Importers Sue Over New Forced Labor Tariffs on 60 Nations

Effective July 24, 2026, the U.S. Trade Representative imposed new tariffs of 10% or 12.5% on goods from 60 economies under Section 301 of the Trade Act of 1974, ostensibly to combat forced labor in global supply chains. The action covers roughly 99.4% of U.S. imports by value and replaces expired temporary tariff regimes that were previously struck down by courts. Two lawsuits filed immediately challenge the tariffs as procedurally and substantively unlawful, alleging USTR predetermined tariff rates and then assembled country-specific findings retroactively to justify them.

The irony cuts sharply: companies built on ethical sourcing practices, including Burlap & Barrel, which pays farmers multiples of market rates, and Learning Resources, which already defeated similar tariffs at the Supreme Court, bear the brunt of duties meant to penalize labor exploitation. The tariffs layer on top of existing duties, customs taxes, and Section 301 charges, creating compounding costs. Critical sectors including steel, aluminum, autos, and textiles receive partial exemptions, but most consumer goods and agricultural imports face full exposure. USTR structured the action to compartmentalize each country's tariff, limiting the fallout if individual rulings are challenged.

Supply chain professionals face immediate compliance complexity: tariff rates vary by country, commodity classification determines exposure, and foreign-trade zones no longer provide rate locks. Estimated annual costs to U.S. importers may reach $100 billion, yet Customs and Border Protection historically blocks only ~$800 million annually in suspected forced-labor shipments. The litigation outcome remains uncertain, but the structural impact on import planning, sourcing strategy, and landed costs is already forcing difficult decisions across retail, agriculture, and manufacturing.