US Imposes 10% ‘Forced Labour’ Tariff On India Under Section 301 Investigation

The United States has announced fresh tariffs of 10 per cent and 12.5 per cent on imports from 60 economies under Section 301 of the Trade Act of 1974, with India securing a place in the lower 10 per cent category. The decision comes after discussions with Washington on labour practices, officials said.

The new duties, announced by the Office of the US Trade Representative (USTR) on Thursday, target countries that the US says have failed to adequately prohibit the import of goods produced using forced labour. The tariffs will take effect on Friday, July 24.

How Did India Secure A Lower Tariff?

According to officials, India was initially expected to face a 12.5 per cent tariff but secured the lower rate following what they described as constructive engagement with the United States on labour standards.

With this, India is among 17 economies that will face the lower 10 per cent tariff, the USTR said. Other countries in this category include the United Kingdom, Canada, Bangladesh, Indonesia, Mexico, Pakistan, Malaysia, Sri Lanka and Cambodia.

In its notification, the USTR said the 10 per cent rate would apply to economies that have either imposed a prohibition on forced labour imports, committed to doing so through an Agreement on Reciprocal Trade, or introduced a partial regime aimed at preventing the import of certain goods produced through forced labour.

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For all other investigated economies, the USTR has imposed a 12.5 per cent tariff. Certain products from the European Union, Taiwan, Japan, South Korea and Switzerland will also attract duties ranging between 10 per cent and 12.5 per cent, net of Most-Favoured-Nation (MFN) rates.

Trump Administration Cites Forced Labour Concerns

The action follows investigations launched by the USTR in March under Section 301(b) of the Trade Act of 1974 into 60 economies over what it described as inadequate enforcement of bans on imports made with forced labour. Section 301 gives the US Trade Representative the authority to impose tariffs and other trade measures against countries found to be engaging in unfair trade practices.

The USTR said the investigation included consultations with more than 45 governments, public hearings, and a review of over 1,600 written submissions on the proposed measures.

US Trade Representative Jamieson Greer said the action was taken at the direction of President Donald Trump. “President Trump recognises that decades of moral suasion have not eradicated forced labour from global supply chains. The United States has had a forced labour import ban for nearly a century, and rigorously enforces it; it’s well past time for our trading partners to do the same,” Greer said. He added that he was encouraged by countries that had moved quickly to adopt forced labour import prohibitions and expressed hope they would effectively enforce them.