UK in line for fresh US tariff hit as Trump proposes ‘forced labour’ levy

Donald Trump has proposed a fresh round of tariffs that would hit numerous nations including the UK as the President seeks to rebuild his sweeping wall of levies that were struck down by the Supreme Court.

The US is exploring a tariff of at least ten per cent on imports from up to 60 trading partners following an investigation into forced labour practices.

The Trump administration’s trade office produced the proposals following a report that looked into its partners’ failure to impose and enforce laws that prohibit goods made with forced labour. 

“The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable,” said US trade representative Jamieson Greer.

“This creates a dynamic where American workers are forced to compete globally on an unlevel playing field. We will no longer tolerate this disparity.”

The US tariff announcement criticised the UK for failing to “impose a forced labor import prohibition” although it added that the country had brought measures through to tackle modern slavery.

As per the International Labour Organisation, forced labour refers to “all work or service which is exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily”.

A UK government spokesperson said that the country was already “tackling forced labour in the UK and in global supply chains to ensure UK businesses are not complicit in forced labour and human rights violations”.

They added: “We continue to engage regularly with the US Administration as part of our negotiations, and have made clear the actions we’re taking.

“The preferential access that UK businesses benefit from under our existing agreement remains in place and there is no change to the UK’s tariff rate.”

Trump makes play to rebuild tariff wall

As well as the UK, 53 other nations are named as failing to impose and effectively enforce a prohibition on the importation of goods produced with forced labour. The European Union, Canada, Ecuador, Indonesia, Mexico and Pakistan were named as failing to effectively enforce. 

The US is threatening a 10 per cent tariff to 16 specific economies whose leaders either have a partial forced labour ban or have signed trade agreements promising to create one – a group that includes the UK, Canada and Mexico. A higher 12.5 per cent is being proposed for the remaining nations with no meaningful restrictions at all, which include the likes of China and India.

Susannah Streeter, chief investment Strategist at Wealth Club, said: “Sweeping new US tariffs look set to be imposed, reopening raw trade wounds just as the energy crunch is turning into a chronic problem for economies around the world.”

The FTSE 100 was down 0.2 per cent in morning trading in London, but this also came amid mounting fears that peace talks between the US and Iran were stalling.

Streeter added: “It will be seen as a way of forcing through Trump’s agenda through another door. The scope is striking, sweeping in dozens of nations, including the European Union, which already has tough laws to counter modern slavery.”

It comes after the US Supreme Court handed down a landmark ruling in February that the sweeping tariffs unveiled by the White House last year were unlawful.

Justices weighed up a case centred around the Emergency Economic Powers Act that allows a President to regulate imports during a national emergency.

The White House had argued the act authorised Trump to impose his ‘Liberation Day‘ levies without any clear limits on the scope of duration.

But the nation’s top Court – which has a 6-3 Conservative majority – struck down the tariffs posing major financial ramifications for the Trump administration and dozens of global companies who had felt the pinch of the erratic trade policies.

All three liberal justices – Ketanji Brown Jackson, Elena Kagan and Sonia Sotomayor – voted against the tariffs and they were joined by Amy Coney Barrett, Neil Gorsuch and John Roberts.