The Trump administration resurrected its global tariffs by shining a light on forced labor. The tariffs face a court challenge, but the spotlight isn’t going away.
After the U.S. Supreme Court in February shot down President Trump’s global tariffs—which relied on emergency economic powers—the administration turned to a new theory to partially revive them, accusing America’s trade partners of failing to take action against forced labor. Various administrations have regularly used it over trade disputes in a number of sectors, from beer to green technology.
Section 301 of the Trade Act of 1974, under which the Trump administration has imposed its new round of tariffs, lets the president take action against countries it finds have engaged in unfair trade practices. The Trump administration supercharged the use of this legal power by taking action in July against 60 economies that it said had failed to adequately address forced labor, putting competing U.S. workers on an unfair footing.
“It’s a big issue,” said Luis Lozano, the former president of Toyota’s Mexico unit and who now serves as chief executive of Mexico City-based advisory Odysseus Business Intelligence.
Canada is one of the countries that have scrambled to bulk up their forced-labor enforcement amid the U.S. push. Prime Minister Mark Carney’s government proposed a tougher forced-labor law in June, about a week after the USTR filed a preliminary report that criticized the forced-labor records of Canada and other U.S. trading partners.
“Regardless of whether one is for or against the tariffs, everyone has to admit that the 301 investigations have ignited conversations about forced labor in supply chains all over the world,” said Laura Murphy, a forced-labor researcher who advised the Biden administration. The administration’s focus on forced labor is a welcome one, said Samir Goswami, director of forced-labor programs at Hague-based Global Rights Compliance, which works with governments and international institutions to promote international law. Countries around the world are unlikely to reverse their new forced-labor-related policy moves regardless of what the U.S. court decides, said Richard Mojica, head of the customs-and-import-trade practice at the law firm Miller & Chevalier.
