forced-labour import ban “burdens or restricts U.S. commerce by subjecting U.S. producers to unfair competition from forced labour goods in both export markets and the U.S. market, and by displacing foreign goods produced without forced labour or forced labour inputs from their domestic market to the United States and other markets.”
The report’s thesis is extremely convoluted and does not track traditional trade-law reasoning. USTR’s arguments reduce to four linked claims. First, U.S. enforcement authorities, namely Customs and Border Protection (CBP), effectively enforce forced labour import bans in the United States. Second, CBP’s effective enforcement compels compliance with forced labour import prohibitions in the United States. Third, U.S. forced labour import bans make it more costly for U.S. companies to produce goods with supply chain inputs than foreign competitors. Fourth, U.S. exporters do not similarly export inputs produced in whole or part by forced labour.
The problems with these arguments are manifold. Members of Congress have gone on record criticizing CBP for failing to enforce the forced-labour import bans, suggesting that other economies’ failure to do the same has not affected competitiveness. That criticism suggests that if U.S. enforcement is weak, other economies’ failure can’t be the source of any competitive disadvantage. Second, USTR’s arguments fail to reconcile data, such as that provided by the Global Slavery Index, showing that a total of $196.6 billion worth of imports at risk of being produced by forced labour continue to make their way into the United States annually.
Third, the import ban fails to account for the differences between how the United States defines “forced labour” and how the ILO defines it. Under ILO Convention No. 29, forced labour means labour “from any person under the menace of any penalty and for which the said person has not offered himself voluntarily.” Meanwhile, Section 307 similarly states: “’Forced labor’, as herein used, shall mean all work or service which is exacted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself voluntarily.” However, Convention No. 29 expressly includes “the imposition of forced labour for the benefit of private individuals, companies or associations.” U.S. legislation fails to honor that definition. When the question of ratifying Convention No. 29 was before the U.S. Tripartite Advisory Panel on International Labor Standards (TAPILS), the panel concluded: “Convention 29 cannot be ratified without amending U.S. law and practice…[TAPILS] concluded that the trend of states to subcontract the operation of prison facilities to the private sector in the United States conflicted with the requirements of Convention 29 relating to circumstances under which the private sector may profit from prison labour.” Consequently, the U.S. definition excludes the very conduct – forced labor in private prisons – that its laws permit. Meanwhile, private prisons in the United States made billions of dollars in profits last year owing to ramped-up immigration detention. Prisoners who “volunteer” to work make $1 a day. The goods they produce, including food items, enter the stream of commerce.
Fourth, although Section 301 requires a showing of market disadvantage, USTR made no effort to show that U.S. exports comply with forced labour legislation. Its report merely contrasts the United States with another economy that “permits or does not police the use of forced labor to produce or provide services.” If the United States is guilty of the same, the comparative disadvantage argument either fails or is significantly weakened.
What’s Next?
Litigation over the Section 301 tariffs, which I predicted when the report came out, has already begun. A 25-state coalition has sued the Trump administration at the CIT, arguing that the tariffs were imposed under the “guise of combating forced labor in global trade” and urging the court to find them unlawful. Two U.S. businesses are also suing at the CIT, arguing that the tariffs are “arbitrary and capricious” and thus violate the U.S. Administrative Procedure Act. The CIT is reviewing these cases concurrently under a joint schedule, for full briefing by October 2, 2026.
Conclusion
The intersection between trade and labour is fraught. Labour advocates hope trade instruments will incentivize governments to adopt national instruments that protect workers, perhaps assuming those trade instruments will be legitimate and align with international labour standards. Opponents worry that governments like the Trump Administration will use them for illegitimate, protectionist purposes. Given the timing of the Section 301 tariffs and their targets, those concerns are valid. The administration’s actions to sanction other economies for failing to implement forced-labour import bans parallel its refusal to pay membership dues to the ILO, maintaining private prison labour, and otherwise undermining the U.S. administrative state.
Forced labour, whether in the United States or abroad, is heartbreaking and has no place in the global economy. But the Trump administration’s weak efforts to mask its tariff ambitions in the Section 301 context have significant implications for the labour movement. Worker-rights advocates spent decades convincing skeptical policymakers that labour standards deserved a place in trade regulations. The current tariffs merely bolster suspicions and undermine the progress made thus far. The CIT’s impending decision(s) may or may not add clarity and safeguards to the process. Meanwhile, advocates, governments, and businesses must wait. The issue of forced labour, once a fight on behalf of workers, has been relegated to the footnotes.