New Delhi: Citing New Delhi’s failure to take action against trade in goods manufactured by forced labour, the US Trade Representative Tuesday proposed a 12.5 percent additional tariff on exports from India, along with 53 other countries.
The USTR proposed a 12.5 percent tariff on all products emanating from the economies it has found to be weak in enforcing the prohibition of trade on goods made by forced labour. This group includes China, Vietnam, the United Kingdom, Brazil, Japan, and Switzerland.
For countries, including Pakistan, that have “imposed a partial regime with the effect of preventing the importation of certain forced labour goods”, the USTR proposes an additional 10 percent tariff. This latter group also includes Canada, Mexico, the European Union, and Taiwan.
“The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field,” said Jamieson Greer, the US Trade Representative, after the publication of the findings of the investigations into 60 economies, including India, by his office.
The USTR opened investigations into at least 60 economies on 12 March 2026 to determine whether these countries have failed to impose and effectively enforce a prohibition on importation of goods produced with forced labour and whether the same can face penalties under US law, specifically Section 301 of the Trade Act of 1974.
The publication of the report comes at a time when an American delegation led by Brendan Lynch, the US Assistant Trade Representative, is in India and holding discussions with senior government officials to finalise the bilateral trade agreement between New Delhi and Washington DC.
The new proposed tariffs are likely to impact the final architecture of any bilateral trade agreement, as India has maintained that such a deal will be accepted as long as the terms give New Delhi a competitive advantage in its exports to the US.
The two countries had announced a framework for an interim deal in February. However, following the US Supreme Court striking down the tariffs imposed by President Donald J. Trump under the International Emergency Economic Powers Act (IEEPA), the USTR launched investigations under different legislations including the prohibition of trade in goods manufactured by forced labour.
India has been cooperating with the investigations, participating in confidential government-to-government consultations with the US. Nevertheless, the report finds that India “has failed to impose and effectively enforce a forced labour import prohibition”. New Delhi is one of 54 economies investigated by the USTR to have failed to impose and effectively enforce such a prohibition.
“In section IV, we found that the failure to impose and effectively enforce a forced labor import prohibition is unreasonable. In section V, we found that the failure to impose and effectively enforce a forced labor import prohibition burdens or restricts US commerce. For the foregoing reasons, the results of this investigation indicate that the acts, policies and practices of India related to the failure to impose and effectively enforce a forced labor import prohibition are unreasonable and burden or restrict U.S. commerce,” the findings of the report said.
Under Section 301 of the Trade Act of 1974, the USTR is empowered to investigate any acts, policies and practices of foreign governments to identify whether they are discriminatory in nature against American trade.
If the USTR finds that discriminatory trade practices do exist under Section 301, it may propose additional remedies, including imposition of tariffs on the foreign countries. The Section 301 investigation is the latest step by the Trump administration to be able to impose its tariff architecture on imports into the US markets, following the striking down of the original global tariffs by the US Supreme Court.
The current tariff rates are proposals made by the USTR subject to review. The USTR is set to hold hearings over its findings on 7 July 2026, while public responses to the findings are allowed till 6 July.
(Edited by Nardeep Singh Dahiya)
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