US Proposes 12.5 pc Tariff on India, China and 58 Other Countries
The United States Trade Representative (USTR) has unveiled a proposal to impose additional tariffs on imports from 60 economies, including India, China, Japan, the European Union, and the United Kingdom. The move follows a series of investigations into whether these economies have implemented and enforced measures to block goods produced using forced labour.
According to the proposal, countries that have established full or partial restrictions on forced labour-linked imports could face an additional tariff of 10 percent. Economies that have not introduced such restrictions may be subject to a higher tariff rate of 12.5 percent.
USTR stated that the lack of effective action against forced labour-related imports creates unfair competition for American businesses and workers. The agency argued that companies benefiting from lower production costs through forced labour practices gain an advantage in international markets, affecting U.S. industries.
The investigations were launched in March 2026 under Section 301 of the Trade Act of 1974, a law that allows the United States to respond to foreign trade practices considered harmful to U.S. commerce. The review covered economies responsible for nearly all U.S. imports.
Among the countries examined, India was listed among those that, according to USTR, neither implemented nor effectively enforced prohibitions on imports linked to forced labour. Similar findings were reported for several other major trading partners, including China, Japan, South Korea, Vietnam and the United Kingdom.
Meanwhile, Canada, Mexico, the European Union, Indonesia, Ecuador and Pakistan were found to have legal frameworks in place but were considered by USTR to have insufficient enforcement mechanisms.
The trade authority noted that weak controls on forced labour-related goods can distort market conditions by enabling certain manufacturers to operate at lower costs. Such practices, it said, can undermine fair competition and reduce the effectiveness of existing trade restrictions.
In addition to the proposed tariffs, USTR outlined a potential textile and apparel mechanism that may allow a limited quantity of imports from selected economies to enter the U.S. market under lower tariff rates. Further details on eligibility have not yet been announced.
The proposal reflects a broader U.S. strategy aimed at strengthening trade enforcement, improving supply chain transparency and addressing labour rights concerns. Recent U.S. actions have focused on industries such as textiles, electronics, mining, solar products and other sectors where forced labour allegations have been raised.
The United States already enforces strict import controls under the Uyghur Forced Labor Prevention Act, which restricts products connected to China's Xinjiang region unless importers can demonstrate that forced labour was not involved in production.
Several countries, including members of the European Union and Canada, have also introduced supply-chain due diligence requirements designed to identify and address labour-related risks. India, however, has not yet introduced a dedicated import restriction framework similar to those measures.
The tariff proposal remains under review and will undergo additional consultations before any final decision is made. If approved, the measures could have significant implications for global trade flows and exporters that rely heavily on access to the U.S. market.
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