The U.S. Trade Representative (USTR) has proposed tariffs of either 10% or 12.5% on imports from Canada, Mexico, the European Union, and dozens of other trading partners. USTR has said these countries have not done enough to prevent goods made with forced labor from entering U.S. markets. Each country’s rate depends on USTR's assessment of its current enforcement posture.
Our take: The proposal sets no clear benchmark for what adequate enforcement looks like or whether these tariffs will be implemented. That adds uncertainty for multinational employers that have invested in supply chain due diligence and sourcing controls. A strong internal compliance program may not shield a company if its government becomes a target of U.S. trade enforcement.
Questions to consider:
-
How will USTR determine whether a country's enforcement efforts are sufficient, and what evidence will it accept?
-
If tariffs are imposed, what steps can governments realistically take to have them reduced or removed?
-
Will goods covered by existing trade agreements, including USMCA, be eligible for any exemptions?
-
Could this type of investigation become a template for future trade disputes involving labor, supply chain, or human rights concerns?
Experts have noted just how much more U.S. market access is being used as policy leverage—tied to labor, supply chain, and regulatory compliance, not just traditional trade measures. For employers operating across North America and Latin America, the challenge is managing and anticipating new requirements.
