US Import Duties: Trump Government Proposes 12.5% Tariffs On India And China Over Labour Risks

The US government plans fresh import duties of at least 10% on many trade partners, including India, after an investigation into forced-labour risks in supply chains. Some nations would face a higher 12.5% charge, as President Donald Trump seeks to shield American jobs and narrow trade imbalances.

According to the Office of the US Trade Representative, a 10% tariff would apply to products from Canada, Mexico, the European Union, Taiwan, the UK and several other partners. Goods entering from China, India, Japan, South Korea, Brazil and Switzerland would instead attract a 12.5% levy under the proposal.

Scope and purpose of the new tariffs

The planned new tariffs arise from a Section 301 investigation that initially covered about 60 economies over alleged use of forced labour. The administration argues that imports made under such conditions undercut US industry, and wants new duties to curb those flows while signalling tougher scrutiny of global labour standards.

"The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field," said Ambassador Jamieson Greer. "We will no longer tolerate this disparity. Some trading partners have taken initial steps to prevent the importation of forced labor goods, including through USMCA and commitments in Agreements on Reciprocal Trade. However, each of our trading partners must do more to ensure that trade does not perversely encourage and entrench forced labor globally."

Legal route and global reaction to the new tariffs

The initiative comes after the US Supreme Court in February annulled a broad set of tariffs that Donald Trump had imposed using emergency powers. That ruling weakened a central pillar of Trump’s trade policy, and the White House is now leaning on the more traditional Section 301 route, which is slower but seen as sturdier in court.

Key economic partners have so far mostly avoided tit-for-tat measures, preferring instead to explore negotiated arrangements that might lower some duties and safeguard access to the US market. The new tariffs could strain that restraint, especially for countries facing the higher 12.5% rate, including India, China and Japan.

A notice from the trade office states that written comments on the proposal must reach officials by 6 July, with a Section 301 panel scheduled to open public hearings from 7 July. Meanwhile, a temporary 10% global tariff imposed earlier by Trump under Section 122 of US trade law will lapse in July, creating pressure to complete current investigations.

Officials describe Section 301 tariffs as more adaptable and durable than emergency measures, though the process demands more time and public consultation. US Trade Representative Jamieson Greer has said the administration aims to finish several pending trade probes before the temporary Section 122 duties expire, so that a fresh round of tariffs can take effect without a gap.

Sanchari Ghosh, Assistant Editor at Mint, has worked in journalism for more than 12 years, reporting on personal finance, Distributed Ledger Technology, DeFi, geopolitics and foreign policy. Ghosh explains how money moves through systems like DLT, crypto and DeFi, and also covers immigration, visas and overseas financial planning for Indian readers.