Threat of further US tariffs over forced labour concerns

This proposal impacts major trading partners, including the UK, Canada, Australia, and the EU. However, the tariff rates may vary based on whether a country has an existing ban, a partial regime, or a commitment to establish one in the future.

The EU is also included in this proposal, though its Forced Labour Regulation is not expected to take effect until December 2027. This action is being taken under Section 301 of the Trade Act of 1974, indicating that compliance with forced labour laws is increasingly being viewed as a trade, customs, and market access issue, rather than merely a concern related to environmental, social, and governance standards or supply chain risks.

What does this mean for countries importing goods and services into the US?

• New and more stringent forced labour regulations may be on the way. Jurisdictions looking to avoid being hit with fresh tariffs are likely to want to demonstrate the efficacy of their current forced labour laws. Jurisdictions without these laws may look to implement them in the near future to circumvent potential tariffs.
• We have already seen this in practice, with El Salvador having recently announced a new customs control provision related to the import of goods. This requires importers to declare, under oath, that imported goods were not made with forced or child labour. False declarations may lead to the retention of goods or the refusal of clearance.

What this means for your organisation

• New and more stringent forced labour regulations have a direct impact on organisations. On top of ensuring compliance with existing requirements (CSDDD, Modern Slavery Act), companies should ensure preparedness for jurisdictions responding to Trump’s latest tariff threat.
• Preparing involves ensuring that your current due diligence processes are robust, risk-based and capable of withstanding increased scrutiny from both regulators and trade authorities. This includes strengthening core due diligence elements such as supply chain visibility and stakeholder engagement to ensure a rapid and compliant response to tightening enforcement expectations.