Sri Lanka may be applicable for a 12.5% United States tariff, as proposed by the United States Trade Representative (USTR), for its lack of sufficient import prohibitions on forced-labor goods, the Office of the USTR said in a statement released on Tuesday (2).
Addressing countries that have signalled progress on what the US considers as sufficient prohibition of forced labour imports, the Office said: “For economies that impose a forced labor import prohibition, that have committed to impose and enforce such a prohibition through an Agreement on Reciprocal Trade, or economies that have imposed a partial regime with the effect of preventing the importation of certain forced labor goods, the U.S. Trade Representative proposes 10% as the rate of additional duties.”
Acknowledging its trade partners that it considers having fallen short of the requirements, such as Sri Lanka, the Office said: “For all other economies, the US Trade Representative proposes 12.5% as the rate of additional duty.”
Leveraging its trade law: Section 301 of the Trade Act of 1974, the US also notably proposed a “textile mechanism” within the same announcement – which is to mandate specific a quota of apparel and textile from certain economies into the country, at a reduced tariff rate. The specific countries had not been mentioned.
“The US Trade Representative also proposes a textile mechanism that would allow for a certain volume of apparel and textile imports from certain economies to enter the United States at a reduced Section 301 tariff rate.”
According to the USTR Ambassador Jamieson Greer, the failure of trade partners to act on the prohibition of forced labour imports has positioned the US unfairly on an “unlevel playing field”.
“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,” he said.
“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.”
Sri Lanka may be among 45 countries that are liable for a 12.5% tariff. The Reuters news agency, which had exclusively reviewed the USTR proposal. said that that the 14 economies which met the trade criteria for the 10% rate were: Canada, Ecuador, the European Union, Indonesia, Mexico, Pakistan, Argentina, Bangladesh, Cambodia, El Salvador, Guatemala, Malaysia, Taiwan, and the United Kingdom.
The Office of the US Trade Representative stated that it intends to impose tariffs on a total of 60 countries.
The US State Department Trafficking in Persons report in the past two years shows that Sri Lanka has been categorised as Tier 2, upgraded from its previous Tier 2 watchlist status. Countries categorised as “Tier 2” are considered nations that do make the minimum effort to meet anti-trafficking standards, and “Tier 2 watchlist” signals stagnant status.