What is Trump's forced labor tariff plan and how does it work

What the new forced-labor tariff plan actually is

The Trump administration is finalizing a new set of duties on imported goods from roughly 60 trading partners, justified on the grounds that those countries are not doing enough to keep forced labor out of their supply chains. The proposed rates are 10% or 12.5%, depending on the country, according to Bloomberg and the Australian Broadcasting Corporation (ABC). A U.S. Trade Representative (USTR) panel has spent the week hearing in-person testimony from more than a dozen foreign governments, business owners and industry groups.

The legal vehicle is Section 301 of the Trade Act of 1974, a statute that lets the USTR investigate foreign practices deemed to violate trade agreements or harm U.S. commerce, and impose retaliatory duties. As The Hill notes, the Trump administration used Section 301 in its first term to impose tariffs on China and the European Union, and those duties have survived multiple court challenges. No previous administration, however, has used the provision across such a broad group of countries.

Why the administration is reaching for a new rationale

The change of legal basis is a direct response to the Supreme Court’s decision earlier in 2026 to strike down the so-called reciprocal tariffs that Trump had imposed under the International Emergency Economic Powers Act (IEEPA), according to The Hill. With IEEPA off the table, the White House moved to a temporary 10% global tariff under Section 122 of the Trade Act, which is also approaching expiration. The forced-labor investigation was launched, The Hill reports, “just after” Trump vowed to find ways around the court ruling.

In other words, the policy goal — maintaining higher duties on imports — has remained constant; what is changing is the legal scaffolding. Edward Aldean of the Council on Foreign Relations called the forced-labor framing a “transparently cynical effort” and a “pretext to maintain tariffs that the administration believes has been effective,” as quoted by The Hill. USTR Jamieson Greer, by contrast, told reporters this week that the international community’s failure to act on forced labor has created “a dynamic where American workers are forced to compete globally on an unlevel playing field” (ABC).

How big the duties are, and who is pushing back

The proposed tariff levels are significant. ABC reports that Australia faces the higher 12.5% rate, while the United Kingdom, Bangladesh, Cambodia, Malaysia, Pakistan and Indonesia would all receive the lower 10% rate — even though several of those countries are rated worse than Australia in the U.S. State Department’s annual Trafficking in Persons Report. Australia has lodged a formal submission through its embassy in Washington arguing there is “no credible evidentiary basis” for the finding against it, pointing out that its own Trafficking in Persons rating is the best possible. The Business Council of Australia is pushing for product-level exemptions, including for steel and aluminum already covered by national-security tariffs, for goods with no meaningful domestic U.S. alternative, for products supporting resilient supply chains, for items where tariffs would impose disproportionate costs on U.S. buyers, and for products covered by the “Nairobi Protocol” on assistive technology for people with disabilities.

Senator Ron Wyden, the senior Democrat on the Senate Finance Committee, said the new tariffs are “ill-designed to combat forced labor globally,” according to Bloomberg, reflecting congressional skepticism even from members who might otherwise support anti-forced-labor measures.

Part B — Why it matters and the bigger picture

Why it matters: legal durability and consumer costs

The stakes go beyond trade diplomacy. Section 301 is the only major tariff authority that has so far consistently survived judicial review, which is why the administration is steering cases into it. If courts accept the forced-labor rationale, the duties are likely to stick; if they read it as a backdoor attempt to restore the IEEPA tariffs the Supreme Court rejected, the duties could be paused or struck down. Alan Wm. Wolff of the Peterson Institute for International Economics, cited by The Hill, predicts courts will view this as “another attempt to transfer the full tariff power from Congress to the president” — language that signals a serious constitutional fight ahead.

For U.S. households and firms, the costs are concrete. The Tax Foundation estimates cited by The Hill show that when the IEEPA tariffs were in force in 2025, the average U.S. tariff rate climbed to 7.7%, up from 2.4% in 2024. With IEEPA tariffs replaced by the temporary 10% global duty, the average effective rate is expected to be 5.3% this year; if Section 301 duties in the 10–12% range are layered on, The Hill says, a similar average is plausible. A recent New York Federal Reserve study, cited by The Hill, concludes that U.S. households and firms “overwhelmingly bear the burden of tariffs,” contradicting the administration’s repeated claim that foreign exporters pay. Public opinion polling also reported by The Hill shows Americans disapprove of Trump’s tariffs by 60% or more.

How we got here: from Liberation Day to a Section 301 reshuffle

The arc matters because it explains why this particular statute is being repurposed. Trump announced his original “Liberation Day” tariff regime in April 2025, The Hill notes, and since then U.S. tariff policy has changed more than 50 times, according to the Tax Foundation. The Supreme Court’s February 2026 ruling against IEEPA tariffs forced a reset; the Section 122 stopgap filled the gap; and the Section 301 forced-labor investigation is now being readied as the durable replacement. Section 301 was used against China and the EU in Trump’s first term and survived review, which is why USTR is willing to test it across 60 countries at once — a scale that, as The Hill points out, is unprecedented.

Where the reporting agrees, diverges, and leaves gaps

The sourcing is consistent on the basic mechanism: Section 301, 60 countries, rates of 10% or 12.5%, and a USTR hearing process underway. Where sources diverge is in framing. Bloomberg and Wyden emphasize that the tariffs are poorly designed as a labor-policy tool; the USTR, as quoted by ABC, argues they are a necessary response to an uneven playing field; the Council on Foreign Relations, via The Hill, calls the rationale a “pretext”; and the Australian government flatly disputes the evidentiary basis. These are not minor differences — they go to whether the policy is a genuine anti-trafficking measure or a workaround for lost legal authority.

What remains unconfirmed is the timing of a final USTR decision. ABC says the office “has not yet made a final decision” on the proposed tariffs. The Hill also notes that the Section 122 stopgap is “set to expire soon,” but neither outlet specifies an exact date. The list of countries facing the 12.5% rate versus the 10% rate is also not fully public beyond the partial list reported by Australia and ABC. Whether any country will negotiate down before implementation, as several did after Liberation Day, is an open question.

Different angles: winners, losers, and the political calculation

The political logic, as The Hill explains, is partly domestic: tying tariffs to forced labor may draw support from Democrats and labor unions that have otherwise been critical of the administration’s trade policy. That is a calculation with mixed odds. Trade-sensitive U.S. importers — including Australian beef exporters, medical-device makers such as Cochlear, and biotech firms represented by AusBiotech — are pushing hard for carve-outs. Foreign governments with high Trafficking in Persons ratings, such as Australia and the UK, argue they are being penalized more than countries with worse records, a point The Hill and ABC both underscore. Allied governments are also frustrated that the duties would override existing free-trade agreements, including the U.S.-Australia FTA cited in Australia’s submission.

A separate but related question is what happens with IEEPA going forward. As CNBC reports, USTR Greer said this week that even though the Supreme Court blocked IEEPA-based tariffs, it “highlighted that IEEPA clearly says you can prohibit trade” in narrower ways — a comment Greer made while discussing Trump’s threat to cut off trade with Spain over NATO defense-spending disputes. That suggests IEEPA may be repurposed for country-specific trade embargoes, even if it cannot sustain broad tariff regimes. The Spain episode, however, appears to have cooled after Trump met Prime Minister Pedro Sánchez.

What to watch next

Three concrete milestones will shape what happens. First, the USTR’s final decision on the Section 301 forced-labor tariffs, expected after this week’s hearings conclude — the Australian submission and similar filings from more than a dozen other countries will feed into that decision. Second, the expiration of the Section 122 stopgap tariff, which The Hill flags as imminent; if Section 301 is not finalized in time, the administration will need yet another legal bridge. Third, any court challenge to the Section 301 application, where the test case from the European Union — which argues its forced-labor rules are stricter than U.S. rules, per The Hill — is likely to be closely watched, alongside potential legal action from Australia and others. Watch also for product-level carve-outs in the final USTR determination, particularly for steel, aluminum and Nairobi Protocol goods, which would signal how narrowly the duties will actually be applied in practice.