US proposes up to 12.5% tariff on India, 59 other economies over forced labour import curves

The USTR has proposed imposing additional tariffs on goods imported from the economies under review and has opened a public consultation process to seek feedback on the measures.

The United States Trade Representative (USTR) has proposed trade measures against 60 economies, including India, citing their failure to impose and effectively enforce prohibitions on the import of goods produced with forced labour.

In a statement issued on Tuesday, the USTR said it had concluded under Section 301 of the US Trade Act of 1974 that the acts, policies and practices of the 60 economies are "unreasonable and burden or restrict US commerce", making them actionable under American trade law.

India is one of 54 economies identified by the USTR as having failed to adequately impose and enforce prohibition on the import of goods produced through forced labour. The list also includes several other countries, including Australia, Bahrain, Bangladesh, China, Japan, Kuwait, Saudi Arabia, Singapore, the United Kingdom and the United Arab Emirates.

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

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Additional duties in proposal 

Following its determination, the USTR has proposed imposing additional tariffs on goods imported from the economies under review and has opened a public consultation process to seek feedback on the measures.

According to the agency, countries that have already implemented or pledged to implement bans on imports linked to forced labour may be subjected to an additional 10% tariff, while those without such measures could face a 12.5% duty. The agency has also proposed a separate mechanism for certain textile and apparel imports.

The investigations were initiated on March 12 this year. The USTR said it reviewed testimony from nearly 60 witnesses and received about 500 submissions during the public consultation process before reaching its findings.

According to the USTR, the lack of robust bans on imports made with forced labour weakens global efforts to eradicate the practice, creates unfair market advantages through lower-cost production, disadvantages businesses that adhere to ethical labour standards, and allows existing trade restrictions to be bypassed.

This development comes at a crucial juncture in India–US economic ties, as both countries are working to finalise the first phase of a bilateral trade agreement. Over recent months, officials from New Delhi and Washington have held several rounds of negotiations, focusing on key issues such as market access, tariff reductions, digital trade and agricultural trade.

Despite continuous trade tensions, the United States remains India's largest trading partner. 

Goods trade between the two countries has surpassed $120 billion in recent years, with both governments repeatedly reaffirming their commitment to strengthening economic and commercial relations.

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