The Trump administration is set to implement fresh tariffs on numerous trade partners, including Canada, citing allegations of permitting goods manufactured through forced labor to enter their supply chains. This move comes as a replacement for the broad-based tariffs invalidated by the U.S. Supreme Court in February.
U.S. Trade Representative Jamieson Greer unveiled the proposed new tariffs following a meeting with Canada-U.S. Trade Minister Dominic LeBlanc in Washington. Greer emphasized the imperative for major trading partners to address the issue of importing goods made with forced labor.
The proposed 10 per cent tariff on Canadian exports would specifically target goods not complying with the rules of origin in the Canada-U.S.-Mexico Agreement (CUSMA), exempting nearly 90 per cent of Canada’s exports to the U.S. The announcement from Greer’s office implies that the new tariff would be an additional charge stacking on top of the existing 10 per cent tariff set to expire on July 24.
Under U.S. law, the president can impose tariffs on countries deemed to engage in unfair trade practices harmful to U.S. commerce. Investigations launched by the U.S. trade representative in March found that 59 countries along with the European Union failed to effectively prohibit the importation of goods produced with forced labor.
Critics have raised concerns about the fairness of the U.S. investigation, with David Henig from a Brussels-based think tank expressing skepticism over the blanket guilt assigned to all trading partners. The U.S. is accused of using the forced labor issue as a pretext to implement desired tariffs.
Apart from Canada, 15 other trading partners would face a 10 per cent tariff, while 44 countries, including Japan and South Korea, would confront a 12.5 per cent tariff. The imposition of tariffs is subject to a public comment period and review process, commencing with hearings in July.
The U.S. trade representative’s 92-page investigation report highlights Canada’s purported failure to enforce its ban on forced-labor imports. It cites minimal enforcement actions taken by Canadian authorities, contrasting it with the U.S. Customs and Border Protection’s rigorous interception of shipments violating forced labor laws.
A report by a Canadian human rights advocacy group indicates a high risk of Canadian companies benefiting from forced labor goods. However, the group has criticized the Trump administration’s tariff proposal, attributing it to circumventing the U.S. Supreme Court ruling on global tariffs.
While the Trump administration’s tariff imposition over forced labor is a recent development, concerns over the issue have been longstanding, predating Trump’s presidency. The U.S. had urged Canada and Mexico to pass laws against importing goods made with forced labor during the CUSMA negotiations in 2018. Various officials had previously expressed apprehensions regarding Canada’s enforcement of forced labor laws, fearing it provided a gateway for such products into the U.S.
