The Section 301 Forced Labor Import Ban Report

On June 2, 2026, the Office of the U.S. Trade Representative (USTR) released its report on its Section 301 investigation into acts, policies, and practices of various economies related to the failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor. This post identifies the report’s evidentiary and reasoning failures.

Briefly, the report finds that all 60 economies under investigation, including the European Union, Canada, and Mexico, either failed to effectively enforce a forced labor prohibition or failed to impose any legal prohibition on the importation of goods produced wholly or in part with forced labor. Citing Section 301(b) of the Trade Act, the report notes that the Trade Representative must now “take all appropriate and feasible action …to obtain the elimination of that act, policy, or practice.” USTR proposes 10% as the rate of additional duties for one group of countries, and 12.5% as the rate for another group. To make this argument, USTR’s report simultaneously needs Customs and Border Protection (CBP) to be effective (to sustain the commerce-burden claim) and ineffective (to explain why forced labor still pervades the U.S. supply chain).

Researchers and practitioners have already devoted considerable time trying to understand the report’s implications for trade and labor governance, including why an initiative as critical to market integration as a forced labor import ban is being weaponized to justify yet another round of tariffs. I look forward to hearing from others, perhaps during the written comments period, which closes on July 6, 2026, or hearings on July 7, 2026. In this post, I offer a critique of some of the core elements of USTR’s reasoning related to forced labor import bans and their effects on destination and source economies.

 The Findings

Section 301(b) of the Trade Act authorizes the Trade Representative to take action to address acts, policies, and practices of a foreign country that are “unreasonable or discriminatory and burden[] or restrict[] [U.S.] commerce….”

Before applying that standard, the report divides the 60 economies into two distinct buckets. It finds that those in the first bucket (Canada, Ecuador, the entire European Union, Indonesia, Mexico and Pakistan) have “failed to effectively enforce a forced labor import prohibition” while those in the second bucket (54 other economies, including Australia, Singapore, and Switzerland) have “failed to impose a legal prohibition on the importation of goods produced wholly or in part with forced labor and to effectively enforce such a prohibition.”

The report then finds that the failure of all 60 economies to impose and effectively enforce a forced labor import prohibition is actionable. Referring back to the statute, the report argues that such a failure is “unreasonable” because it:

 (1) undermines the universal aim of eliminating forced labor; (2) permits firms that avail themselves of forced labor to produce goods at a lower cost and thereby distort market conditions for firms that do not use forced labor; (3) undermines the profitability of firms that do not use forced labor; and (4) contributes to the circumvention of existing forced labor import prohibitions.

That failure also:

[B]urdens or restricts U.S. commerce by subjecting U.S. producers to unfair competition from forced labor goods in both export markets and the U.S. market, and by displacing foreign goods produced without forced labor or forced labor inputs from their domestic market to the United States and other markets.

The report’s thesis, as I understand it, is as follows. U.S. forced labor import bans require U.S. producers that import inputs to exercise, under relevant statutes, “reasonable care” in the production of their goods, including through costly due diligence. Importers in the 60 named economies do not have to exercise reasonable care, or pay associated costs. When responsible U.S. producers export their goods, they have to compete in other countries with foreign producers, despite having higher production costs, giving foreign competition an unfair competitive advantage in export markets. Moreover, when foreign producers import goods produced in whole or part by forced labor, they sell goods at artificially depressed prices in their domestic market, which in turn can pressure producers (presumably, the good actors) in those countries to look for markets elsewhere, “thereby perpetuating the trade in forced labor goods.” The U.S. economy, with its compliant production practices, is presumably one such external market.

 The Critique

USTR’s findings and reasoning require a lot from us without offering us much in return. They require us to agree that: (1) U.S. enforcement authorities, namely CBP, effectively enforce forced labor import bans in the United States; (2) CBP’s effective enforcement compels compliance with forced labor import prohibitions in the United States; (3) U.S. forced labor import bans make it more costly for U.S. companies to produce goods with supply chain inputs than foreign competitors; and (4) U.S. exporters do not similarly export inputs produced in whole or part by forced labor. I take each argument in turn.

 1. The United States Does Not Effectively Enforce Its Forced Labor Import Bans

USTR’s Section 301 findings rise or fall on its argument that CBP effectively enforces forced labor import bans under Section 307 of the Trade Act and the Uyghur Forced Labor Prevention Act (UFLPA). The report argues: “Economies like the United States that effectively enforce laws that prohibit importation of forced labor goods are a natural destination for these producers, as they would be less subject to price distortions caused by forced labor goods.” If CBP’s enforcement is deficient, however, none of the interconnected consequences described above come to fruition. USTR argues in support of its thesis that CBP has “at present 55 WROs and eight Findings in place with respect to various goods whose entry into the United States is prohibited under the U.S. forced labor prohibition.” There are (at least) two problems with this argument.

First, the premise of the report is that forced labor is prevalent in the supply chain, requiring an all-hands approach to banning imports produced with it. That is correct, and the strongest portions of the report draw from empirical data showing how forced labor continues to permeate production in trade and distort the market. In particular, the report aptly relays polysilicon and cotton case studies to show how forced labor inputs transit through third economies to reach U.S. markets despite existing prohibitions.

In fact, USTR makes such a strong case for the prevalence of forced labor that it sets up CBP’s 55 WROs and eight Findings to appear rather inadequate. If the U.S. import market is truly facing a barrage of inputs and goods produced by forced labor (as a consequence, presumably, of weak import bans elsewhere), why has CBP only issued 55 WROs?

While USTR’s report paints these empirics in the best light possible, a quick review of congressional testimony sheds better light on CBP’s enforcement scorecard. It is safe to write that Congress, the entity that designed and enacted the forced labor import bans, hasn’t given the agency high marks. During a congressional hearing in 2024, for instance, Representative Dan Bishop observed that “CBP’s detention rate is just a sliver of the billions of dollars of textile products the U.S. imports annually, emphasizing the continuing challenge in effectively enforcing the law.” That inadequate detention rate, he elsewhere observed, compounds the “lack of visibility into CBP’s decisions [and thus] represents ‘the epitome of failure of government.’”

Representative Bishop is not alone. In a public letter to CBP in 2023,  seven U.S. Senators, including Senators Bill Cassidy and Ron Wyden, wrote: “Recent reports of textile and apparel mill closures in the United States raise serious concerns as the lack of effective customs enforcement has been cited repeatedly as a key factor contributing to declining demand,” and argued: “Insufficient enforcement can create a pathway for banned Xinjiang cotton to infiltrate regional supply chains and undermine efforts to enforce the Uyghur Forced Labor Prevention Act.” CBP’s track record, according to Congress, fails to align with USTR’s characterization of effective enforcement.

Second, USTR’s figures are questionable for two reasons: (1) the link offered in the footnote, like many in the report, is wrong and (2) even a correct link reveals that at least four of the active WROs have been superseded by the UFLPA’s rebuttable presumption and thus no longer function as independent enforcement tools.

USTR has dug itself into an analytical hole here. It needs to convince us that the lack of effective forced labor import bans elsewhere has led to pervasive forced labor in the supply chain, including the U.S. supply chain, harming U.S. producers. But it also needs us to agree that CBP is effectively enforcing the ban to keep those imports out of the United States. Instead of addressing this tension head on, the report under-analyzes CBP’s track record and over-credits CBP’s enforcement statistics.

 2. CBP’s Enforcement Does Not Compel Compliance

Part of USTR’s Section 301 investigation centered on whether the 60 economies effectively enforce their forced labor import bans, raising an obvious question about what “effectively enforce” means. According to the report: “USTR considers that an economy fails to effectively enforce a prohibition if the economy is deficient in compelling observance of its forced labor import prohibition, if any.” To show how CBP compels observance, the report merely recites the number of WROs, Findings, and examinations the agency has conducted since 2016, indicating that CBP modified 16 WROs and Findings after importers “demonstrated they had remediated the indicators of forced labor” that led to the enforcement action.

Again, USTR’s statistics are not doing the empirical work it needs here. According to the Global Slavery Index, a total of $196.6 billion dollars’ worth of imports at risk of being produced by forced labor make it into the United States. Neither foreign exporters nor domestic importers have been compelled into observance. Against that backdrop, the USTR’s paltry 16 actions stand starkly.

Furthermore, USTR offers no methodology for how it counts remediation actions. It does not break this figure down by sector or importer, nor does it provide a basis for treating 16 modifications across a decade as evidence of systemic compliance.

Perhaps acknowledging that arguments about compulsion require empirics on compliance behavior that exceed USTR’s expertise, the report helpfully points the reader to eight elements that can “also assist in examining whether an economy has the tools necessary to effectively enforce its forced labor import prohibition.” Space does not permit me to do a full assessment of CBP’s procedures, so I will stick to the first element: “A statutory definition of forced labor grounded in international law.”

I want to review this element because of its importance to broader trade and labor governance efforts. USTR’s invocation of international law to benchmark effective forced labor ban legislation is highly problematic in two respects.

First, while the U.S. forced labor import ban legislation reproduces the International Labor Organization’s definition of forced labor, it breaks from the definition in the details. The ILO’s definition is codified under ILO Convention No. 29. The Convention states:

For the purposes of this Convention the term forced or compulsory labour shall mean 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 voluntarily.

Meanwhile, Section 307 similarly states:

'Forced labor', as herein used, shall mean all work or service which is exacted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself voluntarily.

However, Convention No. 29 expressly includes “the imposition of forced labor for the benefit of private individuals, companies or associations.” U.S. legislation fails to honor that definition. When the question of ratifying Convention No. 29 was before the U.S. Tripartite Advisory Panel on International Labor Standards (TAPILS), the panel concluded:

Convention 29 cannot be ratified without amending U.S. law and practice…[TAPILS] concluded that the trend of states to subcontract the operation of prison facilities to the private sector in the United States conflicted with the requirements of Convention 29 relating to circumstances under which the private sector may profit from prison labor.

Consequently, the U.S. definition of “forced labor” is not grounded in international law.

Second, the deviance in the definition of forced labor has salient effects on trade. Private prisons in the United States made billions of dollars in profits last year owing to ramped up immigration detention. Prisoners who “volunteer” to work make $1 a day. The goods they produce, including food items, make it into the stream of commerce.

 3. U.S. forced labor import bans do not make it demonstrably more costly for U.S. companies to produce goods with supply chain inputs than foreign competitors

USTR’s report claims that due diligence costs in the United States are equivalent to a 2.5 percent tariff and attributes it to a RAND study commissioned by the Department of Homeland Security. It uses this statistic as evidence that U.S. producers are at a competitive disadvantage because producers in the offending economies “do not have to undertake due diligence to ensure that their goods are produced free of forced labor.”

USTR mischaracterizes what the RAND Study measures. The study’s actual calculation is entirely different. It calculates the tariff equivalent of the UFLPA’s observed trade effect, that is, the total reduction in import volumes the UFLPA caused.

USTR misattributed a macroeconomic policy effect to a microeconomic firm-level cost category. The UFLPA’s total trade-reducing effect has nothing to do with the specific cost burden on complying businesses. The UFLPA is a statute, not an enforcement action. Its trade-reducing effect reflects U.S. policy choices. However, Section 301(b) requires a finding that foreign conduct burdens U.S. commerce; USTR has instead substituted evidence of a U.S. statute’s trade effects to satisfy that requirement.

I am not suggesting that these data do not exist, merely that USTR has failed to offer them. An empirical survey of U.S. importers testing due diligence costs before and after 2016 would be probative, if USTR has time between now and the rather predictable litigation that will surely arise as this action unfolds.

 4. USTR’s Argument Falsely Assumes U.S. Exporters Are Compliant

The report’s comparative disadvantage argument assumes that U.S. companies do not engage in forced labor practices. This is a separate argument from above. If companies in the United States use forced labor to produce goods they export, then those companies are placing destination country companies at a similar competitive disadvantage.

Tellingly, USTR made no effort to show that U.S. exports comply with forced labor legislation. It merely contrasts the United States to another economy that “permits or does not police the use of forced labor to produce or provide services.” If the United States is guilty of the same, the comparative disadvantage argument either fails or is significantly weakened. Sectors of concern, the report notes, include agriculture, construction, manufacturing, and mining and quarrying. The report argues that “When these goods enter into an economy that prohibits the domestic use of forced labor, they directly undercut domestic producers and importers of legitimate goods.”

USTR is partly right. Its conclusion that forced labor practices undermine compliant companies is well documented. But its failure to engage with the U.S. forced labor practices in those same sectors raises significant red flags. Reports documenting forced labor in the United States are abundant. They suggest that between 50,000 and 1.1 million people are working in forced labor in the United States right now. They work in agriculture, where immigrant workers and young children are exposed to hazardous work without pay, including in export sectors. They work in manufacturing, where unaccompanied migrant children are forced into debt bondage. Private prison labor produces inputs in the global supply chain.

If U.S. exporters, like exporters elsewhere, defy forced labor prohibitions to produce tradable goods, then USTR’s comparative disadvantage argument requires rethinking. Before it can claim unreasonable interference with fair conditions of trade, USTR must think deeply about how U.S. corporate practices play into the so-called “race to the bottom.”

 Conclusion

Forced labor, whether in the United States or abroad, is abhorrent. It distorts the supply chain through perverse incentives to maximize profits at the expense of fundamental human rights. Curiously, USTR’s report characterized the prohibition against forced labor as “universal,” noting “the consensus within the international community that forced labor goods should not exist.” Its arguments seem to advocate for a rule of customary international law that could entice all governments, as a matter of erga omnes obligations, to enforce the prohibition under a shared legal interest. Rather than take that approach, USTR has tied itself (and brought us along for the ride) in circles, requiring it to argue, on the one hand, that forced labor continues to permeate the U.S. supply chain and, on the other, that CBP has effectively enforced U.S. forced labor import bans so as to compel compliance among importers. USTR’s poor reasoning and misleading use of data raises more questions than the report answers.