US Proposes 12.5% Tariff on Indian Imports Over Forced Labor

The United States has proposed an additional 12.5% tariff on imports from India, citing the country's alleged failure to enforce bans on goods made with forced labor, according to multiple reports. This move is part of a broader investigation into unfair trade practices under Section 301 of the Trade Act of 1974.

The proposal comes as U.S. and Indian trade officials engage in three days of talks in New Delhi. The U.S. Trade Representative's office stated that India, along with 59 other economies, has failed to impose and effectively enforce a forced labor import prohibition, creating an 'unlevel playing field' for American workers.

According to Reuters, the proposed tariffs are part of broader U.S. pressure tactics amid ongoing trade negotiations between India and the United States. The Indian government plans to raise concerns about these measures during the talks, seeking potential relief as part of a two-way trade deal.

The USTR report also identified India as an intermediary in cotton supply chains linked to Chinese forced-labour inputs. Ajay Srivastava, founder of Global Trade Research Initiative, suggested that the findings could be challenged, noting that the investigation focused on whether India blocked imports tied to forced labor elsewhere rather than on Indian exports themselves.

The proposed tariffs are not immediate and will be subject to public comment and review. The USTR has requested written comments by July 6, followed by public hearings. This announcement follows the expiration of a temporary 10% tariff imposed in February after the Supreme Court struck down previous emergency tariffs.

Additionally, the Trump administration announced a proposed 25% tariff on several Brazilian imports, citing unfair trade practices related to digital trade, electronic payment services, and other issues. U.S. Trade Representative Jamieson Greer stated that Brazil's policies burden or restrict U.S. commerce. The tariffs would exempt beef, coffee, aircraft equipment, rare earth metals, and some fruits and vegetables.

The administration has launched Section 301 investigations on more than a dozen countries since February, following the Supreme Court's ruling that previous tariffs were illegal. The USTR is scheduled to hold a public hearing on July 6, with Brazil having until July 15 to address the outlined issues.