Global Trade Weekly — 2026-06-05

Top Stories

US Proposes Broad Tariff Action on Forced Labor Grounds

The Office of the U.S. Trade Representative announced proposed tariffs affecting 60 economies on June 3, 2026, based on alleged failures to ban forced labor imports. The proposal sets a 10% duty rate for countries with full or partial forced labor prohibitions—including Canada, Mexico, and the EU—and 12.5% for all others, including China, India, Taiwan, and Australia.

The tariffs are not yet final and come despite the Trump administration's stated commitment to balancing protectionism with economic realities. The move threatens to unsettle key allies and derail ongoing trade negotiations, particularly with India, where Commerce Minister Piyush Goyal had recently signaled the India-US trade deal was down to "finalising the commas and full stops."

US-China Board of Trade Opens Path for Selective Tariff Cuts

In a contrasting development, the USTR opened a public comment period on June 3, 2026, regarding the "U.S.-China Board of Trade"—an initiative agreed by both countries' leaders last month that could lead to mutual tariff reductions on non-strategic goods. This signals a willingness to negotiate relief for specific sectors, even as the broader forced-labor probe expands the tariff net.

EU Braces for Dual Trade Front

The EU faces simultaneous pressure from the new US forced-labor tariffs and mounting concerns over Chinese industrial overcapacity. Bloomberg reported on June 3 that Brussels is preparing for a "tariff battle" on two fronts, as the bloc contemplates its own Section 301-style trade defense tools against Beijing while navigating the threatened 10% US levies.

Tariff & Sanctions Tracker

• Canada, Mexico, EU: 10% proposed duty under Section 301 forced labor probe; effective date pending comment period (June 3 announced).

• China, India, Taiwan, Australia, UK, and 54 other economies: 12.5% proposed duty under same probe; effective date pending finalization.

• US-China Non-Strategic Goods: Potential tariff reductions under Board of Trade; public comment period open as of June 3, 2026 (no effective date set).

By the Numbers

• 60 economies targeted by new US forced-labor tariff proposal, spanning all major trading blocs.

• 10% vs. 12.5% rate split: Countries with full/partial forced labor bans face lower tariffs; others face higher rates.

• India-US trade deal at risk: Negotiations were near completion when USTR named India among countries with unfair trade practices under Section 301.

Regional Spotlight

India Caught Between Deal-Making and Tariff Threat

India faces an unusual situation: ongoing bilateral trade negotiations with the US are near completion, yet the Office of the U.S. Trade Representative has named India among countries with alleged forced labor trade practices, proposing a 12.5% tariff under Section 301. Commerce Minister Piyush Goyal had indicated the deal was in final stages on June 2, suggesting the tariff proposal may be a negotiating tactic or reflect disagreements over labor standards enforcement. This creates uncertainty for Indian exporters in sectors like textiles, agriculture, and manufacturing.

What to Watch Next Week

• Public comment period closing on Board of Trade tariff cuts (expected mid-June; date TBD)—outcome will signal whether US-China selective relief materializes before broader tariffs take effect.

• Final tariff rates on forced labor grounds—USTR will announce which of the 60 targeted countries face 10% vs. 12.5% duties, likely by late June.

• India-US trade deal finalization—negotiations could accelerate or stall depending on whether forced labor tariff threat is withdrawn or incorporated as leverage.

• EU response framework—Brussels may announce own retaliatory measures or join complaints at the WTO if 10% US tariffs on the bloc are formalized.