THE United States is imposing a new 12.5-percent tariff on exports from the Philippines for failing to adopt measures against goods produced with forced labor, the United States Trade Representative (USTR) said in a statement on Friday.
Exports from 59 other trading partners of the US were also slapped with tariffs ranging from 10 percent to 12.5 percent for the same infraction.
Forced labor is defined by the International Labor Organization (ILO) Forced Labor Convention of 1930 as “all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself [or herself] voluntarily.”
According to the latest statistics from the ILO, which is a UN agency focused on human and labor rights, about 27.6 million people were in forced labor worldwide on any given day in 2021.
“The United States has had a forced labor import ban for nearly a century, and rigorously enforces it; it’s well past time for our trading partners to do the same,” said US Trade Representative Jamieson Greer.
The new tariffs will take effect just as temporary 10-percent worldwide tariffs expire at 12:01 a.m. on Friday.
Trump, who argues that high tariffs will revive American manufacturing, last year overturned decades of US policy that favored lower tariffs and ever-freer trade. Invoking the 1977 International Emergency Economic Powers Act (IEEPA), he imposed double-digit tariffs on imports from almost every country on Earth, saying America’s long-standing trade deficit amounted to a national emergency.
But the Supreme Court ruled that IEEPA did not authorize tariffs. The decision forced the administration to pay refunds to importers that had paid the tariffs.
Some products — including oil and gas, and fertilizer — are exempted from the new tariffs announced on Thursday. Also being spared are products that qualify for duty-free status under the US-Mexico-Canada Agreement, the North American trade pact Trump negotiated in his first term.
Last March, upon the direction of President Trump, the USTR launched investigations into the inability of various economies to enact and successfully implement a ban on the importation of goods made using forced labor.
USTR and the Section 301 Committee held public hearings on these investigations last April. The USTR also consulted more than 45 governments of the economies under investigation, in accordance with Section 303(a) of the Trade Act.
Industry groups in the Philippines also expressed concern over the additional tariff.
Management Association of the Philippines President Donald Lim said any increase in trade barriers affects the competitiveness of Philippine exports and the jobs they support.
The group urged the Philippine government to engage with US authorities to address any concerns, clarify issues raised and maintain the strong trade relationship between the two countries.
However, Lim said the new tariff should also boost the Philippines’ determination to enhance supply chain transparency, maintain internationally recognized labor standards and expedite reforms that boost the competitiveness of Philippine exports.
Philippine Exporters Confederation Inc. (Philexport) said the additional tariff would undermine the competitiveness of Philippine exporters, particularly micro, small and medium enterprises.
Philexport President Dr. Sergio Ortiz-Luis Jr. said that while the group supports initiatives to eliminate forced labor and promote responsible business practices, broad-based tariffs are not the most appropriate mechanism to achieve these objectives.
“Imposing blanket tariffs on an entire country’s exports, regardless of the actual risk profile of individual products or companies, may unfairly penalize legitimate exporters that have consistently complied with international labor standards,” Ortiz-Luis said.
Last Thursday, the Departments of Trade and Industry, Finance, and Labor and Employment signed a Joint Administrative Order directing the investigation and prohibition of the importation of goods produced through forced labor.
The tariffs drew immediate fire from critics across the world.
“Today’s forced labor justification is too convenient to be taken seriously,” said US Rep. Richard Neal of Massachusetts, the top Democrat on the House Ways and Means Committee. “Forced labor is a real and pervasive problem in our supply chains and demands serious enforcement. It should never be cheapened into a pretext for a tariff policy built on dubious legal theories and personal grievances.’’
Brazil, which faces a 12.5-percent forced-labor tariff, called the US move “arbitrary and unjustified” in a statement. It plans to trigger its reciprocity law — which could call for retaliatory tariffs on the United States — and take a complaint to the World Trade Organization. The United States, the Brazilian government said, “chose to manipulate an issue of great importance to human rights and the struggles of workers worldwide in order to accuse 59 countries and the European Union of unfair practices.”
Chile’s Undersecretary for International Economic Relations Paula Estévez said that the country has “solid labor institutions, a robust regulatory framework and a firm commitment to the prevention and eradication of forced labor.” Chile faces a 12.5-percent rate.
Human rights watchers say that it’s reasonable to be skeptical of the motivation behind the tariffs. But they say the levies could make an impact on the problem of forced labor.
In a statement, Dominic LeBlanc, the Canada-US Trade Minister, said the move “is not unexpected.”
