The Trump administration is set to impose fresh tariffs on numerous trade partners, Canada included, citing allegations of permitting goods manufactured through forced labor to enter their supply chains. This action comes as the administration’s response to the U.S. Supreme Court’s rejection of broad-based tariffs in February.
U.S. Trade Representative Jamieson Greer unveiled the proposed tariffs late Tuesday following a meeting with Canada-U.S. Trade Minister Dominic LeBlanc in Washington. Greer expressed dissatisfaction with key trading partners for not addressing the issue of importing goods made under forced labor conditions.
Greer is advocating for a 10 percent tariff on exports from Canada, targeting goods that do not adhere to the rules of origin outlined in the Canada-U.S.-Mexico Agreement (CUSMA). This move would exempt nearly 90 percent of Canadian exports to the U.S. from the tariff. The official announcement describes it as an additional tariff, possibly stacking on top of the existing 10 percent tariff on non-CUSMA compliant Canadian exports set to expire on July 24.
Under U.S. law, the president can levy tariffs on countries deemed to engage in unfair trade practices detrimental to U.S. commerce. The U.S. trade representative launched investigations in March involving 59 countries and the European Union to determine if they effectively prohibited goods produced through forced labor. The subsequent declaration stated that all 60 entities failed to meet the criteria, raising concerns about the fairness of the U.S. investigation into forced labor practices.
David Henig, a policy director at a Brussels-based think tank, questioned the blanket condemnation of all trading partners, labeling it as implausible and preposterous. He suggested that the forced labor issue is being exploited as a pretext to impose desired tariffs.
Apart from Canada, 15 other trading partners face a 10 percent tariff, including the European Union, the U.K., Argentina, El Salvador, Bangladesh, and Pakistan. The remaining 44 countries, such as Japan, Singapore, India, South Korea, and Vietnam, could face a higher tariff rate of 12.5 percent.
The imposition of tariffs is subject to a public comment and review period, with hearings scheduled to begin in July. The U.S. trade representative’s 92-page investigation report highlights Canada’s alleged failure to effectively enforce its ban on forced labor imports, with minimal enforcement actions reported by Canadian authorities.
The report contrasts Canadian enforcement efforts with U.S. Customs and Border Protection actions, indicating a significant disparity in interception rates of suspected forced labor shipments. The U.S. trade representative also referenced a 2021 report by Above Ground, a Canadian human rights group, as evidence of potential profiteering from forced labor goods in Canada.
Karen Hamilton, the director of Above Ground, criticized the Trump administration’s tariff strategy, suggesting it is driven more by circumventing legal hurdles than genuine concerns over forced labor. She expressed concerns that the tariffs could hinder efforts to combat forced labor effectively and protect workers’ rights.
While the move to impose tariffs is recent, U.S. discontent over forced labor practices predates the current administration. Past events, including negotiations leading to the CUSMA agreement, highlighted U.S. pressure on Canada to enact laws banning goods produced by forced labor. Additionally, concerns have been raised by lawmakers from both political parties regarding Canada’s enforcement of such laws.
