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Sixty trade partners of the U.S. are subject to new tariffs following the U.S. Trade Representative (USTR) Section 301 investigation into concerns about forced labor.
The investigation began in March, with the USTR determining in June that the acts, policies and practices of the economies were “unreasonable and burden or restrict U.S. commerce.”
Trading partners that have made commitments to adopt and effectively enforce forced labor import prohibitions are subject to a 10% tariff rate, and partners that have failed to adopt a forced labor import prohibition are subject to a 12.5% tariff rate.
Economies investigated include Algeria, Angola, Argentina, Australia, the Bahamas, Bahrain, Bangladesh, Brazil, Cambodia, Canada, Chile, China, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, El Salvador, European Union, Guatemala, Guyana, Honduras, Hong Kong (China), India, Indonesia, Iraq, Israel, Japan, Jordan, Kazakhstan, Kuwait, Libya, Malaysia, Mexico, Morocco, New Zealand, Nicaragua, Nigeria, Norway, Oman, Pakistan, Peru, Philippines, Qatar, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Sri Lanka, Switzerland, Taiwan, Thailand, Trinidad and Tobago, Türkiye, United Arab Emirates, the U.K., Uruguay, Venezuela, and Vietnam.
The tariffs apply to most imports from the covered countries, but there are plans to exempt specific textiles and apparel from Bangladesh, Cambodia, Indonesia and Malaysia.
Tariff rates
Each tariff rate is specific to that economy and “is only for the purpose of obtaining the elimination of the specific economy’s act, policy or practice found actionable under Section 301.” They each operate independently and may be modified if an economy’s applicable policy or practice is eliminated. If modifications occur, they do not affect other economies’ tariff rates.
12.5% tariff
Goods from Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, the U.K., and Trinidad and Tobago are subject to a 10% tariff rate. Products from all other investigated economies are subject to a 12.5% tariff rate.
Most-Favored Nation rates
Products from the European Union or Taiwan with a Most-Favored Nation (MFN) tariff of less than 10% are subject to a 10% tariff, with the sum of the MFN tariff and the Section 301 tariff equal to 10%. Products with an MFN tariff of more than or equal to 10% are subject to a Section 301 tariff rate of 0%.
Products from Japan, Korea or Switzerland with an MFN tariff of less than 12.5% are subject to a 12.5% tariff, with the sum of the MFN tariff and the Section 301 tariff equal to 12.5%. Products with an MFN tariff of more than or equal to 12.5% are subject to a Section 301 tariff rate of 0%.
Exemptions
Exempted goods include:
- Informational materials, donations, and accompanied baggage;
- All articles and parts of articles subject to section 232 tariffs; and
- Certain products which include (i) raw materials that if subject to the proposed additional tariffs could lead to the unavailability of domestic supply; (ii) products that could cause economy-wide disruptions if subject to the proposed additional tariffs; (iii) certain products that cannot be grown or produced in sufficient quantities in the United States or obtained from other sources; (iv) products that if exempted from these tariffs would encourage economies to enact and effectively enforce a forced labor import prohibition; and (v) articles for which additional tariffs may not contribute substantially to the elimination of the acts, policies, and practices determined to be actionable in the investigations.
A full list of exempted products can be found in the Federal Register notice.
Tariff-rate quotas
The USTR plans to establish tariff-rate quotas (TRQs) for Bangladesh, Cambodia, Indonesia and Malaysia, with an initial duration of three years, to encourage the importation by each of these economies of U.S. cotton and textile goods and reduce reliance on other sources that are more likely to contain forced labor inputs.
These TRQs will exempt a specific volume of textiles and apparel, based on that economy’s total import of U.S. inputs, from Section 301 tariffs. A specific volume of textiles and apparel, based on that economy’s total import of U.S. cotton, will also be exempted.
Until the TRQs are established, imports of specific textiles and apparel from Bangladesh, Cambodia, Indonesia and Malaysia are subject to a Section 301 tariff of 10%.
According to the USTR, the TRQs are expected to take effect Sept. 1.