The Trump adminstration’s latest action on trade uses Section 301 for the first time as an unfair trade practice on the basis that “[f]orced labor taints the entire supply chain in which it exists.”
Section 301 of the Trade Act empowers the United States to investigate the trading practices of its international partners if they are deemed to unfairly burden or restrict American commerce.
The Trump Administration has correctly identified forced labour as a significant problem affecting global supply chains.
The International Labor Organization finds forced labour is growing globally, affecting 27.6 million people.
If the war with Iran leads to a prolonged global energy shock, this number will increase, as more people will be forced to flee their countries to find work elsewhere, leaving themselves vulnerable to labour exploitation.
Many companies do take significant action to combat forced labor and should be recognised for doing so. For example, the sustainable business network and consultancy BSR works to ensure that human rights are respected throughout their 300 member companies’ value chains. Within their supply chains, progress occurs on forced and other labor standards.
But more must be done – and the Trump administration has the power to make that happen.
On 14 March, the US Trade Representative opened an investigation into the forced labour practices of 60 governments.
The probe examines whether each government fails to impose and effectively enforce a ban on the importation of goods produced with forced labour.
Many trade experts see this investigation as a pretext for the United States to impose tariffs on as much of the world as possible.
Regardless, this investigation and resulting tariffs will likely force governments and thereby more companies to further prevent the existence of forced labour in their supply chains.
When the US government engages on forced labour, lives improve – more rights, better conditions, fairer pay.
When the US engages, lives improve
A case against Sime Darby, now known as SD Guthrie after a rebrand in 2024, shows how US government enforcement improves lives.
In 2020, the US banned imports from the Malaysian palm oil company after finding debt bondage, restricted movement, and withheld wages across its plantations. While, the firm had been the first in the palm oil sector to draw up a human rights charter in 2017, that did not stop the US from investigating.
The suspension from the US market resulted in real remediation: Sime Darby repaid approximately US$18.6 million in recruitment fees to 34,000 workers and appointed independent auditors to overhaul conditions.
Now, the US is turning this tool on governments, not companies.
Forced labour the trigger, tariffs the goal
In April 2025, Donald Trump announced the US would impose tariffs on nearly the entire world.
He said the US’ non-reciprocal trade deficits constituted a national emergency.
In February, the US Supreme Court struck down his use of the International Emergency Economic Powers Act to impose these tariffs.
The White House pivoted swiftly to find another legal basis for its tariffs, first through Section 122. But authority under this statute expires in July.
Now, the Trump Administration turns to Section 301 as a vehicle for global tariffs. Procedural requirements under this statute require a separate investigation beto be undertaken for each country. If United States Trade Representative (USTR) determines that foreign conduct is unfair and burdens or restricts US commerce, it must seek to negotiate a resolution with the foreign government before it can impose tariffs
The USTR put forth an accelerated timeline to conclude these investigations to be able to reach a decision by the time the Section 122 tariffs expire.
“Arguably, these investigations have more to do with simply reconstructing the reciprocal tariff regime rather than specific concerns about forced labour,” Stephen Olson, former US trade negotiator and visiting senior fellow at the ISEAS–Yusof Ishak Institute told us.
“It is not clear what steps a country would need to take to satisfy the US government that it has effectively banned imports of goods produced with forced labour in order to avoid tariffs,” Barbara Weisel, a former USTR negotiator currently with the Carnegie Endowment for International Peace, told us.
Forced labour serves as the trigger. Tariffs are the goal.
The US’ focus shifts from companies to governments
The US can detain specific goods suspected of involving forced labour. By blocking the shipment, the US challenges a company to prove it does not have forced labour in its operations or supply chain.
Section 301 targets governments – including those of most of Asia – not specific companies. If the USTR determines a government failed to adequately prohibit or enforce against forced labour, it can impose economy-wide tariffs on all exports from that economy.
That shift from specific exporters to governments matters. Governments facing economy-wide tariffs have much more incentive to scrutinise the actions of their exporters and have the power to do so. Companies should expect significantly more pressure from local regulators – extending well beyond their own factory floors to their full supply chains.
The USTR’s Federal Register notice flags this directly: forced labour taints the entire supply chain in which it exists.
The consequences for Asian exporters will be real
The 301 investigations target 60 governments.
Written comments close April 15. Hearings will run from 28 April to 1 May.
Past Section 301 cases took months, even years, to resolve. This one needs to wrap up by the end of July, when the current temporary tariff regime expires for Trump to maintain his global tariffs without interruption.
The process looks designed to conclude US trading partners are guilty, with no period of consultation to allow for elimination of the offending actions.
Companies should be ensuring responsible sourcing, but three realities make enhanced compliance essential.
First, if the US imposes a tariff on all exports from a country due to a lack of a national forced labour compliance mechanism, a company may request an exclusion if it has taken the necessary steps to prevent forced labour from entering its supply chain.
Companies that can prove their operations and supply chains are free of forced labour may be able to apply to be excluded from any tariffs imposed.
Exclusions require demonstrated compliance.
Second, investors, customers, and regulators across jurisdictions already scrutinise forced labour practices – regardless of what Washington does. That pressure will intensify on exporters from countries the US determines fail to address forced labour concerns.
Third, even if imposed to maintain high tariffs, preventing forced labour maintains bipartisan support. The US has prohibited goods made with forced labour for nearly a century, and both parties believe forced labour puts American workers and producers at a disadvantage.
There’s a good chance the next US administration will almost certainly maintain them.
Compliance frameworks, supplier records, and audit trails will be needed no matter who sits in the Oval Office next.
Distinction between what nations and companies do
Outside of Xinjiang and the Uighur Forced Labor Protection Act, enforcement historically targeted a shipment, a factory, or a company.
A Section 301 ruling targets an entire economy – every exporter, every product, every supply chain relationship a company has built.
This moment demands a genuine assessment of a company’s full supply chain, including direct suppliers, raw materials, components, and subcontractors.
Greater diligence of written supplier commitments, documented audit trails, grievance mechanisms workers can use, and senior leadership owning of the findings will be demanded by every government under investigation.
“A finding of forced labour against a country will create a dark cloud of suspicion and companies will have to redouble efforts to demonstrate that they are in fact not part of the problem. Compounding the challenge, companies will have to satisfy not just the US and host governments, but their socially conscious customers,” Olson added.
The off-ramp for both a tariff exclusion and protecting a company’s reputation requires both eliminating forced labour and a paper trail of proof.
Companies can prove compliance. Those which had their suspended products once again permitted into the US prove that. It’s a lot of work and money, but less than what they would have paid had they done this from the start – and much less than the cost of tariffs or lost business.
With forced labour moving from human rights concern to also one of unfair trade, sustainability professionals and trade experts must work closely together. Both migrant workers and company shareholders and investors will win if they do.
Steven Okun is CEO of APAC Advisors, a Singapore-headquartered consultancy focused on geopolitics and responsible investing. Megan Willis is APAC Advisors’ senior advisor and Noemie Viterale is an associate.
