Intel, Ford warn proposed 12.5% forced-labour tariffs would harm U.S. supply chains
- U.S. trade officials opened July 7-9 hearings on proposed forced-labour tariffs after the USTR proposed new Section 301 duties on imports from 60 economies. (ustr.gov) - Intel, IBM, Dell, Honeywell Aerospace, Ford and GE Appliances told the USTR a proposed 12.5% duty could raise costs for U.S. manufacturing. (economictimes.indiatimes.com) - Post-hearing rebuttal comments are due five days after the hearings end, according to the USTR notice and docket schedule. (ustr.gov)
The Office of the U.S. Trade Representative opened three days of hearings in Washington on July 7 on a proposal to impose new tariffs tied to alleged forced-labour failures across 60 economies. The action stems from Section 301 investigations the agency launched on March 12 and advanced on June 2, when it said the targeted economies had failed to impose or effectively enforce bans on imports made with forced labor. (ustr.gov) USTR proposed additional duties of 10% for some economies and 12.5% for others, depending on the agency’s assessment of their import-ban regimes. The hearing schedule runs through July 9, with written comments having closed on July 6. (economictimes.indiatimes.com) ### Which companies are warning the tariffs could hit U.S. factories? Intel, IBM, Dell, Honeywell Aerospace, Ford and GE Appliances were among the companies that urged USTR to reconsider the proposed duties, according to submissions reported by the Economic Times. (ustr.gov) The companies said tariffs on inputs from countries including India could raise costs for U.S. manufacturers that depend on imported components and materials. The proposed rate that drew the sharpest business objections was 12.5%, which USTR said would apply to economies that, in its view, do not have sufficient forced-labor import prohibitions or enforcement. USTR said a lower 10% rate would apply to economies that have a prohibition, have committed to one through a reciprocal trade agreement, or have a partial regime that blocks some forced-labor goods. (ustr.gov) ### What exactly is the USTR proposing? USTR said on June 2 that all 60 investigations produced actionable findings under Section 301 of the Trade Act of 1974. The agency said 54 of the investigated economies had failed to impose and effectively enforce a forced-labor import prohibition, while six had failed to effectively enforce an existing prohibition. (economictimes.indiatimes.com) The June 2 notice also proposed a textile mechanism that would allow a certain volume of apparel and textile imports from some economies to enter at a reduced Section 301 tariff rate. The notice said the additional duties would apply to all products of the investigated economies except where exemptions listed in Annex A apply. (ustr.gov) ### Why are India and Canada pushing back? India told the United States to reconsider the proposed 12.5% tariff and disputed the basis for the forced-labour findings, according to reports on submissions filed in the USTR process. Indian industry representatives said the added duty would increase costs not only for exporters but also for U.S. manufacturers, importers, retailers and consumers. (ustr.gov) Canada said in a July 7 submission that there was “no basis” for additional Section 301 duties on Canadian goods. Ottawa said its existing import prohibition, supply-chain transparency measures, newly introduced standalone forced-labour import legislation and cooperation with the United States should shield it from the tariffs. ### How broad is this trade action? Jamieson Greer, the U.S. trade representative, said in March that the investigations covered 60 of the United States’ largest trading partners. (ustr.gov) The list reaches beyond China and includes U.S. allies and major suppliers, making the proposal a broader supply-chain issue for manufacturers that source parts globally. CNBC reported in June that the proposal covers imports from 60 economies and sets duties of up to 12.5% under Section 301. (msn.com) Reuters, via U.S. News, reported that the proposed actions include exemptions for some goods already subject to Section 232 tariffs and for North American trade that meets USMCA rules of origin. ### What happens after the hearing ends? The USTR hearing schedule says the public hearing runs from July 7 through July 9 in Washington. (cbc.ca) The Federal Register notice says post-hearing rebuttal comments are due five days after the last day of the hearing, after which the agency will decide whether to finalize, revise or withdraw the proposed duties. (ustr.gov) (cnbc.com) (ustr.gov)
