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New US tariffs linked to forced labour: what businesses need to know

The US has introduced new tariffs on imports from 60 economies, linking duty rates more closely to forced-labour enforcement, and the impact depends on your products, origins and classifications.

The United States has introduced a new wave of tariffs on imports from 60 trading partners, tying market access and duty rates more closely to how forced-labour import controls are enforced.

Effective from 24 July 2026, the measures apply Section 301 tariffs of 10% or 12.5% to a broad range of goods entering the US. The affected economies include the UK, European Union, China, India, Vietnam, Canada, Japan, South Korea and several major sourcing and manufacturing markets across Asia, the Middle East and the Americas.

The headline rates look significant, but it would be a mistake to treat them as a blanket assumption. Your actual impact will depend on the product’s country of origin, Harmonized Tariff Schedule classification, existing duty rate, eligibility for an exemption and customs-entry date.

What has changed?

The Office of the United States Trade Representative investigated whether 60 economies had established and effectively enforced prohibitions on importing goods produced wholly or partly using forced labour.

Following those investigations, the US introduced a tiered tariff structure:

  • An additional 10% tariff applies to goods from the UK, India, Canada, Mexico, Bangladesh, Cambodia, Indonesia, Malaysia and several other economies that have introduced relevant controls or made specific commitments.
  • Goods from the European Union and Taiwan are subject to a combined Most-Favoured Nation and Section 301 rate of up to 10%.
  • Goods from Japan, South Korea and Switzerland are subject to a combined rate of up to 12.5%.
  • Goods from the remaining investigated economies are generally subject to an additional 12.5% tariff.

The higher-rate group includes several strategically important sourcing and trading markets, including China, Vietnam, Australia, Brazil, Oman, Saudi Arabia and the UAE.

Not every product will attract the headline tariff

The new framework is broad, but it comes with a detailed set of product exemptions.

These cover specified products including certain oil and gas imports, agricultural goods, foodstuffs, fertiliser inputs, pharmaceuticals, critical minerals, semiconductor manufacturing equipment and goods already covered by certain US national-security tariffs.

The final US notice also added 471 products to the proposed exemption list, alongside country-specific exclusions agreed with selected trading partners.

This means country-level analysis alone is not enough. You need to assess your exposure at individual product and HTS classification level.

A product sourced from a 12.5% country may be exempt. Equally, a consumer product with a seemingly low forced-labour risk can still attract the tariff if its classification is not excluded.

What does this mean for UK exporters?

Goods of UK origin fall within the 10% tariff category. However, this should not automatically be read as a new 10-percentage-point increase.

The new measure took effect as a temporary 10% global US tariff expired. The UK Government has therefore stated that there is no negative change to the general tariff rate facing UK businesses as a result of the announcement.

The practical position still needs to be checked product by product. Some UK goods have specific exemptions or alternative tariff treatment, while the total landed cost can also be affected by existing duties, product-specific trade measures and customs valuation.

It is worth validating your classifications and duty calculations rather than relying on the headline national rate alone.

The immediate impact on supply chains

For importers, exporters and retailers, the first impact will be financial.

Where the tariff applies, you may face a material increase in landed cost. This can affect:

  • Product margins and pricing
  • Supplier negotiations
  • Purchase-order economics
  • Sourcing-country comparisons
  • Inventory already in production or transit
  • Cash flow and customs-duty funding
  • Customer and distributor contracts

Responsibility for the cost will depend partly on the agreed Incoterms and which party acts as the US importer of record. Commercial teams should establish whether the supplier, buyer, distributor or end customer is contractually responsible before committing to pricing or margin decisions.

The second impact will be operational. Customs teams may need to update entry processes, validate new Chapter 99 tariff codes, confirm exclusions and retain supporting product and origin documentation.

Shipping through another country will not remove the exposure

The tariffs are based on the customs origin of the goods, not simply the country a shipment departs from.

Routing a Chinese-origin product through another Asian, European or Middle Eastern hub will not normally change its origin. Substantial transformation rules remain critical, and superficial processing, repacking or transshipment must not be treated as a tariff-avoidance strategy.

If you are considering alternative production or assembly locations, obtain a formal origin assessment before changing sourcing or routing decisions.

Responsible sourcing is now a commercial requirement

These tariffs reinforce a wider shift in international trade. Labour standards, customs compliance and supply-chain visibility are becoming increasingly interconnected.

The United States already enforces separate legislation that can result in shipments being detained or denied entry where forced-labour concerns arise. The new tariffs do not replace those controls. A shipment may be subject to the additional duty while still requiring evidence of where and how its materials were produced.

Strong supplier audits alone may not be enough. Increasingly, you need traceability beyond the direct manufacturer, including:

  • Raw-material origin
  • Component and input suppliers
  • Manufacturing and processing locations
  • Labour recruitment practices
  • Subcontractors and production facilities
  • Purchase orders, invoices and production records
  • Transport and chain-of-custody documentation

The direction of travel extends beyond the US. The European Union has adopted a regulation that will prohibit products made with forced labour from being placed on or exported from the EU market. Responsible sourcing should therefore be treated as part of your market-access strategy, rather than as a standalone ESG reporting exercise.

Five actions businesses should take now

  1. Establish the affected product population

Map your US-bound products against their country of origin, HTS classification, current MFN duty and the relevant Section 301 treatment.

Do not rely on broad product descriptions or supplier-provided commodity codes without validation.

  1. Recalculate landed cost

Model the additional duty alongside freight, insurance, customs fees and existing tariffs. Assess the resulting impact on margins, pricing and working capital.

Scenario planning should cover your current position, possible future changes and alternative sourcing options.

  1. Review goods in transit and held in customs warehouses

The limited transitional exemption only covered qualifying goods already loaded on their final mode of transit before the measure took effect and entered before the specified deadline.

Confirm the treatment of any shipments spanning the implementation date and retain evidence supporting the entry position taken.

  1. Confirm contractual ownership of the cost

Review Incoterms, importer-of-record arrangements, supplier contracts and customer pricing agreements. Duty responsibility should be clearly understood before commercial decisions are made.

  1. Strengthen supply-chain traceability

Identify where visibility stops below the direct supplier. Prioritise high-risk materials, sourcing regions and multi-tier production models, then close documentation gaps before a shipment is challenged.

From reactive tariff management to connected supply-chain control

The most important lesson is not simply that another tariff has been introduced. It is that market access can now change rapidly in response to trade policy, labour standards and geopolitical priorities.

Businesses that manage customs, procurement, logistics and responsible sourcing as separate activities will find it harder to understand their real exposure. Those that connect product, supplier, origin, shipment and cost data will be better placed to act earlier.

How we’re supporting our customers

Ligentia helps customers build that connected view across their supply chains, combining global transport management, customs expertise, supplier coordination and technology-enabled visibility.

By identifying exposed products, modelling landed-cost implications and improving control across suppliers and shipments, you can move from responding to tariff changes after the event to making faster, better-informed sourcing decisions.

If your business imports into the United States, speak to your dedicated contact at Ligentia. They can review the potential impact across your products, classifications and sourcing markets, and give you bespoke advice and guidance on how to prepare your supply chain.

 

 

*This article provides general information and does not constitute legal or customs advice. Tariff treatment should be confirmed against the applicable HTSUS provisions and with an appropriately qualified customs adviser.*