What Is Forced Labour? Why Is US Threatening Tariffs On 60 Countries, Including India?

The United States has proposed new trade measures against 60 economies, including India, China, Japan, the United Kingdom and Australia, over concerns that these countries have not done enough to prevent imports made with forced labour. The move, announced by the US Trade Representative (USTR), could lead to additional tariffs of up to 12.5% on goods entering the United States and has sparked debate over labour standards, global supply chains and international trade rules.

At the centre of the dispute is a question many people are asking: What exactly is forced labour, and why is the US taking action against dozens of countries over it?

What Is Forced Labour?

Forced labour refers to work or services that people are compelled to perform against their will through threats, coercion, intimidation, debt bondage, withholding of wages, confiscation of identity documents, or other forms of pressure.

According to international labour standards, workers cannot freely leave such employment because they face punishment, financial penalties, violence, or other serious consequences. Forced labour can occur in industries ranging from agriculture and mining to manufacturing, construction and textiles.

Labour rights groups and international organisations have long argued that forced labour allows some producers to keep costs artificially low, giving them an unfair advantage over companies that follow legal labour practices.

Why Is the US Targeting 60 Economies?

The USTR conducted investigations into 60 economies and concluded that many governments either do not ban imports made with forced labour or fail to enforce existing restrictions effectively.

Under Section 301 of the US Trade Act of 1974, the agency determined that these practices are "unreasonable" and burden US commerce. This finding allows Washington to consider trade actions, including higher import duties and other restrictions.

The United States argues that goods produced using forced labour enter global supply chains at lower costs, making it harder for American companies and workers to compete fairly.

US Trade Representative Ambassador Jamieson Greer said:

"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."

Which Countries Are Affected?

The investigation identified 54 economies, including India, China, Japan, Brazil, Australia, Saudi Arabia and the United Kingdom, as failing to impose and effectively enforce prohibitions on forced labour imports.

Another six economies, including Canada, Mexico, Indonesia, Ecuador and the European Union, were found to have existing restrictions but insufficient enforcement mechanisms.

The USTR's proposed tariff structure reflects this distinction.

Countries with some form of prohibition or commitment to address forced labour imports could face an additional 10% tariff.

Countries without such measures could face an additional 12.5% tariff on exports to the United States.

Why Is India on the List?

According to the USTR, India is among the countries that have not imposed and effectively enforced restrictions on imports linked to forced labour.

The US believes stronger measures are needed to ensure that goods connected to labour exploitation do not enter international supply chains.

India, however, has rejected the allegations and urged Washington to end the investigation. Indian officials have argued that such issues should be discussed within the framework of ongoing bilateral trade negotiations rather than through unilateral tariff actions.

The issue comes at a delicate time, as New Delhi and Washington continue negotiations on a broader trade agreement covering tariffs, market access, digital trade and agriculture.

How Could This Affect Global Trade?

The US argues that weak enforcement against forced labour distorts markets by allowing cheaper production methods and creating unfair competition.

Washington also claims that products linked to forced labour can bypass restrictions through third countries and complex supply chains, making enforcement more difficult.

To address concerns about supply chain disruptions, the USTR has proposed a separate mechanism for textile and apparel imports. This would allow a limited quantity of certain products from selected economies to enter the US at lower tariff rates.

The proposal remains under consultation. Public comments can be submitted until July 6, while hearings are scheduled for July 7. The final outcome could include tariffs, quotas or other trade restrictions under Section 301.

What Happens Next?

The proposal is not yet final. The consultation process will allow governments, businesses, industry groups and labour organisations to present their views before Washington decides whether to impose the measures.

For India, the development adds another layer of complexity to trade discussions with its largest export market. While both countries continue to emphasise stronger economic cooperation, the forced labour dispute could become a significant issue in future negotiations.

As the debate unfolds, the controversy highlights the growing intersection of trade policy, labour rights and global supply chains, areas that are increasingly shaping economic relations between major economies.