The U.S. Trade Representative on Tuesday proposed additional tariffs on imports from 60 economies, citing their failure to impose or enforce prohibitions on goods made with forced labor. For apparel and textile sourcing managers, the plan carries a two-tier structure: economies with existing or partial forced labor import bans — Canada, Mexico, the E.U., Taiwan, and the U.K. among them — would face a 10% duty, while the remaining group, which includes China, India, Japan, South Korea, and Australia, would face 12.5%.

The proposal also includes a quota-based textile mechanism that would allow apparel and textile imports from certain economies to enter the U.S. below the standard tariff rate. Energy, pharmaceuticals, beef, coffee, and certain fruits and vegetables are exempt from the duties altogether.

The findings come out of a Section 301 investigation covering 60 economies. Fifty-four of them had no forced labor import prohibition whatsoever. The remaining six — Canada, Ecuador, the E.U., Indonesia, Mexico, and Pakistan — had adopted relevant laws or commitments but fell short on enforcement, according to USTR's determination.

"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," U.S. Trade Representative Jamieson Greer said in a statement. "We will no longer tolerate this disparity."

The duties are not yet in force. The proposal must clear a public review process first, with the comment period closing July 6 and an open hearing set for the following day. Sourcing and compliance teams have roughly a month to file comments on how the rates, the quota mechanism, and the exemption lists would affect their import programs.

The move reflects the administration's turn to Section 301 authority to rebuild a broad tariff regime after the Supreme Court struck down duties previously levied under the International Emergency Economic Powers Act. A 10% across-the-board import levy invoked under Section 122 of the Trade Act had filled the gap, but that measure is slated to lapse in July — a timing detail that makes the new Section 301 track the administration's intended replacement vehicle.

The rollback of the IEEPA duties has already moved real money through the system. The federal government has cleared $35.5 billion in tariff refunds for importers following the Supreme Court's February ruling, covering more than 8 million import entries through a CBP portal launched in April.

Trading partners pushed back immediately. The European Commission declared the duties had no legitimate basis and reaffirmed its intention to honor the trade accord it reached with Washington, Reuters reported. Australia's trade ministry argued that any import taxes applied to Australian goods run contrary to the bilateral free trade agreement between the two countries, according to Bloomberg. China rejected both the forced labor characterization and the remedy, disputing the existence of forced labor on Chinese soil and condemning unilateral tariff actions broadly.

For importers, the near-term calculus is straightforward. The proposed rates would stack onto landed-cost models that have already absorbed the short-lived 10% Section 122 levy and the legal whiplash of the IEEPA refunds. The quota-based textile mechanism, if finalized as proposed, would create a new allocation question for apparel buyers sourcing from eligible economies — one that will depend on the quota volumes, eligibility criteria, and administration details USTR has yet to spell out.

Whether the two-tier rates survive the review process intact, and how the forced labor enforcement findings translate into CBP actions at the border beyond duties, will become clearer after the July 6 comment deadline and the July 7 hearing.