US Forced Labour Tariffs on 60 Nations Face Legal Challenges, GTRI Finds

Differential tariffs imposed by the United States on 60 countries under Section 301 of the US Trade Act for forced labour are likely to face legal challenges, according to trade experts and findings by GTRI in Chennai. The assessment comes as earlier reciprocal and punitive tariffs imposed by the US administration were previously struck down by the US judiciary.

The U.S. Trade Representative's (USTR) forced-labour determinations issued on July 23, 2026, indicate that imports from 60 economies face extra duties. A total of 17 economies, including India, Canada, the United Kingdom, Bangladesh, and Pakistan, will face a 10% tariff, while the remaining 43 economies will be subject to a 12.5% tariff.

Section 301 of the US Trade Act of 1974 was created to address specific unfair trade practices of trade partners that harm US commerce. GTRI noted that tariffs imposed under Section 301 are expected to reflect actual violations and be applied consistently across countries. However, determinations suggest the Trump administration is using Section 301 to preserve recent trade agreements and advance broader trade policy goals.

Under the policy, countries face varying tariff treatment depending on whether they signed a trade agreement with the United States in the past two years. Experts state that this departure from the traditional use of Section 301 is likely to face legal challenges in court. A prior court ruling on reciprocal tariffs eliminated the basic premise on which the US administration negotiated trade deals with several economies, including India.

Although the USTR found that the European Union, Japan, South Korea, Taiwan, and Switzerland failed to adequately address forced labour, it granted them preferential treatment. The EU and Taiwan face a combined Most Favoured Nation (MFN) plus Section 301 tariff ceiling of 10%, while Japan, South Korea, and Switzerland face a 12.5% ceiling. Products with MFN tariffs below those levels pay only enough Section 301 duty to reach the ceiling, while products at or above the ceiling pay no additional duty.

India, which has not signed a trade deal with the US yet, will pay the normal US MFN tariff plus the full 10% Section 301 duty. In contrast, EU exports pay only enough Section 301 duty to bring the total tariff to 10%.