Mint explainer: What do the new US forced labour tariffs mean for India and global trade?

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The US has imposed fresh tariffs on imports from 60 trading partners under Section 301 of the Trade Act of 1974, claiming the countries have failed to impose and effectively enforce prohibitions on the importation of goods produced with forced labour.

The action, announced by US Trade Representative (USTR) Jamieson Greer at the direction of President Donald Trump, follows investigations, public hearings and consultations with trading partners. India is among the countries subject to a 10% tariff under the new framework. The action covers the top 60 US trading partners, which account for 99.4% of US imports. Mint explains:

The US has imposed new Section 301 tariffs on imports from 60 economies following investigations into what it says is their failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labour. According to the USTR, the measure is intended to address what it describes as both a human rights abuse and a distortive trade practice affecting US commerce.

The US, according to the Trump administration, has prohibited imports made with forced labour for nearly a century and rigorously enforces that prohibition. The administration argues that many trading partners have not adopted or effectively enforced similar import bans, allowing goods produced with forced labour to remain in global supply chains.

Greer said the action is intended to begin correcting what he described as both a human rights abuse and a trade practice that distorts competition, while encouraging trading partners to adopt and effectively enforce prohibitions on imports made with forced labour.

The USTR has determined that a 10% Section 301 tariff will apply to investigated economies that impose a forced labour import prohibition, have committed to impose and enforce such a prohibition through an Agreement on Reciprocal Trade, or have imposed a partial regime with the effect of preventing the importation of certain forced labour goods. Certain products from the European Union, Japan, South Korea, Switzerland and Taiwan will face tariffs of 10% or 12.5%, net of the most-favoured-nation (MFN) tariff rate, depending on the product. All other economies under investigation will be subject to a 12.5% Section 301 tariff.

While the USTR has not specified the category under which India has been classified, the country has been placed in the 10% tariff bracket alongside Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, and the UK.

Yes. The USTR has announced several product exemptions. These include informational materials, donations and accompanied baggage, as well as all articles and parts of articles already subject to Section 232 tariffs.

Exemptions have also been provided for raw materials where tariffs could lead to the unavailability of domestic supply, products that could cause economy-wide disruptions, products that cannot be grown or produced in sufficient quantities or at reasonable prices in the US or obtained from other sources.

Exemptions have also been provided for certain products from Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, Indonesia, Jordan, Malaysia, Switzerland, Taiwan and the UK that could encourage these economies to fulfil commitments regarding forced labour import prohibitions or enact and effectively enforce such prohibitions, and articles for which the tariffs may not contribute substantially to eliminating the practices identified in the investigations.

The announcement comes even as India and the US continue negotiations on a broader bilateral trade agreement. In February, the two countries agreed to a framework under which tariffs on Indian exports would be reduced from 50%—including a 25% penalty linked to India's purchase of Russian oil...