US Proposes New Tariffs on India, 59 Nations Over Forced Labour Concerns

New Delhi: The United States Trade Representative (USTR) has proposed major trade action against 60 countries and economies, including India, stating that these countries have not implemented effective restrictions on the import of goods allegedly made with forced labor.

What did the US say?

The US agency has proposed imposing additional tariffs, calling them harmful to American trade and industry. This development comes at a time when negotiations are ongoing between India and the US to finalise a bilateral trade agreement.

"The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field," US trade representative ambassador Jamieson Greer said in the statement.

Proposal for action against 60 economies?

The Office of the USTR said in a statement on Tuesday that after an investigation under Section 301 of the US Trade Act of 1974, it concluded that the policies and practices of 60 economies are adversely affecting US trade. According to the USTR, these countries' failure to effectively prevent the importation of products made with forced labor is harming US businesses. Therefore, these cases are actionable under US trade law.

Is India included in the list?

India is among 54 countries and economies classified by the USTR in this category. The list also includes countries like Australia, Bahrain, Bangladesh, China, Japan, Kuwait, Saudi Arabia, Singapore, the United Kingdom, and the United Arab Emirates. US Trade Representative Jamieson Greer stated that the failure of major US trading partners to prevent imports of products made with forced labor is unacceptable. 

He said this exposes American workers to unequal competition in the global marketplace.

Proposal to levy additional fees?

Based on the findings of the investigation, USTR has proposed imposing additional tariffs on products from the countries concerned. According to the agency, countries that have implemented or committed to ban products made with forced labor could face additional tariffs of up to 10 per cent. Additional tariffs of up to 12.5 per cent are proposed for other countries. Separate measures have also been proposed for certain imports related to the textile and apparel sectors.

When did the investigation begin?

The USTR stated that the investigation was initiated on March 12. During the investigation, approximately 60 witnesses were interviewed and approximately 500 comments were received during a public consultation process. After considering all these aspects, the agency has formulated its conclusions.

Did USTR explained the reasons for action?

The US agency stated that the lack of effective restrictions on imports of products made with forced labor undermines efforts to eliminate labor exploitation globally. According to the USTR, this creates an unfair advantage for low-cost products, impacts market competition, and harms companies that do not use forced labor. It also increases the potential for circumvention of existing restrictions.

Did proposal came amid India-US trade talks?

This proposal comes as India and the US are working towards finalizing the first phase of a bilateral trade agreement. Several rounds of talks have taken place between officials in New Delhi and Washington over the past few months. Market access, tariffs, digital trade, and agriculture have been among the key issues discussed in these talks.