Overview
The United States has moved from a temporary 10% tariff to a permanent regime that targets imports from countries deemed insufficient in preventing forced labour. India, after issuing a ban on such goods, will face a 10% duty instead of the proposed 12.5%.
Key Developments
- Temporary 150‑day 10% tariff that began in February 2026 expired on 24 July 2026.
- The U.S. Office of the U.S. Trade Representative launched two investigations under Section 301 of the Trade Act, 1974.
- One investigation concluded that many partners, including India, had not fully prohibited imports made with forced labour.
- India’s recent notification banning such imports earned it a reduced 10% tariff, while 12.5% will apply to other non‑compliant economies.
- Products already covered by Section 232 (steel, aluminium, etc.) retain higher duties of 25%‑50%.
Important Facts
About 70% of India’s export basket – engineering goods, textiles, chemicals, machinery, plastics, leather, gems, jewellery, furniture – will now carry the 10% Section 301 duty on top of existing MFN tariff.
The remaining 8% of exports (steel, aluminium, copper, auto components) continue to face the higher Section 232 rates.
Exemptions have been granted for certain raw materials and for products from countries that have shown commitment to forced‑labour bans, including Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the EU, Guatemala, Indonesia, Jordan, Malaysia, Switzerland, Taiwan, and the United Kingdom.
Exam Relevance
Understanding the U.S. tariff strategy helps answer question