US proposes new tariffs on India and 59 other countries over forced-labour imports

The Trump administration has proposed to impose fresh tariffs against 60 countries, including India, for failing to effectively prohibit the import of goods that are produced with forced labour. The announcement was made by the United States Trade Representative (USTR).

The USTR, in a statement on Tuesday (June 2), said that it has come to the conclusion that, under Section 301 of the US Trade Act of 1974, the 60 economies are implementing acts, policies and practices that are "unreasonable and burden or restrict US commerce.”

India among countries flagged

India is among 54 economies identified by the United States Trade Representative (USTR) as lacking effective measures to prohibit the import of goods produced through forced labour. The list released by the agency also includes several major US trading partners, among them Australia, Bangladesh, Bahrain, China, Japan, Kuwait, Saudi Arabia, Singapore, the United Kingdom and the United Arab Emirates.

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The USTR further stated that it had assessed a total of 60 economies under an investigation examining whether trading partners maintain and enforce restrictions on imports linked to forced labour. The agency divided the economies into two categories.

‘Failure is unacceptable’

While 54 economies, including India, were found not to have adopted and effectively enforced such prohibitions, six others, Canada, Ecuador, the European Union, Indonesia, Mexico and Pakistan, were found to have enacted restrictions but failed to enforce them adequately.

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"The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field," US trade representative ambassador Jamieson Greer said in the statement.

Tariff proposal outlined

Following the findings, the USTR proposed the imposition of additional duties on imports from the economies covered by the investigation and sought public comments on the proposal.

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Under the framework outlined by the agency, economies that have adopted, or pledged to adopt, prohibitions on forced-labour imports could face an additional tariff of 10 per cent. Economies that have not done so, including India, could be subjected to a 12.5 per cent duty. The proposal also includes a separate enforcement regime for certain textile and apparel products.

The investigation was launched on March 12 and examined whether trading partners had taken sufficient steps to prevent goods produced with forced labour from entering their markets. The USTR said it reviewed nearly 500 submissions and received testimony from almost 60 witnesses before reaching its conclusions.

Trade talks in backdrop

According to the agency, the absence of effective import restrictions weakens global efforts to combat forced labour, creates cost advantages for non-compliant producers and places businesses that comply with labour standards at a competitive disadvantage.

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The findings come at a time when India and the US are continuing negotiations on a proposed bilateral trade agreement. Discussions between the two countries have covered tariffs, market access, agriculture and digital trade, while broader disputes related to President Donald Trump's trade policies remain unresolved.

The USTR has invited written submissions until July 6 and scheduled public hearings for July 7 before taking a final decision on the proposed measures. The findings do not automatically result in tariffs, although investigations conducted under Section 301 of the US Trade Act can lead to duties or other trade actions if approved by the administration.