Forced-Labor Hearing Begins, Paving Way for More Trump Tariffs

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(Bloomberg) — A three-day hearing on the US Trade Representative’s latest plan to impose tariffs on major trading partners kicks off in Washington on Tuesday.

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The US launched an investigation into the forced-labor prohibition policies of 60 countries in March, citing a law that authorizes tariffs on countries deemed to unfairly burden US commerce. That basis is viewed as more legally sound than the emergency power President Donald Trump used last year to impose tariffs that were ruled illegal by the Supreme Court in February.

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The USTR determined in early June that each of the investigated economies failed to “impose and effectively enforce a forced labor import prohibition,” and recommended that goods imported into the US from those economies face an additional 10% or 12.5% duty.

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As part of the process, dozens of stakeholders will make their case — for or against the duties — to US trade officials. White House officials have already made it clear that they plan to use the forced labor and other investigations to restore import taxes to levels in place under Trump’s emergency tariffs.

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In the meantime, the administration has a temporary 10% global tariff in place that expires later this month.

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A separate USTR hearing on Brazilian policies and practices is also taking place this week, and Flávio Bolsonaro, Brazilian senator and son of the former President Jair Bolsonaro, is slated to testify to Tuesday. He is expected to urge the Trump administration not to impose new tariffs on Brazilian exports before the October election or target Pix, the country’s popular instant-payment system.

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“The proposed tariffs would reward the very offenders they are meant to punish,” Bolsonaro wrote in a filing to USTR, arguing that the measures would benefit President Luiz Inácio Lula da Silva, whose popularity rose after casting earlier US pressure as an attack on Brazil’s sovereignty.

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Tuesday

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Up first in the forced-labor lineup, USTR will hear from a panel of government officials, including Mexico’s Ernesto Acevedo Fernández, on “how Mexico’s USMCA Forced Labor Mechanism effectively enforces our forced-labor import prohibition.”

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Diplomats and trade officials from Chile, Ecuador, Guatemala, Guyana, Honduras and Peru are also set to speak.

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The second panel on Tuesday will feature the American Line Pipe Producers Association and the Steel Manufacturers Association. The groups will testify in favor of duties to counter what they call a flood of imports of steel mill and steel containing products, in part drive by low labor standards and the absence of import bans on goods produced with forced labor. 

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The American Petroleum Institute will ask USTR to drop duties on industrial inputs that are critical to the oil and gas industry, which the lobby group says have no link to forced labor and “simply cannot be sourced domestically either at all, or in sufficient quantities, by the industry responsible for meeting the Trump Administration’s aim of US energy dominance.”