The Next Tariff Front: USTR's Forced-Labor Tariffs Could Hit Imports from 60 Economies

On June 2, 2026 the Office of the United States Trade Representative (USTR) issued its determination in 60 Section 301 investigations concerning whether trading partners prohibit and effectively police imports made wholly or in part with forced labor.

USTR found the conduct of each investigated economy actionable and proposed a new tariff overlay: additional duties of 10% or 12.5%, depending on the economy, subject to product and program-specific exclusions. The duties are not in effect yet. But for companies that import, source, price, or move goods across borders, it is important to start measuring exposure now, while the comment record is still open.

The Proposed Tariff Structure: Two Rates, Broad Reach

USTR’s theory is straightforward and aggressive: If a trading partner does not impose and effectively enforce a forced-labor import prohibition, goods from that economy gain an artificial cost advantage and burden U.S. commerce. USTR therefore proposes additional duties on all products of the investigated economies, except products covered by Annex A and other specified exclusions. The lower proposed rate — 10% — would apply to economies with an existing forced-labor import prohibition, relevant commitments through an Agreement on Reciprocal Trade (ART), or a partial regime addressing certain forced-labor goods. That group includes the following economies:

 

Argentina	Guatemala
Bangladesh	Indonesia
Cambodia	Malaysia
Canada	Mexico
Ecuador	Pakistan
El Salvador	Taiwan
European Union	United Kingdom

 

For the other 46 investigated economies, USTR proposes a 12.5% additional duty. That group includes:.

Algeria	Brazil	Dominican Republic	India	Kazakhstan	Nicaragua	The Philippines	South Africa	Trinidad and Tobago
Angola	Chile	Egypt	Iraq	Kuwait	Nigeria	Qatar	South Korea	Türkiye
Australia	People’s Republic of China	Guyana	Israel	Libya	Norway	Russia	Sri Lanka	United Arab Emirates
The Bahamas	Colombia	Honduras	Japan	Morocco	Oman	Saudi Arabia	Switzerland	Uruguay
Bahrain	Costa Rica	Hong Kong	Jordan	New Zealand	Peru	Singapore	Thailand	Venezuela
								Vietnam

Proposed Exclusions and Carveouts

The proposal is broad, but not borderless. Products listed in Annex A to the Federal Register notice would be outside the proposed action. Because Annex A is organized by Harmonized Tariff Schedule (HTS) classification, importers should review it by tariff number, not by product name.

In addition to the Annex A product list, USTR states that the proposed action would not cover informational materials, donations, accompanied baggage, articles, and parts subject to Section 232 tariffs, USMCA-compliant goods of Canada or Mexico, and certain textile and apparel articles that enter duty-free as goods of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, or Nicaragua under CAFTA-DR.

USTR also proposes a textile mechanism, not a true exemption, for certain apparel and textile imports. Under the proposal, a volume of imports could enter at a reduced Section 301 rate based on the relevant trading partner’s purchases of U.S. textiles, cotton, and cotton products. This matters for apparel, retail, and logistics teams because duty outcomes could turn not only on origin and classification, but also on volumes, product mix, and sourcing history. The mechanism is still only proposed, and USTR is asking for comments on its design.

What Companies Can Do Now

For companies, the question is not whether the policy debate is noble or flawed. The question is whether the landed-cost model still works.

• Map exposure by country of origin and HTS number. Pull 2025-2026 entry data for the 60 economies and identify lines that would fall outside Annex A or other exclusions.
• Quantify the cash impact. Model the 10% and 12.5% duties as an additional tariff layer, and test margin, pricing, customer pass-through, and bond sufficiency.
• Test exclusions before assuming coverage. Confirm Section 232, USMCA, CAFTA-DR, Chapter 98, informational-materials, donation, baggage, and Annex A treatment with customs documentation.
• Prepare a comment record. USTR specifically invites evidence on product scope, Annex A exclusions, duty levels, supply disruptions, domestic availability, and textile-mechanism design. Companies with high exposure should consider submitting comments, testifying, or working through industry coalitions.
• Align sourcing, contracts, and logistics. Review purchase orders, Incoterms, tariff pass-through clauses, delivery timing, foreign trade zone (FTZ) strategy, and broker instructions before the final action is issued.
• Build the compliance story. Companies should be ready to explain supply-chain diligence, forced-labor controls, and why proposed duties on their products would not advance USTR’s stated objective.

Key Dates: The Clock Is Short

No new duties will take effect until USTR completes the public-comment and hearing process and issues a final action. Companies affected by the proposal should decide quickly whether to submit written comments, request to appear at the public hearing, or coordinate with trade associations. USTR identified docket number USTR-2026-0265 for written comments and rebuttal comments and USTR-2026-0266 for requests to appear at the hearing.

Key dates are:

• June 22, 2026: Deadline to request to appear at the public hearing and submit a summary of testimony.
• July 6, 2026: Deadline for written comments on the proposed action.
• July 7, 2026: Public hearings before the Section 301 Committee begin and may continue as appropriate.
• Five days after the last day of the public hearings is the deadline for post-hearing rebuttal comments.

USTR also seeks comments on the proposed textile mechanism, including which U.S. and foreign products should be covered, market opportunities on each side, the tariff rate for products subject to the mechanism, and whether a similar mechanism should apply in other sectors.

Tariff proposals serve as opening bids. A focused record—backed by entry data, supply-chain facts, and commercial evidence—can help USTR draw lines that are enforceable, targeted, and less disruptive to legitimate trade. Participation in the upcoming public hearings will be a critical opportunity to shape trade policy. Public engagement is essential to create a final policy that effectively penalizes bad actors, safeguards ethical supply chains, and upholds the global commitment to eliminating forced labor.

Contact Clark Hill

Clark Hill’s International Trade attorneys and the professionals at Clark Hill Public Strategies work together closely to provide tailored solutions for businesses on these matters. If you have questions regarding the content of this alert, please contact Clark Hill’s International Trade Practice by emailing tariffs@clarkhill.com or by calling +1 202-230-9889.

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