Canada Tells US There’s ‘No Basis’ for Forced Labour Tariffs

Canadian and United States flags are seen flying near Parliament Hill, March 22, 2023, in Ottawa. The Canadian Press/Adrian Wyld

Ottawa told Washington its safeguards against imports made with forced labour are robust enough as the threat of additional U.S. tariffs looms.

The Canadian government filed an official response with the United States Trade Representative (USTR) on July 6, the deadline for doing so.

“Canada respectfully submits that there is no basis for the imposition of additional Section 301 duties on Canadian goods,” says the document. It argues Canada has an existing prohibition against forced labour goods and has introduced new legislative measures to reinforce the regime.

The USTR launched the Section 301 investigation in March into 60 economies to assess whether U.S. trading partners have adopted and are effectively enforcing measures to block imports of goods made with forced labour.

The move came shortly after the U.S. Supreme Court struck down global U.S. tariffs imposed under an emergency authority.

The findings of the investigation, released in early June, concluded that Canada was not effectively enforcing its measures to prevent the importation of goods made with forced labour.

The USTR proposed a 10 percent tariff on imports from Canada and five other economies found to have ineffective prohibitions. It also proposed a 12.5 percent tariff on imports from 54 economies found to have neither imposed nor effectively enforced such prohibitions.

The U.S. Trade Representative says the failure to prevent the importation of goods made from forced labour “burdens or restricts” U.S. commerce due to unfair competition and displaces foreign goods made without forced labour.

Ottawa said in its submission to the USTR that it shares the United States’ commitment to combat forced labour and protect supply chains, noting the introduction of Bill C-35 in June.

The bill would empower the foreign affairs minister to designate a list of high-risk goods. Importers of those goods would be required to provide customs authorities with additional information about their supply chains.

Bill C-35 also aims to improve information-sharing across federal departments to support enforcement.

“This is an area where Canada is willing to collaborate with the U.S. through intelligence sharing and enforcement channels,” says Canada’s submission.

Canada’s submission was one of over 1,500 comments filed before the USTR holds public hearings on the matter from July 7 to 9. Comments were filed by states, businesses, trade associations, and private citizens.

The Canadian Chamber of Commerce told the USTR that it shares the U.S. goal of eliminating forced labour from supply chains and urged it to suspend consideration of a 10 percent tariff on Canada while its “enforcement reforms are implemented and evaluated.”

“Canada’s import prohibition, mandatory reporting regime, and the introduction of Bill C-35 together represent sustained progression toward a stronger enforcement framework,” the Chamber said.

Import Enforcement

Canada has taken legislative steps since 2020 to counter the importation of forced labour goods, but the impact has been minimal.

The latest public data from the Canada Border Services Agency (CBSA) show that from 2020 to 2025, 48 shipments suspected of containing forced labour goods were held by customs. Of those, 37 were released, two were prohibited, seven were re-exported, and one was abandoned.

The two shipments that were prohibited originated from China and contained seafood and textile products. The CBSA also intercepted six auto parts shipments from China, which were subsequently re-exported back to the country of origin.

CBSA official Greame Hamilton told a parliamentary committee in mid-June that automobiles are on a watchlist of goods potentially made with forced labour. Hamilton couldn’t say whether Chinese electric vehicles (EVs) slated to enter the Canadian market will make the list.

Foreign Affairs Minister Anita Anand, who will be responsible to populate the list of high-risk goods under Bill C-35, faced questioning in committee in mid-June on the issue.

“We have evidence of the use of forced labour in the supply chains for these electric vehicles. Can you confirm for the committee that, after the passage of Bill C‑35, you will add Chinese electric vehicles to the list of products made using forced labour?” Bloc Québécois MP Alexis Brunelle-Duceppe said on June 16.

Anand responded that she cannot confirm what will be on the list at this time. “In the fall, during the next parliamentary session, we'll have a list,” she said.

Canada made a tariff deal with China in January to allow the import of up to 278,989 Chinese EVs at a preferential tariff rate.

United States Trade Representative Jamieson Greer, who oversees the forced labour goods investigation, pointed to the Ottawa-Beijing deal last week to explain in part why the United States chose not to renew the Canada-United States-Mexico Agreement (CUSMA) on free trade.

“What I don’t want is a situation where Canada is bringing in a lot of Chinese investment and Chinese cars and sending them into America,” Greer told Global News on July 2.