The United States Trade Representative (USTR) has proposed trade action against 60 economies, including India, after determining that they had failed to effectively enforce and implement a ban on the import of goods produced with forced labour.
In a statement issued Tuesday, the US Trade Representative said it had concluded under Section 301 of the US Trade Act of 1974 that the actions, policies and practices of the 60 economies “are unreasonable and constitute a burden or restriction on US trade,” making them enforceable under US trade law.
India is among 54 economies that, according to the US Trade Representative, have failed to effectively impose and enforce a ban on imports made using forced labor. The list also includes countries such as Australia, Bahrain, Bangladesh, China, Japan, Kuwait, Saudi Arabia, Singapore, the United Kingdom, and the United Arab Emirates.
“The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable. This creates a dynamic in which American workers are forced to compete globally on an unlevel playing field,” USTR Ambassador Jamison Greer said in the statement.
Suggested additional duties
As a result of this decision, the US Trade Representative proposed additional duties on products from the economies under investigation and invited public comments.
According to the agency, economies that have already adopted, or committed to adopting, a ban on forced labor imports could face an additional 10% tariff, while all other economies could be subject to a 12.5% tariff. A separate textile mechanism has also been proposed for some garment and textile imports.
Investigations began on March 12 of this year. The USTR said it received testimony from about 60 witnesses and about 500 comments during the public consultation process before reaching its conclusions.
According to the US Trade Representative, the absence of an effective ban on the import of forced labor undermines efforts to eliminate forced labor globally, distorts market conditions by allowing less expensive production, harms companies that do not use forced labor, and enables circumvention of existing restrictions.
Trade negotiations between India and the United States
This development comes at a sensitive time in economic relations between India and the United States, as the two countries work to conclude the first tranche of a bilateral trade agreement. Officials from New Delhi and Washington have held multiple rounds of negotiations in recent months, with market access, tariffs, digital trade and agriculture among the key issues under discussion.
The US Trade Representative’s proposed action also comes after months of trade tensions resulting from US President Donald Trump’s reciprocal tariff policy. India was among the countries threatened with higher tariffs earlier this year before Washington temporarily halted some measures to allow negotiations with trading partners. New Delhi stressed that it seeks to reach a balanced and mutually beneficial trade agreement while protecting sensitive local sectors.
Despite periodic trade disputes, the United States remains India’s largest trading partner. Bilateral merchandise trade between the two countries has exceeded $120 billion in recent years, and the two governments have repeatedly expressed their commitment to deepening economic ties.
The US Trade Representative has called for written comments on the proposed measures until July 6, and will hold public hearings on July 7 before making a final decision. The agency’s findings do not automatically lead to tariffs, but Section 301 investigations could eventually lead to tariffs, quotas or other trade restrictions if the administration decides to move forward.
