US proposes 10%-12.5% tariff on goods from 60 countries, including Bangladesh over forced labour failures

The Trump administration on Tuesday (2 June) proposed imposing additional duties of 10% or ​12.5% on imports from 60 economies after determining that their failure to curb trade in ‌goods made with forced labour is unreasonable and restricts US commerce.

The proposal from the US Trade Representative's office (USTR) is the latest finding from a Section 301 unfair trade practices investigation to be released as the Trump administration seeks to ​rebuild its emergency tariffs, which were struck down by a US Supreme Court decision in ​February, Reuters reports.

The USTR said it determined that it would impose 10% duties related to ⁠the forced labour investigation on imports from Canada, Ecuador, the European Union, Indonesia, Mexico, Pakistan, Argentina, Bangladesh, ​Cambodia, El Salvador, Guatemala, Malaysia, Taiwan and Britain.

The trade agency said it would impose additional duties ​of 12.5% on the remaining 45 countries that it investigated.

"The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable," US Trade Representative Jamieson Greer said in a statement. "This creates ​a dynamic where American workers are forced to compete globally on an uneven playing field."

Reacting to the news, Fazlee Shamim Ehsan, executive president of BKMEA and president of the Employers Federation of Bangladesh, told TBS, "There is no justification for imposing this new tariff on Bangladesh, as the country is not among those accused of using forced labour.

"They are trying to use tariffs as a tool. This will ultimately harm the free market economy and the global economy."

The USTR said ​it was also proposing a textile mechanism that would allow for a certain volume of apparel and textile imports ‌to enter the US at a reduced tariff rate, though the duties and volumes were not disclosed, according to the Reuters report.

The announcement comes ahead of the 24 July expiration of a 10% temporary tariff imposed by the Trump administration on 10 February, the day the Supreme Court struck down US President Donald Trump's tariffs under the International ​Economic Emergency Powers Act.

The trade agency ​is also expected to soon unveil the findings of another major Section ​301 probe into ⁠the buildup of excess industrial capacity in 16 trading partners, including China.

The USTR said it would accept public comments on the proposed tariffs and other remedies through 6 July, with a public ​hearing scheduled for 7 July.

Dr Mohammad Abdur Razzaque, the chairman of Research and Policy Integration for Development - RAPID), told TBS, "It is unfortunate that a matter as universally important as the eradication of forced labour is being addressed through a unilateral trade investigation. This approach of the US appears to establish a new benchmark not grounded in any widely accepted international legal obligation."

Bangladesh has long supported international efforts to eliminate forced labour and remains committed to strengthening labour standards and enforcement, he mentioned.

"However, the present USTR proposal raises important conceptual, legal and practical questions that warrant careful consideration, particularly given its potential implications for developing countries and for the broader rules-based trading system," Razzaque added.

Bangladesh should support the objective but challenge the conceptual basis of the USTR framework, he said, adding, there is an important distinction between prohibiting forced labour itself, which is widely recognised under ILO conventions and domestic legal systems, and imposing a dedicated border measure that bans imports allegedly linked to forced labour. Bangladesh can argue that the latter represents one regulatory instrument among several and that its absence should not automatically be regarded as an unreasonable trade practice.

"Bangladesh should pursue a dual-track diplomatic strategy. On one track, we should work with other affected economies, including developing and advanced countries, to argue for proportionality, recognition of alternative regulatory approaches through international consensus, adequate transition periods, etc.

"On the other track, Bangladesh should maintain close bilateral engagement with Washington and present a credible domestic reform roadmap. Such a roadmap could include legal review, customs enforcement improvements, supply-chain due diligence measures, labour-inspection strengthening, and institutional coordination," Razzaque further said.

Bangladesh needs to project itself as reform-oriented and cooperative while avoiding unnecessary concessions or confrontation, he opined.

"It has been a matter of concern that the USTR proposal reflects a growing tendency to use tariff threats to advance regulatory norms that have not been established through multilateral agreement. While combating forced labour is a legitimate and widely shared objective, making market access conditional on a specific US-preferred regulatory model risks weakening the MFN-based trading system and further fragmenting global trade governance," Razzaque concluded.