USTR opens Section 301 forced labor probe targeting 60 nations

The investigation was launched days after the Supreme Court struck down the Trump administration's broad global tariffs imposed under the International Emergency Economic Powers Act. The Congressional Research Service analyzed the connection explicitly, noting that the Section 301 forced labor investigation and a companion investigation into excess industrial capacity in 16 economies could provide an alternative statutory basis for economy-specific tariffs similar in scope to the IEEPA tariffs that were invalidated.

USTR Ambassador Jamieson Greer indicated at the outset of the investigations that he intends to finalize determinations by July 2026, coinciding with the expiration of a temporary 10 percent tariff. The tight timeline and the breadth of economies covered signal that the administration is preparing to use the Section 301 framework as a replacement mechanism for tariff pressure on trading partners.

Witnesses at the April 28-29 hearings represented a broad range of perspectives. Human rights advocates, including Martina Vandenberg of the Human Trafficking Legal Center and Adrian Zenz of the Victims of Communism Memorial Foundation, urged strong import restrictions on goods associated with forced labor in China's Xinjiang region. Industry groups including the Consumer Technology Association and the Forced Labor Working Group cautioned against broad tariffs that could restrict imports unrelated to forced labor, arguing for targeted, evidence-based measures.

Foreign government representatives from Peru, India, Vietnam, Indonesia, Pakistan, and Egypt testified at the hearings, representing some of the 60 investigated economies. Their testimony reflected efforts to demonstrate their countries' existing forced labor prohibitions and enforcement measures, which could be relevant to USTR's country-by-country determinations.

The United States Customs and Border Protection already has 54 withhold release orders and 8 findings that prohibit specific goods from entering the U.S. market because they are made with forced labor. Section 307 of the Tariff Act of 1930 prohibits importing goods made with forced labor. The Section 301 investigation goes further, targeting not the specific goods themselves but the foreign governments' failure to have equivalent enforcement systems.

NYU Stern's Business and Human Rights Center analyzed the strategic value and limitations of the Section 301 forced labor approach, noting that it expands U.S. leverage beyond targeted sanctions to systemic pressure on trading partners' domestic law and enforcement systems. Critics caution that broad tariffs may harm workers in countries where legitimate supply chains coexist with forced labor without adequately targeting the forced labor itself.

The 60 economies investigated include close allies and trading partners alongside countries with well-documented forced labor systems. The list includes Canada, the European Union, the United Kingdom, Israel, Japan, South Korea, Australia, and New Zealand, alongside China, Russia, Vietnam, Cambodia, and others. The inclusion of allies involves a strategy of universal coverage rather than targeted designation, though the determinations are expected to result in different levels of findings for different economies. The Section 301 investigation is one of two initiated in March 2026.

The companion investigation covers excess industrial capacity in 16 economies. Both investigations could independently justify economy-specific tariff regimes, and the forced labor investigation's scope is broader. PwC's analysis described the combined investigations as one of the most expansive uses of U.S. trade law in recent history, potentially compounding exposure for businesses importing from any of the covered economies.

USTR has requested consultations with all 60 governments under Section 303(a) of the Trade Act, a mandatory step before making final determinations. The consultations process allows trading partners to negotiate commitments on forced labor enforcement before the USTR imposes trade measures. Several economies have already signed bilateral reciprocal trade agreements with the U.S. that include forced labor prohibitions, though the Section 301 investigation focuses on whether those commitments are being effectively enforced.

The Congressional Research Service noted that if USTR makes affirmative determinations and imposes tariffs, the resulting tariff regime could be similar in scope to the IEEPA tariffs that the Supreme Court struck down, effectively giving the administration a statutory route to broad tariff pressure that does not rely on emergency powers. The CRS analysis emphasized that the Trade Act of 1974 provides more established legal authority for such measures than IEEPA's national emergency framework.

Under USMCA, Mexico and Canada have explicit obligations to investigate and ban imports made with forced labor, obligations that parallel U.S. domestic law. The inclusion of both countries in the Section 301 investigation indicates the U.S. intends to apply reciprocal scrutiny even to USMCA partners.

Buchanan Ingersoll's trade law analysis noted that Canadian and Mexican businesses face compounding risk from both the forced labor investigation and the companion excess capacity investigation, as supply chains through both countries touch economies under investigation for both grounds. Post-hearing rebuttal comments were due within seven days of the last hearing day, and USTR had indicated it would publish a full hearing transcript after the proceedings. The final determinations, expected by July 2026, would then trigger formal decisions on whether to impose trade measures and, if so, what form they would take.