Latin American Countries Seek Exemption from Proposed U.S. Forced Labour Tariffs

  • Several Latin American countries urged the Trump administration to exempt them from proposed U.S. tariffs of 10% to 12.5%. They argued that they are working to prevent the import of goods produced with forced labour and have laws and enforcement processes in place to combat the problem.
  • The proposed tariffs are part of the Trump administration's legal process to impose Section 301 duties over alleged failures to enforce import bans on products made with forced labour. The U.S. Trade Representative (USTR) said forced labour in foreign supply chains leads to unfair competition for U.S. workers.
  • During a public hearing on the USTR’s proposal, representatives from Mexico, Peru, Guatemala and Ecuador rejected allegations that they are failing to enforce forced labour laws in their supply chains. Mexico noted the proposed tariff would unjustly punish thousands of law-abiding companies, while Peru argued there is no evidence that its exports have burdened U.S. commerce or justify such measures.
  • A separate hearing on the proposed 25% tariff on Brazilian goods under a different Section 301 investigation also concluded on Tuesday, as the USTR continued its review of potential country-specific trade measures.
  • Some U.S. steelmakers and trade groups urged the USTR to exempt imported pig iron, warning that tariffs on Brazilian pig iron could rise to 37.5% when combined with the proposed Brazil-specific duties. They argued the higher costs would place a large portion of U.S. steel production at a competitive disadvantage because pig iron is not readily available from domestic suppliers.
  • The USTR is expected to consider the comments before issuing a final determination on the proposed tariffs and any exemptions.
  • The hearings highlight that the proposed tariffs could have implications beyond trade enforcement, with both Latin American exporters and U.S. manufacturers warning that broader tariffs may disrupt regional supply chains, raise production costs and reduce competitiveness if exemptions are not granted.

Source: Reuters