What the June 2, 2026 Notice of Determinations means for importers, and the narrow window to respond

On June 2, 2026, the Office of the United States Trade Representative did something the Section 301 toolkit had never been used to do. In a single Notice of Determinations, USTR found that 60 of America’s trading partners, together the source of more than 99 percent of all goods the United States imported in 2024, have failed to impose and effectively enforce a prohibition on the importation of goods made with forced labor, and it proposed to answer that failure with across-the-board tariffs on substantially everything those economies ship to the United States.

It is one of the broadest trade actions in modern memory, and its logic is unusual. The tariffs are not a response to a foreign subsidy, a currency practice, or a barrier facing American exporters in the conventional sense. They are a response to what other governments have not done, a failure to police forced labor at their own borders, reframed as an unfair act that distorts competition and burdens U.S. commerce. For importers, the practical question is simpler and more urgent: a 10 or 12.5 percent duty may soon attach to a vast swath of the customs entry book, and the period to shape or contest it closes in early July. This briefing explains what USTR decided, the legal theory underneath it, who pays which rate, what is carved out, and what your business should be doing right now.

What USTR Actually Determined

The action traces back to March 12, 2026, when the Trade Representative self-initiated 60 parallel investigations under Section 302(b) of the Trade Act of 1974. The question in each was the same: does the economy in question maintain and effectively enforce a ban on importing goods produced wholly or in part with forced labor? The investigations drew an extraordinary public response, more than 450 written comments and nearly 60 witnesses across two days of hearings at the U.S. International Trade Commission in late April. USTR also requested government-to-government consultations with every economy under investigation; 46 governments engaged, while the remainder declined or were unable to participate.

The June 2 Notice records the conclusions. The Trade Representative determined that 54 of the investigated economies have failed both to impose and to effectively enforce a forced-labor import prohibition. A further six, Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan, were found to have a prohibition on the books but to have failed to effectively enforce it. Crucially, USTR concluded that the failure in every case is “unreasonable” and “burdens or restricts U.S. commerce,” the twin findings that make conduct actionable under Section 301(b). The list of 54 reads like a directory of America’s largest suppliers: China, India, Japan, South Korea, Taiwan, Vietnam, Thailand, Malaysia, the United Kingdom, Switzerland, Brazil, and dozens more.

USTR’s reasoning rests on a competition theory rather than a purely moral one. Most economies, the Notice observes, prohibit forced labor domestically, but a domestic ban, even when enforced, only disciplines local producers. It does nothing to stop forced-labor goods from flowing in as imports, and nothing to stop domestic firms from using forced-labor inputs sourced from abroad. The result, in USTR’s framing, is a global market that quietly rewards the use of forced labor with an artificial cost advantage and penalizes the firms, American ones prominently among them, that refuse to use it. By contrast, the United States has prohibited forced-labor imports for nearly a century under Section 307 of the Tariff Act of 1930, and has folded forced-labor commitments into the USMCA and into a series of recent Agreements on Reciprocal Trade.

A Novel Theory of “Unreasonableness”

Section 301 is best known as the statute behind the China tariffs of 2018 and the digital-services-tax disputes that followed. Those cases involved conduct that arguably violated U.S. rights or discriminated against U.S. firms. The forced-labor action is different, and USTR knows it. The Notice leans on the “unreasonable” prong of Section 301(d), which, unlike the “unjustifiable” or “discriminatory” prongs, expressly reaches acts and policies that are “not necessarily in violation of, or inconsistent with, the international legal rights of the United States” but are nonetheless unfair and inequitable.

That distinction matters because it lets USTR sidestep an obvious objection: there is no binding international treaty that requires a country to ban forced-labor imports specifically. Many commenters pressed exactly this point. USTR’s answer is that Section 301 contains no requirement that an international standard exist before conduct can be branded unreasonable. The statute, USTR argues, was deliberately written to let the Trade Representative reach unfair foreign practices that fall outside the WTO’s rulebook. Whether reviewing courts accept that reading, and whether the action survives the inevitable challenges, including the broader litigation testing the limits of tariff authority that has dominated trade headlines through 2025 and into 2026, is one of the central uncertainties hanging over the entire program. The Global Trade Alert monitoring service, which tracks discriminatory trade measures worldwide, has logged the action as a set of “Amber” interventions, its classification for measures likely to harm foreign commercial interests, and flagged that the proposed duties remain “not yet in force.”

Two Tiers: Who Pays 10 Percent and Who Pays 12.5

The proposed remedy is a tiered, ad valorem additional duty layered on top of all existing duties. The rate a country draws depends on how far it has gone toward an enforceable forced-labor import regime.

The 10 percent tier. A reduced 10 percent rate is reserved for economies that have made meaningful progress in one of three ways. First, economies that actually impose a forced-labor import prohibition, Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan. Second, economies that have undertaken commitments on forced-labor import prohibitions through an Agreement on Reciprocal Trade with the United States, Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, Guatemala, Indonesia, Malaysia, and Taiwan. Third, economies that have imposed a partial regime with the effect of blocking certain forced-labor goods, here, the United Kingdom. Taken together, this lower tier covers roughly fourteen economies, several of which appear in more than one category.

The 12.5 percent tier. Every other investigated economy that has neither imposed nor effectively enforced a prohibition draws the higher 12.5 percent rate. This is the default, and it captures the bulk of the 60, including China, India, Japan, South Korea, Vietnam, Thailand, Brazil, and most of the rest.

The design is intended to function as both penalty and incentive. USTR is explicit that it “fully expects” economies that have made commitments to follow through, and that the rate differential is meant to reward movement toward enforceable prohibitions. In effect, the 2.5-point gap is a lever: implement and enforce a credible forced-labor import ban, and the door is open to a lower rate or removal from the action entirely.

What Annex A Carves Out

A tariff that nominally reaches “all products” of 60 economies would be economically reckless without exclusions, and Annex A to the Notice is where USTR draws the lines. The exemptions follow a recognizable logic, and the categories matter because they signal how USTR is thinking about collateral damage.

Annex A excludes, first, all articles and parts already subject to Section 232 tariffs, steel, aluminum, autos, and the other national-security lines, so that goods are not double-stacked under two regimes. It excludes raw materials whose taxation could leave domestic manufacturers without supply, and the running list in the Notice bears this out: it reaches across mineral ores and concentrates (copper, nickel, cobalt, manganese, tin, chromium, tungsten, and more), natural graphite, coal and coke, crude petroleum, and a long catalogue of agricultural goods that simply cannot be grown at scale in the United States, coffee, cocoa, bananas, coconuts, Brazil nuts, vanilla, cinnamon, nutmeg, and similar tropical commodities.

Annex A also carves out products that could cause “economy-wide disruptions,” goods that cannot be produced domestically or sourced elsewhere in sufficient quantity, and a familiar set of categorical exclusions: informational materials such as books, donations, and accompanied baggage. Finally, USTR adds USMCA-compliant goods of Canada and Mexico, and textiles and apparel that already enter duty-free under CAFTA-DR as goods of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, or Nicaragua. Importantly, the Notice stresses that only goods properly classified under the specific HTSUS provisions listed in Annex A are excluded; the product descriptions are informational, and classification questions go to U.S. Customs and Border Protection. For any importer, mapping a product’s exact ten-digit HTSUS classification against the Annex is the difference between a duty-free entry and a 12.5 percent surcharge.

The Textile Mechanism: A Quota in Disguise

One of the most distinctive features of the proposal is a textile mechanism that would let a defined volume of apparel and textile imports enter at a reduced Section 301 rate. The volume of reduced-duty imports a trading partner earns would be tied to that partner’s purchases of U.S. textile inputs, man-made and cotton fiber, and to the volume of U.S. cotton and cotton products it buys over a given period. In plain terms, the more American fiber and cotton a country imports, the more apparel it can ship back to the United States at the lower rate.

This is a reciprocity device dressed as a tariff exception, and it reflects a long-standing objective of U.S. textile policy: keeping American cotton and synthetic fibers embedded in global apparel supply chains. For sourcing teams in apparel and home textiles, industries already living with razor-thin margins and acute exposure to the affected economies, the mechanism could become the single most consequential variable in the entire action. USTR has invited comment specifically on its features: which U.S. and foreign products should be covered, how the relative market opportunities should be balanced, what rate should apply, and whether a comparable mechanism should be extended to other sectors. That last question is an open invitation, and industries beyond textiles should consider whether to seek similar treatment.

The Scale of the Exposure

It is hard to overstate the breadth here. Because the 60 economies account for more than 99 percent of U.S. goods imports, the action is closer to a near-universal import surcharge, filtered through forced-labor findings and softened by Annex A, than a targeted, country-specific remedy. The Global Trade Alert record for the measure lists thousands of affected tariff lines and well over a hundred sectors, from cereals and vegetables to wood, metals, and manufactured goods. USTR’s underlying Report leans on the Department of Labor’s 2024 List of Goods Produced by Child Labor or Forced Labor, the TVPRA List, to substantiate the prevalence of forced labor across global supply chains.

For most importers, the relevant arithmetic is straightforward and uncomfortable. A 10 or 12.5 percent additional duty lands on the customs value of affected goods, on top of the normal-trade-relations rate, any Section 232 duty that is not exempted by routing the article elsewhere, antidumping or countervailing duties, and the various other measures stacked on certain origins over the past several years. For a company importing finished consumer goods from a 12.5 percent-tier country with no Annex A relief, the action represents a direct and immediate margin hit, one that cannot be wished away and, in many supply chains, cannot be quickly re-sourced.

How USTR Answered Its Critics

The Notice devotes real space to rebutting the legal arguments raised in comments, and the responses preview the government’s litigating position. Three objections stand out.

“We already ban forced labor domestically.” USTR’s reply is that a purely domestic prohibition, however well enforced, disciplines only local producers and does nothing about imported forced-labor goods or imported forced-labor inputs. A country can extinguish forced labor within its borders and still permit market conditions in which forced-labor imports undercut U.S. goods.

“There is no international obligation to do this.” USTR responds that Section 301 does not require an international standard as a predicate. The “unreasonable” prong was written precisely to capture unfair conduct that lies outside existing international legal obligations.

“We’ve already made commitments to the United States.” USTR applauds the economies that have committed through Agreements on Reciprocal Trade, Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, Guatemala, Indonesia, Malaysia, and Taiwan, but insists that a promise of future action is not the same as a legal prohibition that is actually enforced today. Until commitments are implemented, U.S. products keep competing against forced-labor goods. The reduced 10 percent rate, USTR says, is how it credits those commitments without treating them as complete.

A separate cluster of comments urged USTR to pursue multilateral negotiation, through the International Labour Organization, and to offer capacity-building and technical assistance to developing economies rather than “punitive” tariffs. USTR’s answer is that tariffs are appropriate to obtain elimination of the offending practices, while noting it will keep those comments in mind as it shapes final action. The door to a softer touch is not bolted shut, but it is not the default path either.

The Road Ahead: A Compressed Comment Window

The June 2 Notice is a proposal, not a final action, and the procedural calendar is tight. The key dates are worth committing to memory:

USTR has asked for comment on a specific and useful set of questions: which products should be added to or removed from the scope; whether the Annex A exclusions are correctly drawn; whether the duty rates are set at the right level; whether a given economy’s commitments justify different treatment; and how the textile mechanism should be structured. For an importer, these are not abstractions. They are the precise levers through which a well-supported comment can move a product out of scope, secure an exemption, or argue a lower rate, provided the comment arrives with the right HTSUS detail and a credible showing of supply-chain harm or domestic-supply unavailability.

What Importers Should Do Now

With the comment window measured in weeks, the difference between a prepared company and an unprepared one will be visible on the bottom line. Five priorities deserve immediate attention.

• Map your exposure by HTSUS line and origin. Pull your entry data, identify every classification sourced from one of the 60 economies, and flag which lines fall inside Annex A and which do not. The exclusions turn on precise ten-digit classifications, so this is a customs-classification exercise, not a product-category guess.
• Model the duty stack. Layer the proposed 10 or 12.5 percent on top of NTR rates, any non-exempt Section 232 duties, and any AD/CVD exposure. The cumulative number, not the headline rate, is what hits margin.
• Decide whether to comment or testify, and on what. If a product is a necessary raw material with no domestic supply, or its inclusion would cause serious supply dislocation, those are exactly the grounds USTR invited. A targeted, evidence-backed submission filed by July 6 is the cheapest insurance available.
• Pressure-test the textile mechanism if you touch apparel or textiles. Sourcing decisions tied to U.S. cotton and fiber purchases could shift materially. Companies in adjacent sectors should weigh whether to request a comparable mechanism.
• Revisit sourcing and forced-labor diligence. The action rewards origins that move toward enforceable prohibitions, and it sits alongside existing UFLPA and Section 307 enforcement. Strengthening supply-chain traceability now serves double duty, managing this tariff and reducing detention risk under the laws already on the books.

There is also a strategic read worth holding in mind. The two-tier structure is built to reward behavior, and the rates are explicitly framed as adjustable in light of commitments and enforcement. That means the final action could look materially different from the proposal, rates could move, the country tiers could shift as governments respond, products could be added or dropped, and the textile mechanism could be reshaped. Companies that engage the process are not merely defending a position; they are helping to draw lines that may hold for years.

Now What

USTR’s forced-labor action is at once a moral argument and a competition argument, and it is unprecedented in scope. By treating the failure to police forced-labor imports as an unreasonable burden on U.S. commerce, the Trade Representative has opened a new front for Section 301, one that reaches nearly the entire universe of U.S. imports and that will be tested in the comment docket, at the hearing table, and almost certainly in court. The proposal is not yet in force, and its final shape is genuinely open. For importers, that openness is the opportunity. The economies are named, the rates are proposed, the exclusions are drafted, and the deadlines are set. The companies that act inside this window, mapping exposure, modeling the duty stack, and filing precise, well-supported comments, will be the ones that shape the outcome rather than simply absorb it.