USTR Announces Proposed Tariffs Related to Forced Labour Enforcement
While CUSMA-qualifying goods are excluded under the current proposal, Canadian exporters should still review their origin documentation and assess potential tariff exposure.
Following a Section 301 review related to forced labour enforcement measures, the Office of the United States Trade Representative (USTR) announced the U.S. is proposing new tariffs on goods from 60 economies, including Canada.
Based on findings from 60 investigations, the review examined whether certain economies had imposed and effectively enforced prohibitions on the import of goods produced with forced labour.
Under the proposal, certain goods entering the United States could face an additional 10%-12.5% duty.
Canada is one of six economies placed in Tier 1 of the USTR proposal. These economies have a forced labour import prohibition in place, but were assessed by USTR as not effectively enforcing it. The other five economies in this group are Ecuador, the European Union, Indonesia, Mexico, and Pakistan.
For this group, the USTR has proposed an additional duty of 10%.
A higher proposed rate of 12.5% would apply to goods from economies that the USTR found had not imposed and effectively enforced a forced labour import prohibition.
However, the proposal includes a carve-out for goods that qualify under CUSMA. Canadian goods that meet CUSMA rules of origin would not be subject to the proposed 10% Section 301 tariff under the current proposal.
The proposed forced labour enforcement tariffs are still subject to a public comment and review process.
Key dates include:
No new tariffs will take effect until the USTR completes the process and issues a final decision.
At Cole International, we offer trade consulting services to help Canadian businesses navigate changes to global trade requirements.
If you export goods to the U.S., reach out to one of our trade professionals to discuss how the proposed tariffs may apply to your goods.