The United States proposed new tariffs on Wednesday, with India and 53 other countries, including China, Japan, and the UK, being hit with 12.5%, after an investigation by the United States Trade Representative (USTR). The investigation under Section 301 of the Trade Act of 1974 declared that the countries failed to impose a legal ban on “importation of goods produced wholly or in part with forced labour”.
USTR began the investigation in March under two categories. It launched the first investigation against 60 countries on charges of forced labour and the second investigation against 16 countries on the basis of excess manufacturing capacity. Both categories mentioned India, raising the possibility of the final tariffs to be over and above the 12.5% announced on Wednesday.
According to the Singabore-based Henrich Foundation, Section 301 allows USTR to not only impose tariffs but also “withdraw or suspend trade agreement concessions”, enter into binding agreements with the foreign government to eliminate the conduct or unburder U.S commerce, or compensate the United States with satisfactory trade benefits.
USTR also proposed a lower rate of 10% on six countries, consisting of Pakistan, Canada, Ecuador, the European Union, Indonesia, and Mexico, and said they showed a commitment to address forced labour imports and that they have made efforts to impose and enforce a forced labour import prohibition through a formal Agreement on Reciprocal Trade (ART) with the United States.
USTR is currently seeking public comment on the proposal, with written comments due by July 6 and a public hearing scheduled for July 7 this year. It expects to impose the tariffs before July 24, when the current 10% global tariffs under Section 122 are set to expire.
India and U.S engaged in trade talks
India and the United States are currently in the middle of a four-day trade negotiation in New Delhi.
The Ministry of Commerce and Industry said India remained engaged with the United States on the matter as a part of Section 301 proceedings.
“The proposed tariffs are not yet final, and stakeholders can submit requests to participate in public hearings by 22 June 2026. Written comments can be submitted until 6 July 2026. Public hearings will be held on 7 July 2026. The USTR will consider the comments and testimony received before taking a final decision on the proposed measures,” said the ministry.
