Government

USTR proposes sweeping forced labor tariffs amid IEEPA duty refunds

By Eric Johnson

The US Trade Representative( USTR) has proposed tariffs of between 10 % and 12.5 % on 60 trading partners for allegedly failing to impose and enforce forced labor laws, claiming that the failure to do so has advantaged imports over US domestic production.

The proposed tariffs, which would be authorized under Section 301 of the Trade Act of 1974, came just 10 weeks after the USTR announced investigations into trading partners that generate 99 % of US imports. And the move represents the latest attempt by the Trump administration to levy widespread tariffs after the Supreme Court in February ruled the April 2025 implementation of tariffs under the International Emergency Economic Powers Act( IEEPA) was illegal and directed US Customs and Border Protection( CBP) to refund those duties.

The Section 301 investigation segmented those 60 trading partners into two categories: 54 economies that have failed to impose a program to curtail forced labor, and six economies that have those regulations on the books but have allegedly failed to adequately enforce them. The affected trading partners include China, Mexico, Canada, Vietnam and the EU.

“ The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable,” USTR Jamieson Greer said in a statement.“ This creates a dynamic where American workers are forced to compete globally on an unlevel playing field. We will no longer tolerate this disparity.”

The USTR is proposing a 10 % forced labor duty on economies that“ impose a forced labor import prohibition, that have committed to impose and enforce such a prohibition through an agreement on reciprocal trade, or economies that have imposed a partial regime with the effect of preventing the importation of certain forced labor goods.”

All other economies will face a 12.5 % forced labor duty. Trade experts are unclear as to whether those economies lacking what the USTR considers adequate protections against forced labor will see a so-called“ stacking” of 301 tariffs and would thus face the 10 % as well as the 12.5 % tariffs.

CBP and DHS have 180 days to create enhanced methods to fight duty evasion and other customs noncompliance. Mark Van Scyoc / Shutterstock. com

US bolsters customs enforcement of small and foreign importers

By Mark Szakonyi

US President Donald Trump has signed an executive order strengthening customs enforcement by enhancing requirements and scrutiny on importers, particularly smaller businesses and those based abroad.

The executive order, signed June 3, will raise bonding requirements for importers of record( IORs) and require them to show they aren’ t shell companies by disclosing domestic assets. The order also places increased scrutiny on“ foreign” IORs, including not allowing them to make informal customs entries, which are typically used for lowvalue shipments.

The order targets small, infrequent importers that are largely unknown to US Customs and Border Protection( CBP), as well as importers using diversions from one country to another to reduce their duty exposure.

Importers will also be required to share volume forecasts with CBP, although the frequency of those forecasts was not disclosed.

“ Customs reform is long overdue. Systemic inefficiencies, loopholes, insufficient enforcement mechanisms, and outdated processes have created opportunities for malign actors to evade federal law,” Trump’ s order read.“ Examples of noncompliance include undervaluing imports, withholding critical information about IORs and the goods being imported, and avoiding payment of duties through various arrangements and schemes.”

The executive order requires US importers to show they have a physical US presence, generate business activity, and hold domestic assets. Importers will also be required to provide more detailed information— including proof of beneficial ownership and more exact product specification— and provide to the CBP within 90 days the identical paperwork given to customs agencies at the country of origin.

The order also calls for CBP to not allow relief from penalties over 50 % of the assessed value and limit repeat offenders’ ability to challenge penalties.

26 Journal of Commerce | July 6, 2026 www. joc. com