The Trump administration has launched an investigation into whether 60 countries, including major U.S. trading partners, have failed to impose and effectively enforce bans on imported goods made with forced labor, giving firms in those economies an artificial cost advantage.
The Section 301 investigation specifically targets top trading partners Canada, China, the European Union and Mexico, along with dozens of other countries touching every major region of the global economy, per a March 12 Federal Register filing from the Office of the U.S. Trade Representative.
Canada, the EU, Mexico and other countries have adopted measures to stop the importation or sale of products made with forced labor, according to the USTR. However, none has effectively enforced a prohibition on forced labor imports to date, the filing says.
"The failure to prevent trade in products produced with forced labor may negatively affect U.S. commerce," the filing says. "In markets without forced labor import prohibitions, U.S. exports are required to compete with products produced wholly or in part with forced labor, including products that have been denied entry to the U.S. market and subsequently re-exported."
U.S. Trade Representative Jamieson Greer said in an interview with CNBC that the administration is trying to move quickly with the investigation and others like it.
"We're trying to move in a matter of months, and with that, we can try and resolve some of these issues that have been plaguing the global trading system for many years, and we're finally trying to solve," Jamieson said, adding that if issues were not resolved sufficiently, the U.S. may impose tariffs.
The USTR has opened a docket for public comments on the investigation, with a hearing scheduled for April 28.
The forced-labor probe came a day after the administration started a Section 301 investigation into the policies of numerous countries to assess potential structural excess capacity and production in the manufacturing sector and the impact on domestic industries.
The Trump administration has already used Section 301 probes to review the trading practices of individual countries, such as Brazil and Nicaragua. The latter investigation resulted in tariffs.
Last month, Greer confirmed the administration’s plans to institute additional probes following a Supreme Court ruling that wiped out many tariffs implemented last year.
Immediately after the ruling, President Donald Trump set a new global surcharge at 10% and then said he planned to increase it to 15%, without providing a timeline. Regardless of the rate, the global levies will expire 150 days after implementation unless Congress extends them.
