US ‘forced labour’ tariffs ‘intolerable at any rate’: first of a series

Summary

The Office of the United States Trade Representative (USTR) announced on July 23 it would impose tariffs of 10 or 12.5 percent on 60 economies under its Section 301 investigation into 'forced labour', and added 43 Chinese companies to its Entity List. The investigation, launched March 12, covers trade accounting for 99.4 percent of total US trade; on June 2, the USTR determined that the relevant economies were engaging in unreasonable practices. The tariffs take effect from July 24, with exemptions for some agricultural products and medical supplies to avoid supply shortages.

US Secretary of State Marco Rubio previously pushed for the 'Uyghur Human Rights Policy Act', paving the way for suppressing Xinjiang products. The article criticises the US for using the 'forced labour' label to carry out trade bullying, aiming to dominate global supply chains, and notes that yielding will only whet the appetite of hegemony. China opposes unilateralism and will take necessary measures to protect the rights and interests of its enterprises.

Commentary

The US Trade Representative has imposed 10 or 12.5 percent tariffs on 60 economies under the guise of 'forced labour'. New Zealand, already enforcing import bans on such goods, falls into the 10 percent group, with the levies applying from July 24. This will directly lift export costs for local small and medium-sized enterprises, particularly straining traditional strengths such as dairy and meat products – New Zealand sends about 15 percent of its exports to the US, half of which are agricultural goods, and businesses with thin margins may struggle to absorb the additional tariffs.

From a global perspective, the US is embedding unilateral labour standards into trade rules, forcing partner countries to adjust domestic enforcement. New Zealand, though it has legislated a ban on forced-labour goods, may face more frequent compliance checks and supply-chain traceability demands, adding hidden costs. The US has exempted its own scarce electronics and medical components, underscoring the protectionist nature of the move, while agricultural exports gain little such flexibility.

At the same time, the US has added 43 Chinese companies to the Entity List; firms relying on Chinese raw materials or components should carefully assess transit-trade risks. Exporters are advised to promptly review product origin and labour compliance with logistics and legal teams, use NZ-US FTA channels to voice concerns, and pursue greater market diversification to reduce the shock from policy shifts in a single market.

Keywords: forced labour, Section 301 tariffs, US Trade Representative, Entity List, trade bullying, supply chains, Xinjiang, unilateralism, China countermeasures, tariff exemptions

Source: Global Times