In a June 2 report, the United States Trade Representative (USTR) concluded that all 60 economies it had investigated under Section 301 of the Trade Act of 1974 – including the European Union, Hong Kong and Taiwan – were distorting trade by failing to impose and effectively enforce import bans on goods made with forced labor. On this basis, the report proposed new tariffs on their imports, which together constitute around 99.4 percent of all imports into the United States by value. These tariffs would in part replace those that the U.S. Supreme Court found illegally imposed under the International Emergency Economic Powers Act (IEEPA) in Learning Resources, Inc. v. Trump.
The Double Standard of the Forced Labor Determinations
Forced labor is morally wrong, and the U.S. import ban of products produced with forced labor under Section 307 of the U.S. Tariff Act of 1930 helps combat it. Section 307 of the 1930 Act prohibits the import of goods produced with forced labor, while Section 301 of the 1974 Trade Act authorizes USTR to investigate and take action against foreign countries whose acts or policies burden or restrict U.S. commerce.
The problem is that USTR’s findings under Section 301 smack of cynicism and hypocrisy. The government devised a theory requiring universal standards against forced labor that it does not apply to itself. It uses this logic as a pretextual rationale to apply tariffs on any or all imports at the president’s direction.
USTR’s report reasons as follows. First, by allowing forced labor goods to be imported, these countries gain competitive advantage when they incorporate such imports into products sold into the United States. Second, such imports also “permit displacement of fairly produced goods into the U.S. market.” According to this second argument, goods fairly produced in those countries are exported into the United States because they cannot compete at home against unfairly produced imports. USTR finds that the United States alone has effective protections against unfairly produced imports, which gives rise to this dynamic that “burdens or restricts U.S. commerce.”
The problem with USTR’s logic is three-fold. First, and most problematically, the USTR does not apply its logic to the United States itself. Second, USTR’s findings regarding all 60 economies are largely conclusory and not supported by evidence that U.S. commerce is burdened or restricted because of that country’s practices. Third, the proposed differences in tariff rates do not reflect actual enforcement practices against forced labor, but rather countries’ willingness to conclude deals with the Trump administration that respond to other, non-labor-related U.S. market access and investment demands.
To start, unlike each of the 60 economies that it investigated, the United States is one of six countries in the world that has not ratified the foundational international instrument against forced labor—the International Labour Organization’s Forced Labour Convention (No. 29) of 1930, although it has ratified the narrower, subsequent Forced Labor Convention (No. 105) of 1957 that focuses on forms of state-organized forced labor. These treaties lie at the core of USTR’s argument that there is a global moral norm against forced labor. The U.S. Senate has not ratified the foundational 1930 treaty because it forbids compulsory labor “for the benefit of private individuals, companies or associations” (Art. 4), which would have forced the United States to end its practice of contracting prison labor to private firms. Today roughly 800,000 incarcerated people work in American prisons, producing some $11 billion in goods and services a year for wages averaging 13 to 52 cents an hour—and in seven states, for no wages at all.
Jurisdictions under the USTR investigation, such as European countries, provide significantly greater protections for prison labor than the United States, such as minimum wage laws. Indeed, the Trump administration reversed Biden administration orders and renewed and expanded contracting with private prisons that extensively use prison labor. Walk Free, which compiles the Global Slavery Index, classifies such U.S. practices as “state-imposed forced labor.” The United States also permits goods produced with other forced labor—including that of migrant children—in agriculture and manufacturing. In sum, products produced with forced labor in the United States—whether involving prison labor or otherwise—are sold domestically and exported.
Second, the evidence that USTR cites in its report for critiquing the effectiveness of other countries’ practices spotlights the lack of effectiveness of U.S. controls. Much of USTR’s argument rests on a comparison between the number of imports that the United States’ Customs and Border Patrol (CBP) has turned away versus the customs agencies of investigated economies. One of the major contributors to these figures, which USTR repeatedly invokes, is the Uyghur Forced Labor Prevention Act (UFLPA)—which restricts imports from the Xinjiang region of China.
USTR argues that the lack of equivalent laws in other countries allows Xinjiang-originating goods to circumvent the UFLPA, and it cites research reports which document this third-country tactic. However, this research also shows how such goods are directly shipped to the United States in circumvention of U.S. law. USTR wants to reach the conclusion that the United States does a better job than any other country at protecting against imports of forced-labor goods, so it selectively omits these findings of the research it cites, which would undermine its conclusions.
In investigating everyone but without acknowledging its own practices and challenges, USTR has developed and applied a universal theory of unfairness that applies everywhere except at home. Indeed, the Global Slavery Index reports that the “United States is by far the biggest importer of at-risk products (US$169.6 billion).”
USTR’s logic regarding the burden on U.S. commerce from unfair labor practices should not stop at forced labor. The report notes that Section 301 provides that weak enforcement of “standards for minimum wages, hours of work, and occupational safety and health of workers” constitute an “unreasonable” trade distortion. Yet, the United States ranks at or near the bottom of OECD members in legal protections for its own workers, has low union collective bargaining representation in its workforce, and has not raised its federal minimum wage since 2009. The International Trade Union Confederation finds that “President Donald Trump has orchestrated an unprecedented and sustained attack on the fundamental rights of workers and unions.” The administration’s practices are “dismantling key workplace protections.” For example, the second Trump administration revoked the federal-contractor minimum wage by executive order. Table 1 captures the hypocrisy of USTR’s reasoning by showing where the U.S. ranks in labor protections compared to other countries, while noting the tariff rates USTR proposes on such countries’ imports because of “unreasonable” practices regarding labor that burden U.S. commerce.
Table I: OECD Strictness of Employment Protection and Proposed USTR Duty Rates
Third, the resulting tariffs that USTR proposes track what each economy in question promised Washington, and not how that economy protects its workers nor its policies regarding goods produced with forced labor. The clearest evidence lies in the rates themselves, as documented in Table 2.
Many economies that USTR found to lack a ban on imports of forced-labor goods still received the lower 10 percent proposed rate because they had finalized an Agreement on Reciprocal Trade (ART) or a similar trade deal with the Trump administration. Although USTR notes that these agreements contain commitments to enact forced-labor import prohibitions, most contain only a brief mention. The U.S.-UK Economic Prosperity Deal, for example, contains only a single parenthetical on forced labor in Article 6. In contrast, countries that only signed a framework agreement—Japan, South Korea, India, Vietnam, Thailand, and Switzerland—all received the higher 12.5 percent rate regardless of their practices implicating labor, as did those that signed no deal at all.
The reliance on trade-deal status as a determinative factor is further demonstrated by the evidence that USTR left out. The agency treats the absence of a U.S.-style import ban as the lack of meaningful protection, but several investigated economies impose real legal obligations on firms regarding forced labor in their supply chains.
As the United States’ own documented failure to restrict imports of forced-labor goods suggests, supply-chain tracing and transparency may be as or more effective than a simple import ban. Norway’s Transparency Act (2021), for example, mandates human-rights due diligence, remediation, and disclosure—including for forced-labor issues. Norway is also in the process of incorporating the EU’s Forced Labour Regulation due to its European Economic Area membership, but USTR does not credit this, unlike for the EU with whom it has signed a deal (even though the EU Regulation is also not in effect). Australia’s Modern Slavery Act (2018) requires companies with an annual revenue of AU$100 million or more to publish annual statements on forced-labor risks in their supply chains. The Swiss Code of Obligations also contains corporate due diligence requirements. Nicaraguan customs law goes further; it requires importers to declare that goods were not produced with forced labor, empowers authorities to demand supply-chain documentation, and imposes criminal sanctions for falsification.
Relatedly, New Zealand and South Africa each prohibit imports of prison-labor goods—thus including those from the United States.
The Australian, New Zealand, Norwegian, South African, and Swiss governments each submitted comments regarding their laws and practices, but USTR either dismissed them or did not reference them. These countries are all subject to the higher rate together with those that lack any forced-labor measure at all. In contrast, the agency still proposed the lower 10 percent rate for Canada, Ecuador, the EU, Indonesia, Mexico and Pakistan despite its findings that all “failed to effectively enforce” a forced-labor prohibition. The only difference appears to be the countries’ conclusion of a trade deal with the Trump administration.
Table 2: USTR Reasoning for Differential Tariff Rates
In sum, the agency sorted the economies it is investigating into two tiers, but there is no coherent labor-protection logic to the grouping. Only the trade-agreement status of investigated economies appears relevant, suggesting that USTR’s methodology is intended more to pressure countries to sign and implement deals than to protect labor.
The labor issues that USTR claims to investigate are real problems. They should not become pretexts for tariffs the administration already declared it wants for other reasons. If the United States is serious about the moral outrage of forced labor, it should address practices at home and work with foreign countries, including through technical assistance to developing countries in need of enforcement capacity.
On June 1, USTR also released a separate Section 301 report that specifically targeted Brazil with a proposed 25 percent tariff, which would add to the 12.5 percent tariff under the forced-labor investigation. Brazil had earlier been targeted with a 40 percent tariff under IEEPA. Among other issues, USTR accused Brazil of imposing “unfair and preferential tariffs” pursuant to its trade agreements, although they are arguably legal under the WTO’s Enabling Clause and although they provide nowhere near the differential that USTR proposes against Brazil. The USTR also accuses Brazil of granting its businesses an unfair advantage through non-enforcement of its corruption laws, while the Trump administration has suspended enforcement of the Foreign Corrupt Practices Act by executive order at a time when accusations of corruption are rising in the United States. Here the real target appears to remain the Brazilian Supreme Court’s sentencing of former President Jair Bolsonaro (a Trump ally) for his attempted coup.
USTR’s findings in these Section 301 investigations are hypocritical and cynical. The agency knew the day it announced its investigations what its findings would be when it affirmed its commitment “to continue implementing the President’s trade policy.” The administration is dismantling long-standing norms, in this case using Section 301 to raise tariffs globally instead of addressing specific practices of specific countries that restrict U.S. commerce. The proposed Section 301 tariffs reflect a renewed attempt of the president to take tariff authority from Congress and set tariff rates for all imports from all trading partners at the president’s will.
