In brief
On 2 June 2026, the United States Trade Representative (hereinafter “USTR”) published an official notice communicating the outcome of 60 trade investigations initiated pursuant to Section 301 of the Trade Act of 1974. All 60 investigated economies — including the European Union and the United Kingdom — were found to have failed to prohibit or effectively enforce a ban on the importation of goods produced with forced labour. In light of such findings, the USTR has proposed the imposition of new tariffs:
- of 12.5% for those countries that have failed to establish a ban on the importation of goods produced through forced labour practices, or
- of 10% for those that have not yet rendered effective and enforceable an existing import ban, or that have only partially implemented bans relating to forced labour practices.
The European Union was found to have failed to render effective and enforceable the existing ban on the import/export of goods obtained through forced labour practices. Indeed, Regulation (EU) 2024/3015, which prohibits products made with forced labour from being placed on the Union market, although already in force, will only apply from 14 December 2027.
1. What is Section 301 of the Trade Act of 1974?
Section 301 of the Trade Act of 1974 authorises Congress to confer upon the USTR the power to conduct investigations and adopt measures (for example, the imposition of tariffs) aimed at enforcing the rights of the United States under trade agreements and at countering certain foreign trade practices.
An investigation under Section 301 may be initiated where the rights of the United States under a trade agreement are being denied, or where an act, policy or practice of a foreign government is burdening or restricting US trade. The statute does not circumscribe the scope of investigations and defines the term “trade” so as to include services and investments as well.
On 12 March 2026, following the US Supreme Court’s ruling declaring the IEEPA tariffs unlawful, the USTR’s office initiated two investigations:
- One concerning the “Forced Labor and Import Policies of U.S. Trading Partners”;
- Another concerning “Structural Excess Capacity and Production in Manufacturing Sectors“.
2. The outcome of the “Forced Labor and Import Policies of U.S. Trading Partners” investigations
The outcome of the investigations led the USTR to conclude that, of the 60 jurisdictions investigated, 54 had failed to establish a ban on the importation of goods produced through forced labour practices, while 6 had failed to render effective and enforceable an existing import ban.
Specifically, the USTR concluded that products originating from jurisdictions that have established (but not enforced) a ban on the importation of goods produced with forced labour — including the European Union — or from those that have undertaken specific commitments in their respective Reciprocal Trade Agreements or have established a partial regime with the effect of preventing the importation of certain goods produced with forced labour — such as the United Kingdom — shall be subject to an additional import tariff into the United States of 10%.
For all other economies, the USTR proposes an additional tariff rate of 12.5%.
The Trade Representative also proposes a mechanism for the textile sector that would allow a certain volume of apparel and textile imports to enter the United States at a reduced tariff rate under Section 301.
3. The European Union and the application of Regulation (EU) 2024/3015 (the so-called Forced Labour Regulation)
The European Union’s position in the USTR proceedings intersects significantly with the European regulatory framework on forced labour. The EU has already adopted Regulation (EU) 2024/3015 of the European Parliament and of the Council of 27 November 2024 (“the Regulation”), which establishes rules prohibiting economic operators from placing on or making available on the Union market, or exporting from the Union market, products made with forced labour, with a view to improving the functioning of the internal market and contributing to the fight against forced labour.
However, although the Regulation entered into force on the day following its publication in the Official Journal — namely 13 December 2024 — it will only apply in practice from 14 December 2027.
It is precisely this lack of effective applicability that led the USTR to propose a 10% tariff for the EU, criticising the absence of concrete enforcement activity.
4. What does the EU’s Forced Labour Regulation provide?
Regulation (EU) 2024/3015 establishes a prohibition on economic operators operating within the European Union from introducing into the Union market, making available therein, or exporting to third countries, products whose manufacture has involved the use of forced labour.
The concept of “forced labour” relevant for the purposes of the Regulation coincides with that elaborated in Article 2 of the Forced Labour Convention of 1930, adopted within the International Labour Organization; as specified in Article 2 of the Regulation, this notion also encompasses instances of forced child labour.
The material scope of the prohibition extends to products in respect of which forced labour has constituted, even only partially, a mode of employment at any stage of the production cycle, including the stages of extraction, harvesting, processing and manufacturing, as well as all ancillary activities and processes throughout the entire supply chain.
For companies, this entails not only the duty to analyse their own internal policies on worker protection, but above all, to verify through adequate due diligence that their partners in the supply chain (e.g. suppliers and subcontractors, including those established in third countries) comply with local regulations and do not engage in forced labour practices.
The Regulation also sets out a structured procedural process consisting of three successive phases, aimed at ascertaining and sanctioning conduct in breach of the prohibition laid down in Article 3, the conduct of which is entrusted to the competent national authorities designated by each Member State.
To date, as noted above, the prohibitions set out in the Regulation will apply from 14 December 2027, but it cannot be ruled out that — also in light of the outcome of the investigations just concluded by the United States and the risk of tariff imposition — this date may be brought forward by the Union.
5. What should affected operators do?
- Monitor the developments of the Section 301 proceedings and any tariff measures that may result therefrom.
- Request to be heard by the USTR by 7 July 2026 or submit written comments to the same Office in order to bring to light enforcement activities/regulations that were not taken into account during the investigation.
- Map supply chains to identify suppliers and countries at risk of forced labour.
- Establish internal due diligence, information gathering and record-keeping systems, in anticipation of potential investigative requests from the competent authorities.
For further information, please contact:
Nicolò Cusimano, Partner, Bird & Bird
nicolo.cusimano@twobirds.com
