An excellent article:
Are tariffs an effective way of preventing the use of forced labour?
In the middle of August, a late-night call by Australian Prime Minister Anthony Albanese to US President Donald Trump put a critical question on the negotiating table: a tariff exemption or reduction on imports from Australia that may be linked to forced labour?
On 24 July, the United States imposed tariffs of up to 12.5 per cent on Australian imports, alleging that Australia had failed to prohibit the import of goods produced with forced labour. The Australian government has since opened a public consultation to reform and strengthen the Modern Slavery Act (2018), which closes on 25 September. The amendments include a criminal “failure to prevent” penalty for large companies, civil penalties for reporting non-compliance and alternative forms of enforcement, such as deferred prosecution agreements.
The tariffs were prompted by a June 2026 report prepared by the US Trade Representative (USTR), which investigated 59 countries and the EU, together accounting for 99 per cent of US imports. Most of the countries in question are located in the Global South, but also include Canada, Japan, New Zealand, Norway, Switzerland and the UK. In near-identical findings, each was found to have failed to prohibit the import of such goods. Arguing that this failure “undermines the universal aim” of eliminating forced labour, the report recommends tariffs of 10 to 12.5 per cent, depending on whether the country had previously signed an Agreement on Reciprocal Trade with the Trump administration.
Like Australia, the allegations prompted a number of legislative and regulatory changes in Canada, the UK and the EU.
The key question is, do these tariffs represent a genuine commitment to eradicating forced labour, or do they primarily advance broader economic and geopolitical interests? If the latter, can they nevertheless make meaningful progress in the fight against forced labour, or do they simply repackage exploitation under a political narrative of “benevolent” states and corporations?
What is a tariff and how has it been used?
A tariff is not a cost paid by other countries. It is a tax applied to goods at the point of import and paid by the company importing them into the country. As economist Richard Wolff explains:
A tariff is a tax … All it means is, when something comes into the United States that was produced outside and is brought in to be sold, it has to pay a tax, literally as it crosses our border into our country. It is paid by the American company that brings it in, which may pass it on to the consumer … It’s an American tax.
Historically, tariffs were a primary means for governments to raise revenue.
Under Article 1 of the US Constitution, the power to impose tariffs on imports belongs to Congress. In exceptional circumstances, under the Trade Expansion Act (1962) and the Trade Act (1974), Congress delegates this authority to the president and the executive branch, but they must first investigate and make certain the findings. In other circumstances — such as in a national emergency declared by the president — Congress may authorise the executive to prohibit or regulate imports; for example, in the latter case, by increasing or decreasing tariffs, without explicitly authorising tariffs. Since the middle of the twentieth century, the US government has invoked tariffs under the pretexts of “national security,” “serious injury” or a “threat” to the domestic industry.
Under the Trump administrations, the United States has pursued an “aggressive” tariff regime. In his first term, Trump introduced tariffs on imports from China, Mexico and Canada, as well as on steel and aluminium. Since taking office in January 2025, he has announced tariffs on almost all countries, the largest being a 125 per cent tariff on Chinese imports. In February of this year, the US Supreme Court ruled that Trump’s 10 per cent “Liberation Day” tariffs — which he announced in April 2025 and justified under the pretext of a fentanyl-trafficking “national emergency” — were illegal and ordered the US government to refund more than $116 billion paid by 330,000 US companies. His replacement “global” tariffs of 10 per cent for 150 days were also ruled unlawful by the US Court of International Trade in May.