Noise, Conflation, Obfuscation: The New US Forced-Labor Tariffs

So much noise, conflation, and obfuscation.

The noise. The United States announces it is imposing tariffs of 12.5% and 10% on 59 countries and the European Union under Section 301 of the U.S. Trade Act of 1974, for failing to stop trade in goods made with forced labor.

The reality. Section 301 gives the president the power to impose tariffs as a means to counter unfair trade practices that harm U.S. businesses. Forced labor (aka slavery) is only one form of unfair practice — but it certainly grabs the headlines. In fact, the Trump administration imposed Section 301 tariffs on the EU in 2019 as part of a long-running dispute before the World Trade Organization about EU subsidies for Airbus; these were dropped by the Biden administration in 2021.

The conflation. Although the use of forced labor in Chinese prisons is well documented, the threat of sanctions against developed economies — the EU, the UK, Canada, Australia, and Japan — conflates goods made with forced labor with a failure to monitor and enforce supply-chain transparency. In fact, the EU, the UK, Canada, Germany, and Australia have all passed laws in recent years that specifically address the interrelationship between forced labor and supply-chain transparency. None of these countries use forced labor the way China does.

The obfuscation. The U.S. already has laws to keep goods produced with forced labor out of the country: Section 307 of the Tariff Act of 1930 prohibits goods made by convict and/or forced labor, and the Uyghur Forced Labor Prevention Act, adopted in 2021, specifically addresses forced labor in China. Section 301 is simply another attempt by the Trump administration to impose tariffs after the U.S. Supreme Court ruled in February that the International Emergency Economic Powers Act of 1977 does not authorize the president to impose tariffs, and the U.S. Court of International Trade ruled in early May that the administration could not use Section 122 of the 1974 Trade Act for tariffs either.

The actual news. These Section 301 tariffs threaten to blow up the already fragile agreement the U.S. and the EU negotiated in the summer of 2025, which the European Parliament agreed to only two weeks ago. An additional 10% tariff on top of the 15% rate already agreed — plus the allegation of tolerating forced labor — could easily be a deal breaker for the EU.