Labor & Employment Law Daily Wrap Up, ECONOMIC NEWS—White House orders tariffs on imports from 60 economies, citing forced labor concerns, (Jul 27, 2026)

By Brandi O. Brown, J.D.

The move has already drawn a new lawsuit from the Liberty Justice Center, which argues that the Trump administration cannot move the same global tariff policy from one statute to another without satisfying the limits imposed by Congress.

The Trump administration has ordered an expansive new set of tariffs on imports from 60 economies, arguing that the targeted jurisdictions have failed to adequately prohibit or enforce bans on goods produced with forced labor. The move, announced Thursday in a presidential memorandum, marks one of the largest trade actions taken under Section 301 of the Trade Act of 1974 and affects a wide range of U.S. trading partners, including China, Canada, Mexico, India, Japan, South Korea, the European Union, and the United Kingdom.

U.S. trading partners have already begun criticizing the move. For example, Australia’s Trade Minister Don Farrell said the tariffs were "unjustified, inconsistent with our free trade agreement, and should be removed," arguing that Australia's measures to combat forced labor and modern slavery are "among the strongest in the world." Other countries, such as New Zealand, have echoed the argument that there is no evidence that they have failed to address forced labor concerns. Critics also have questioned whether the tariffs are likely to achieve the administration's stated goal of reducing forced labor in global supply chains.

Investigations began in March. The action stems from investigations launched by the Office of the U.S. Trade Representative (USTR) in March, only a few weeks after the Supreme Court decision limiting the administration’s use of the International Emergency Powers Act (IEEPA) as a basis for tariffs. USTR examined whether 60 economies, which collectively account for approximately 99.4 percent of U.S. imports, failed to prohibit or effectively enforce restrictions on imports made wholly or in part with forced labor. In June, the agency concluded that each economy under review had maintained practices that were unreasonable and burdened or restricted U.S. commerce, making them subject to action under Section 301.

Determinations in June and July. In June, USTR announced that it had determined, under Section 301 of the Trade Act of 1974, that the acts, policies, and practices of these 60 separate economies—related to their alleged failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor—are unreasonable and burden or restrict U.S. commerce, and are actionable.

USTR’s report, Acts, Policies, and Practices of Various Economies Related to the Failure to Impose and Effectively Enforce a Prohibition on the Importation of Goods Produced with Forced Labor, concluded that many of the countries and economies had either failed to impose and/or failed to effectively enforce a forced labor import prohibition.

Tariffs of 10 and 12.5 percent. Now, under this new presidential directive, imports from Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, and the United Kingdom will face tariffs of 10 percent. Goods from most other economies covered by the investigations will be subject to tariffs of 12.5 percent. Special calculations apply to products from the European Union, Taiwan, Japan, South Korea, and Switzerland, to account for existing tariff arrangements and trade agreements.

The administration argues that the tariff levels were calibrated to encourage governments to adopt or improve forced-labor import restrictions. According to the memorandum, several countries took steps after the investigations began, including adopting new prohibitions or making commitments through trade agreements. Those developments resulted in lower tariff rates for some economies.

White House rationale. However, the White House offered little direct evidence in the memorandum that the tariff levels themselves will lead to measurable reductions in forced labor. The memorandum repeatedly states that the tariffs are “appropriate and feasible” to eliminate the targeted practices, but it does not provide a methodology for measuring whether the tariffs will reduce forced labor or explain why the selected tariff levels were chosen over other enforcement mechanisms.

Exemptions. The memorandum also includes numerous product exemptions. USTR was directed to exclude certain raw materials, products deemed critical to the U.S. economy, goods that are not readily available from domestic producers and products whose tariff treatment could create broader economic disruptions. The exemptions underscore a recurring tension in trade policy: while tariffs are often promoted as a means of changing foreign behavior, policymakers frequently carve out products when they determine the costs to American businesses or consumers could be significant.

The administration additionally plans to establish tariff-rate quotas for textile and apparel goods from Bangladesh, Cambodia, Indonesia, and Malaysia. Under those programs, limited volumes of designated imports could enter the United States free of the new Section 301 tariffs if certain conditions are met. The White House said the quotas are intended to encourage the use of U.S.-produced cotton and textiles and reduce reliance on other suppliers that may be associated with forced labor risks.

Before finalizing the measures, USTR received more than 1,600 written comments and heard testimony from more than 100 witnesses during public hearings. According to the White House, officials considered proposals for lower tariff rates, different exemptions, and alternative approaches before recommending the final package.

State AGs’ letter. In early July, efforts were made to dissuade the USTR from taking this action. A coalition of 22 state attorneys general, joined by Connecticut Attorney General William Tong, urged USTR, in a letter, to withdraw the proposal. While emphasizing their opposition to forced labor and support for efforts to keep forced-labor goods out of U.S. supply chains, the states argued that the proposal exceeds USTR's authority under Section 301 of the Trade Act of 1974 and is unlikely to achieve its stated labor-enforcement objectives. The attorneys general contend that USTR has failed to demonstrate how the proposed tariffs would reduce forced labor. They argued that USTR failed to establish a connection between the tariff rates and the goal of eliminating forced-labor practices or to explain why tariffs of 10 percent and 12.5 percent would be appropriate across dozens of economies with different legal systems, labor-enforcement frameworks, and compliance efforts.

New lawsuit. On July 24, the same day the new Section 301 duties took effect, the Liberty Justice Center announced it had filed a lawsuit challenging the new Section 301 tariffs, arguing that the administration improperly used the trade law to preserve a broad global tariff regime after previous tariffs imposed under other authorities were struck down or allowed to expire. Representing spice importer Burlap & Barrel and watch retailer Collective Horology, the lawsuit does not dispute the importance of combating forced labor but contends that the administration failed to satisfy Section 301's legal requirements for country-specific findings and remedies. According to the complaint, USTR imposed tariffs of 10 percent or 12.5 percent on imports from dozens of economies without adequately explaining, on a country-by-country basis, the specific foreign practices at issue, how those practices burden U.S. commerce, why the selected tariff rates are appropriate, or how taxing the covered imports would lead foreign governments to change their policies.

The suit alleges that USTR transformed 60 separate investigations into what is effectively a standardized global tariff program, imposing near-uniform duties across materially different economies without a reasoned explanation for how the tariffs would address the conduct identified in each case. The plaintiffs also argue that many of the affected imports, including products sourced through transparent supply chains with no demonstrated connection to forced labor, are being swept into the tariffs without evidence that the duties will advance the administration's stated objective. The lawsuit asks the U.S. Court of International Trade to declare the tariffs unlawful, block their enforcement, and order refunds of any duties collected.

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