US Proposes New Tariffs Over Forced Labor

• US is using Section 301 authority to propose new tariffs on countries failing to enforce forced labor bans.
• The process involves investigations, public hearings, and negotiations, leading to a two-tiered tariff system (10% and 12.5%).
• The renegotiation of USMCA is likely to extend past the July 1st deadline, creating prolonged uncertainty for businesses.
• The administration aims to encourage more US production by making cross-border business more complicated.

The US is proposing new tariffs on 60 nations, citing forced labor violations, under Section 301 authority. This new, legally durable process involves lengthy investigations and bilateral negotiations, replacing previous temporary tariffs. The move creates significant uncertainty for US companies, particularly in the auto and agricultural sectors, potentially leading to increased domestic production.