On June 2, 2026, the Office of the United States Trade Representative (USTR) announced that the White House seeks to impose new Section 301 tariffs on 86 countries – including 59 countries and the European Union – following the conclusion of its investigation into the enforcement, or lack thereof, of bans on imports produced with forced labor.

Section 301 of the Trade Act of 1974 provides statutory authority for the USTR to impose trade sanctions on countries that violate U.S. trade agreements or engage in "unjustifiable" or "unreasonable" acts that burden U.S. commerce.

Over the next 30 days, stakeholders will have the opportunity to suggest changes to the scope of the action. For companies that import from, source in, or rely on supply chains connected to the covered jurisdictions, the proposed tariffs will increase costs and disrupt sourcing strategies. Submitting a comment now may be the best – and only – opportunity to advocate for the exclusion of certain products from the scope of the tariffs. 

Miller & Chevalier's Customs team is well positioned to assist companies in evaluating the potential impacts of these developments and preparing for the changes ahead.

The Investigation 

On March 12, 2026, following the Supreme Court's decision invalidating President Trump's tariffs imposed under the International Emergency Economic Powers Act (IEEPA), the Office of the U.S. Trade Representative (USTR) announced the initiation of an investigation into 60 economies for their alleged failure to adopt and effectively enforce prohibitions on the importation of goods produced with forced labor.

In its report, USTR concludes that such failures distort global market conditions by permitting goods produced with forced labor to enter international commerce at artificially low costs. According to USTR, this practice disadvantages U.S. companies that adhere to fair labor standards. USTR further determined that the lack of effective forced labor enforcement constitutes an unreasonable practice that burdens U.S. commerce within the meaning of Section 301, thereby providing the legal basis for the proposed tariff measures.

Proposed New Tariffs

The investigation identified two cohorts of countries for which the USTR proposed new tariffs of 10 percent and 12.5 percent (respectively the Forced Labor Tariffs). For the following 40 countries (13 countries and the European Union), the proposed new tariff is 10 percent: 

• Canada; Ecuador; the European Union; Indonesia; Mexico; Pakistan; Argentina; Bangladesh; Cambodia; El Salvador; Guatemala; Malaysia; Taiwan; and the United Kingdom.

According to the Federal Register notice, these countries have either imposed a forced labor import prohibition, undertaken commitments in reciprocal trade deals to ban forced labor importations, or imposed a partial regime with the effect of preventing the importation of certain forced labor goods. The USTR nonetheless found that they have not effectively enforced such prohibitions. 

For the following 46 countries, the proposed new tariff is 12.5 percent: 

• Algeria; Angola; Australia; the Bahamas; Bahrain; Brazil; Chile; China; Colombia; Costa Rica; Dominican Republic; Egypt; Guyana; Honduras; Hong Kong; India; Iraq; Israel; Japan; Jordan; Kazakhstan; Kuwait; Libya; Morocco; New Zealand; Nicaragua; Nigeria; Norway; Oman; Peru; the Philippines; Qatar; Russia; Saudi Arabia; Singapore; South Africa; South Korea; Sri Lanka; Switzerland; Thailand; Trinidad and Tobago; Türkiye; United Arab Emirates; Uruguay; Venezuela; and Vietnam.

According to the Federal Register notice, these countries have not imposed or effectively enforced forced labor importation prohibitions. 

Under Section 301, the USTR must still hold a public hearing and receive comments on the proposed action.¹ That hearing is scheduled for July 7, 2026. 

Based on previous comments from Ambassador Greer, it is likely that the tariffs will be enacted by July 24, 2026, in time for the expiration of the Section 122 Tariff, enacted under the Trade Act of 1974. 

Proposed Exemptions

The USTR proposed a list of exempted Harmonized Tariff Schedule of the United States (HTS) codes in Annex A to the report. It applies to all investigated countries. 

Specifically, Annex A exempts:

• Products subject to Section 232 Tariffs. 
• United States-Mexico-Canada Agreement (USMCA)-compliant goods of Canada or Mexico.
• Textiles and apparel articles that comply with the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR). 
• Informational materials, donations, and accompanied baggage.

As proposed, Annex A does not exempt various Chapter 98 codes that allow companies to import goods duty-free (e.g., the agricultural provisions in headings 9817.00.50 and 9817.00.60).

In all other aspects, the list of proposed excluded products is the same as the list of products currently exempted from the Section 122 Tariff. 

New "Textile Mechanism" 

The USTR is proposing a special "textile mechanism" that would allow for a certain volume of apparel and textile imports to enter the United States at a reduced Section 301 tariff rate. Under the proposal, the volume of reduced-duty imports from certain trading partners would be equivalent to the quantity of exports of textiles (e.g., U.S. produced man-made and cotton fiber textile inputs) from the United States to that trading partner. 

Opportunity to Advocate for More Exclusions or a Reduced Rate

The USTR asked stakeholders to provide comments on whether products should be retained or removed from the scope of Annex A, and for features of the "textile mechanism." Companies should consider using this opportunity to advocate for modifications on the scope of covered products. 

• On the issue of whether a specific HTS code should be included in Annex A (and therefore exempted from the tariff), the notice asks that comments address whether the products are: 
  • Necessary raw materials that if subject to the proposed additional tariffs could lead to the unavailability of domestic supply; 
  • Whether additional tariffs would cause serious dislocations in the supply of the products and could cause economy-wide disruptions or other similar factors; and 
  • Whether imposing additional tariffs on the products would be practicable or effective in obtaining the elimination of the investigated acts, policies, and practices.
• Other questions include: 
  • Views on the features of a proposed textile mechanism, including the U.S. and foreign products to be covered, the relative market opportunities for each side, and the tariff rate (if any) to be applied to products subject to the mechanism.
  • Views on whether a mechanism similar to the proposed textile mechanism should be considered for other sectors.

Pending Issues

• In the case of products from China, Brazil, and Nicaragua, it is unclear how these new Section 301 tariffs will stack with the existing Section 301 tariffs imposed by other investigations.
• Likewise, it is unclear how/whether these the Forced Labor Tariffs will stack with any tariffs imposed under other Section 301 investigations (e.g., the Investigation on Structural Excess Capacity).
  • We expect to receive more clarity on these two issues when CBP publishes a Cargo Systems Messaging Service (CSMS) message, clarifying changes to Chapter 99. The CSMS is CBP’s standard communication channel with brokers and importers. 
• More broadly, this new action signals a continued prioritization of forced labor enforcement by the Trump administration and may, over time, incentivize trading partners to strengthen their own import prohibitions – potentially driving more robust global enforcement and increasing compliance expectations for importers.

If you are considering submitting comments to the USTR, Miller & Chevalier's Customs & Import Trade team is available to assist with strategy, data development, and drafting. Our team is also ready to assist companies with strengthening supply chain due diligence practices to navigate import prohibitions on forced labor as they expand globally. Please contact the authors of this alert or any other attorney in our Customs & Import Trade practice for further information.

For more information, please contact:

Richard A. Mojica, rmojica@milchev.com, 202-626-1571

Nate Lankford, nlankford@milchev.com, 202-626-5987

Igor Sampley dos Santos, isampleydossantos@milchev.com, 202-626-6077

¹See 19 U.S.C § 2414(b)(1)(A) ("Before making the determinations required under subsection (a)(1), the Trade Representative [] shall provide an opportunity (after giving not less than 30 days notice thereof) for the presentation of views by interested persons, including a public hearing if requested by any interested person")

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