On June 2, 2026, the Office of the United States Trade Representative (USTR) announced the findings of its trade investigation into 60 economies for failing to prohibit and enforce restrictions on the importation of goods produced with forced labor. USTR Ambassador Jamieson Greer proposed tariffs of 10% or 12.5% depending on the findings for each country. On July 23, Ambassador Greer announced the finalization of those proposed tariffs on the 60 economies of trading partners effective July 24, 2026.
Background
On February 20, 2026, the same day the United States Supreme Court held the administration’s tariffs imposed under the International Emergency Economic Powers Act of 1977 (IEEPA) unconstitutional, President Trump directed the Office of the USTR to initiate investigations in certain trade practices pursuant to section 301 of the Trade Act of 1974 (Trade Act).
On March 12, 2026, the USTR announced investigations into 60 economies (59 countries and the European Union) for failing to impose and/or enforce laws prohibiting the importation of goods manufactured with forced labor.
The USTR noted that, although most trading partners prohibit forced labor practices as a matter of law, “[I]n the absence of forced labor import prohibition that is effectively enforced, firms can continue to source, use, and profit from imported products produced with forced labor, even if the forced labor is prohibited domestically.”
On April 28 and 29, the USTR held public hearings on the investigation.
June 2 Announcement of Findings
On June 2, the USTR announced its findings that all 60 economies failed to either establish policies prohibiting the importation of goods produced with forced labor or to enforce such prohibitions. The USTR asserts these failures “burdens or restricts U.S. commerce and are thus actionable under section 301(b) of the Trade Act.” The USTR published a full report that documents its findings.
Ambassador Jameisone Greer stated:
“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,” Greer said. “We will no longer tolerate this disparity. Some trading partners have taken initial steps to prevent the importation of forced labor goods, including through USCMA and commitments in Agreements of Reciprocal Trade. However, each of our trading partners must do more to ensure that trade does not perversely encourage and entrench forced labor globally.”
The USTR’s proposed response to the findings is the imposition of tariffs as follows:
- 10% on imports of certain goods for those economies that have partial preventive regime and
- 12.5% for all other economies included in the investigation
The USTR has solicited comments through July 6, 2026, and will hold hearings on July 7, 2026.
July 23 Announcement of Findings
The finalized tariffs align with the USTR’s proposed response. They apply to the top 60 U.S. trading partners and cover 99.4% of all U.S. imports, per a USTR Fact Sheet.
The 10% tariff regime will apply to those economies that:
- Imposes forced labor import prohibitions,
- Have committed to imposing forced labor import prohibitions, or
- Have imposed a partial regime that prevents certain goods created with forced labor from being imported.
Economies that lack even a partial regime, or that have not committed to imposing one, are subject to the 12.5% tariff.
In practical effect, these two tariff rates are to be applied such that the tariffs on select goods from the respective economy do not exceed 10% or 12.5% when calculated in aggregate with most-favored nation (MFN) tariffs. For example:
For product of the European Union or Taiwan, where such product’s MFN tariff is less than 10%, the Trade Representative shall impose a section 301 tariff pursuant to these investigations so that the sum of the MFN tariff and the section 301 tariff shall be 10 percent, and where such product’s MFN tariff is greater than or equal to 10 percent, the Trade Representative shall impose a section 301 tariff of zero.
There are exemptions to certain goods across the economies which can be found in the annex of the notice in the Federal Register.
Other News on Section 301 Trade Investigations
On March 11, the day before the aforementioned Section 301 investigation was opened, the USTR opened a 301 investigation into 16 economies “relating to structural excess capacity and production in manufacturing sectors.” No recommendations have been issued yet, though we expect them shortly.
On May 29 the USTR opened a section 301 investigation of Vietnam to determine whether Vietnam’s “persistent failure to resolve long-standing concerns about intellectual property * * * protection and enforcement is unreasonable or discriminatory and burden or restricts U.S. commerce.”
On June 1 the USTR determined that certain of Brazil’s “acts, policies, and practices related to digital trade and electronic payment services; unfair, preferential tariffs; anti-corruption enforcement; intellectual property protection; ethanol market access; and illegal deforestation are unreasonable and burden or restricts U.S. commerce.” On July 15, Ambassador Greer imposed 25% tariffs on certain goods from Brazil.
Your Guide Forward
Cherry Bekaert has a cross-functional team of professionals to help advise and support our clients with the downstream effects of tariffs and tariff refunds on tax, accounting, audit and financial reporting functions.
If you have questions about preserving your rights or about any other legal or trade implications that may exist, we recommend reaching out to appropriate legal counsel.
Related Insights
- Alert: IEEPA Tariff Refund Update: Refunds on Final Liquidated Entries in Controversy
- Webinar Recording: IEEPA Tariff Refunds: What Taxpayers Should Know Regarding Accounting, Audit and Tax
- Alert: Second U.S. Customs and Border Protection Update Filed in Euro-Notions
- Alert: U.S. Court of International Trade Finds Section 122 Tariffs Unauthorized
