US Proposes Forced Labour Tariffs, Yet Allies Win Reprieve

The United States has proposed punitive tariffs of up to 12.5% on goods from 60 economies, citing their failure to enforce bans on imports produced with forced labour, a move that has stirred immediate diplomatic friction while simultaneously revealing fault lines between Washington and its trading partners. The Office of the United States Trade Representative (USTR) announced the section 301 findings on Tuesday, triggering a 30-day consultation period before the levies take effect. For some allies, however, existing trade agreements appear to offer a shield.

Speaking on the sidelines of an OECD ministerial meeting in Paris, USTR Jamieson Greer signalled that the Biden-era Turnberry deal with the European Union—which caps US tariffs on most European goods at 15%—would be respected. “We understand that a deal is a deal,” he said, suggesting the new duties could be adjusted downward for the EU and, separately, for Japan, which has a similar bilateral tariff cap. Both Brussels and Tokyo had quickly protested the forced labour designation, with the EU insisting that Washington fully honour the Turnberry terms. Viewed from European capitals, the threat of new tariffs risks undoing the careful equilibrium struck only last year.

The calculus is more complex for New Delhi. The USTR’s proposed 12.5% levy on Indian goods lands just as negotiators sprint to finalise a bilateral trade pact, building on an interim framework sealed in February that has already reduced average US tariffs on Indian exports to 18%. President Donald Trump, addressing reporters at the White House, expressed confidence that a deal would be struck “soon”, citing his personal rapport with Prime Minister Narendra Modi. “I like your prime minister a lot. He is a good friend of mine,” Trump said, while claiming that the trading relationship had been turned on its head: “For years, India took advantage of the United States… Now it is the exact reverse.” Analysts view the tariff threat as leverage to extract greater market access for American goods, a tactic Washington has employed before.

Elsewhere, the tariffs would bite harder. Nigeria, among the 60 listed economies, faces a potential 27.5% combined duty on its exports to the US, a prospect that underscores the disproportionate impact on economies with less negotiating clout. The USTR’s action highlights a broader ambition: using trade penalties to enforce labour standards globally. But by carving out exceptions via bilateral deals, Washington is constructing a two-tier system—one where geopolitically favoured partners can negotiate reprieves, while others face the full weight of unilateral sanctions. That asymmetry may fuel grievances in Geneva and beyond, as the multilateral trading system struggles to accommodate Washington’s transactional turn.