Key Points

• Potential tariffs: The investigations of 60 trading partners could lead to additional tariffs (above any currently imposed on a trading partner or good) for failure to impose and maintain bans on the importation of goods made with forced labor. Greater scrutiny of forced labor in supply chains could create significant compliance and cost implications for companies with global sourcing operations.
• Import bans: These investigations do not allege that forced labor is occurring within the targeted economies themselves. They instead focus on whether those trading partners have failed to enact or enforce bans on the importation of goods made with forced labor.
• Proactive compliance: Companies should map their supply chains and strengthen forced labor compliance now, as existing enforcement trends under the Uyghur Forced Labor Prevention Act (UFLPA), the Tariff Act of 1930 and new trade agreements are now converging with these investigations to intensify sourcing scrutiny.
• Upcoming dates: Public comments regarding these investigations are due April 15, 2026. The Office of the U.S. Trade Representative (USTR) will hold hearings on April 28, 2026. Trade associations and multinational companies should consider filing comments. Fox Rothschild is ready to assist in crafting industry-specific submissions.

The Office of the U.S. Trade Representative (USTR) recently launched investigations of 60 economies (referred to in this article interchangeably as economies, trading partners and foreign governments) related to their alleged failure to ban the importation of goods made with forced labor. The March 12, 2026, action, which spans multiple regions, is a broad initiative under Section 301 of the Trade Act of 1974 (Section 301). It reflects an increasingly aggressive use of trade enforcement tools to address labor practices globally. The increased enforcement could lead to higher costs for businesses that export goods from the 60 targeted economies.

Why It Matters

According to USTR, these investigations serve both economic policy and human rights objectives. USTR has emphasized that inadequate enforcement of a trading partner’s forced labor import ban can create an artificial cost advantage for foreign producers, undermining U.S. workers and companies — even if forced labor is banned domestically. Trading partners under investigation include Bangladesh, Brazil, China, the European Union, Mexico and Vietnam.

If USTR makes an affirmative determination that a government’s actions related to the importation of goods made with forced labor are “unreasonable or discriminatory and burdens or restricts United States commerce” within the meaning of Section 301, the U.S. could impose tariffs, import restrictions or other remedial measures.

These investigations are part of a broader forced labor-trade enforcement trend that includes the Uyghur Forced Labor Prevention Act (UFLPA), the longstanding forced labor import ban under the Tariff Act of 1930 and emerging trade agreements with economies in Southeast Asia and Latin America that require trading partners to implement their own forced labor import bans. Some of the new trade agreements require trading partners to consider the U.S. government’s determinations on entities under the Tariff Act — while other agreements even require trading partners to recognize U.S. determinations and presumptively prohibit importation of goods from those entities. Furthermore, U.S. Customs and Border Protection (CBP) detains shipments at the U.S. border where importers cannot demonstrate full supply chain traceability. The convergence of these enforcement mechanisms — administered by both U.S. and foreign authorities — means that companies face exposure on multiple fronts. We recently discussed how this enforcement trend affects corporate compliance.

It bears noting that enforcing forced labor import bans is very complex and resource intensive. The U.S. is the dominant player in this space, and even its enforcement apparatus, built over decades, faces challenges in tracing goods through multi-tiered global supply chains.

Many of the economies subject to these investigations lack the institutional infrastructure, customs technology and investigative capacity to enforce forced labor import bans effectively. This raises a strategic question: if trading partners are unable to meet these enforcement expectations, their shortcomings could serve as a justification for the U.S. to impose tariffs under Section 301. This outcome may align with the administration’s broader tariff agenda regardless.

Practical Considerations

Companies involved in global sourcing should closely monitor these investigations and take proactive steps to mitigate risk.

First, companies should conduct comprehensive supply chain mapping to identify sourcing relationships in jurisdictions subject to the investigations and to flag high-risk geographies, facilities and intermediaries connected to forced labor indicators. Second, companies should strengthen documentation and verification protocols, building a defensible traceability record that can withstand CBP inquiries and satisfy the evidentiary standards under the UFLPA and Tariff Act. Third, companies should evaluate tariff risk by modeling potential cost impacts if Section 301 tariffs are imposed. Fourth, companies and trade associations should consider submitting comments to USTR or participating in hearings if their business may be affected. Written comments and requests to appear at USTR’s hearings regarding these investigations are due by April 15, 2026. USTR will hold the hearings on April 28, 2026. Fox Rothschild can assist clients in preparing and filing submissions and testimony in connection with these proceedings.

For companies engaged in M&A, forced labor exposure can materially affect transaction value. An acquirer may inherit existing CBP inquiries, vulnerable supplier relationships or supply chain models that are incompatible with U.S. labor-trade commitments. Incorporating forced labor supply chain mapping into transactional due diligence, rather than waiting for a specific issue to arise, enables parties to identify and allocate risk early. It also reduces the likelihood of post-closing enforcement issues.

What Could Happen Next?

It is important to understand that this is an investigation — not a final action. No new tariffs have been imposed yet. However, Section 301 is the same legal tool the administration has used in the past to impose significant tariffs, most notably on goods from China. Notably, Section 301 is a different statute than the International Emergency Economic Powers Act of 1977 (IEEPA), which the Supreme Court recently held does not provide the president with broad tariff powers.

If USTR ultimately finds that a trading partner’s practices are “unreasonable or discriminatory,” and that they burden U.S. commerce, USTR has broad authority to take action. That action could include new tariffs, import restrictions or other trade measures. Importantly, any measures imposed under Section 301 may be in addition to tariffs and duties already in place under other trade laws, such as Section 232.

Takeaways

These wide-ranging investigations signal that trade policy is increasingly being used to address forced labor in global supply chains. Combined with the UFLPA, the Tariff Act and new labor provisions in trade agreements, these actions create a compliance landscape that demands proactive attention. Companies that invest now in supply chain traceability and defensible documentation will be best positioned to avoid disruptions and mitigate trade risk.

For more information, please contact Mark G. Eskenazi at meskenazi@foxrothschild.com or 202.461.3109, Brittney R. Powell at bpowell@foxrothschild.com or 202.794.1186, or another member of our Labor & Employment Department or International Trade Practice Group.

This information is intended to inform firm clients and friends about legal developments, including the decisions of courts and administrative bodies. Nothing in this alert should be construed as legal advice or a legal opinion. Readers should not act upon the information contained in this alert without seeking the advice of legal counsel. Views expressed are those of the author and not necessarily this law firm or its clients.