The US imposed import tariffs under the guise of labor issues, which was met with joint rebuttal from multiple countries.
2026-06-04 10:39:16
On Wednesday (June 3), the Office of the United States Trade Representative released a new tariff proposal, which, citing the need to prevent the influx of forced labor goods, proposes a tiered tariff system based on Section 301. This system aims to fill the gap left by the global tariff scheme that was previously repealed by the Supreme Court. The implementation of the tiered tariff system immediately drew collective questioning and opposition from major global trading economies such as the European Union, the United Kingdom, and Canada, causing further turbulence in the multilateral trade landscape.
Based on the progress of labor regulations implementation in various countries, the U.S. has divided 60 economies worldwide into two tax tiers. Among them, 15 economies, including the EU, the UK, Canada, and Mexico, which have already introduced relevant regulations, will be subject to a uniform 10% tariff on imported goods; the remaining 45 economies will be subject to a higher import tariff rate of 12.5%.
In an official statement, U.S. Trade Representative Jamieson Greer said that it is unacceptable that our most important trading partner has failed to address the issue of imports of goods manufactured using forced labor, and that this move is intended to eliminate unfair cross-border competition faced by domestic workers.
To mitigate the impact of tariffs on domestic supply chains, the USTR has simultaneously established an exemption mechanism. Categories already subject to Section 232 national security tariffs, such as automobiles, steel, aluminum, and copper, are directly excluded from the tariff scope. Goods originating from Canada and Mexico within the USMCA Free Trade Area are also exempt from the new regulations. The 76-page special exemption list includes key commodities such as Brent crude oil, rare earth metals, fresh agricultural and livestock products, raw pharmaceutical materials, and aerospace components.
Canadian Prime Minister Mark Carney stated that Canada and the United States share the goal of eliminating forced labor, but he noted that Canadian goods will largely remain unaffected by the new tariffs due to these exemptions.
The new regulations are still in the public consultation period, and all sectors can submit written opinions before July 6. The US will hold a public hearing on July 7 to finalize the implementation details. The Trump administration's 10% temporary tariff will officially expire on July 24, and the new regulations are designed to fill the gap left by the old tariff.
The proposal immediately sparked protests from trade departments in many countries. The European Commission was the first to speak out, stating that the tariffs lacked legal basis and violated the tariff ceiling agreement reached by both sides last year. Bernd Lange, chairman of the European Parliament's Trade Committee, said that given the EU's forced labor ban law will be implemented in 2024, the results of the US investigation were "utterly absurd."
The UK's trade department revealed that it is continuing consultations with the US, arguing that since the UK has already implemented comprehensive anti-forced labor laws, the previously agreed tariff preference agreements should remain in effect. India has also initiated bilateral negotiations, raising numerous questions regarding the legitimacy of the Section 301 investigation procedures.
Helene de Rengerve, a staff member at Human Rights Watch, stated that forced labor is a problem in all countries and exists across all industries. No country is entirely immune, including the United States. Targeting specific countries based solely on trade volume is questionable and could even be counterproductive.
Many multinational business leaders have also admitted that the vague tax classification standards will significantly increase compliance costs and management challenges in the global supply chain.
Overall , this new tariff policy is a practical move by the United States to restructure tariff barriers under the guise of labor issues. The design of tiered tariffs combined with exemption clauses not only fills the tariff gap previously rejected by the courts but also mitigates the risk of domestic inflation by exempting key raw materials. However, in the context of a global trend towards trade liberalization, the US's unilateral rule-making trade protectionist practices have encountered joint resistance from many countries. Subsequent countermeasures and negotiation progress from various countries may continue to disrupt global commodity and cross-border trade trends.
Two tariff tiers for different economies, with a wide range of exemption lists.
Based on the progress of labor regulations implementation in various countries, the U.S. has divided 60 economies worldwide into two tax tiers. Among them, 15 economies, including the EU, the UK, Canada, and Mexico, which have already introduced relevant regulations, will be subject to a uniform 10% tariff on imported goods; the remaining 45 economies will be subject to a higher import tariff rate of 12.5%.
In an official statement, U.S. Trade Representative Jamieson Greer said that it is unacceptable that our most important trading partner has failed to address the issue of imports of goods manufactured using forced labor, and that this move is intended to eliminate unfair cross-border competition faced by domestic workers.
To mitigate the impact of tariffs on domestic supply chains, the USTR has simultaneously established an exemption mechanism. Categories already subject to Section 232 national security tariffs, such as automobiles, steel, aluminum, and copper, are directly excluded from the tariff scope. Goods originating from Canada and Mexico within the USMCA Free Trade Area are also exempt from the new regulations. The 76-page special exemption list includes key commodities such as Brent crude oil, rare earth metals, fresh agricultural and livestock products, raw pharmaceutical materials, and aerospace components.
Canadian Prime Minister Mark Carney stated that Canada and the United States share the goal of eliminating forced labor, but he noted that Canadian goods will largely remain unaffected by the new tariffs due to these exemptions.
The new regulations are still in the public consultation period, and all sectors can submit written opinions before July 6. The US will hold a public hearing on July 7 to finalize the implementation details. The Trump administration's 10% temporary tariff will officially expire on July 24, and the new regulations are designed to fill the gap left by the old tariff.
Multiple countries have spoken out, with the EU directly stating that the US investigation's conclusions lack legal basis.
The proposal immediately sparked protests from trade departments in many countries. The European Commission was the first to speak out, stating that the tariffs lacked legal basis and violated the tariff ceiling agreement reached by both sides last year. Bernd Lange, chairman of the European Parliament's Trade Committee, said that given the EU's forced labor ban law will be implemented in 2024, the results of the US investigation were "utterly absurd."
The UK's trade department revealed that it is continuing consultations with the US, arguing that since the UK has already implemented comprehensive anti-forced labor laws, the previously agreed tariff preference agreements should remain in effect. India has also initiated bilateral negotiations, raising numerous questions regarding the legitimacy of the Section 301 investigation procedures.
Helene de Rengerve, a staff member at Human Rights Watch, stated that forced labor is a problem in all countries and exists across all industries. No country is entirely immune, including the United States. Targeting specific countries based solely on trade volume is questionable and could even be counterproductive.
Many multinational business leaders have also admitted that the vague tax classification standards will significantly increase compliance costs and management challenges in the global supply chain.
Overall , this new tariff policy is a practical move by the United States to restructure tariff barriers under the guise of labor issues. The design of tiered tariffs combined with exemption clauses not only fills the tariff gap previously rejected by the courts but also mitigates the risk of domestic inflation by exempting key raw materials. However, in the context of a global trend towards trade liberalization, the US's unilateral rule-making trade protectionist practices have encountered joint resistance from many countries. Subsequent countermeasures and negotiation progress from various countries may continue to disrupt global commodity and cross-border trade trends.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
