The United States on Thursday hit dozens of countries — including Canada — with new tariffs over what the Trump administration called their “failure” to stop imports of products made with forced labour.
Sixty countries were targeted overall, with Canada among 17 nations that face a baseline 10 per cent tariff, including Mexico and the United Kingdom.
The remaining countries, which include the European Union, were hit with a 10 to 12.5 per cent tariff rate.
“Today’s action will begin to correct what is both a human rights abuse and distortive trade practice to improve the welfare of workers everywhere,” U.S. Trade Representative Jamieson Greer said in a statement.
The Federal Register notice outlining the new policy says the 10 per cent tariff will not apply to Canadian or Mexican goods traded under the Canada-U.S.-Mexico Agreement on free trade (CUSMA).
It notes that in investigation under Section 301 of the U.S. Trade Act of 1974 found Canada “has failed to effectively enforce its forced labour import prohibition,” which Canada has disputed.
Back when the tariffs were first announced in June, Prime Minister Mark Carney said the proposal was “not a surprise” and were “something that the U.S. has been planning for a few months.”
A statement from Canada-U.S. Trade Minister Dominic LeBlanc on Thursday also said the move was “not unexpected” and was part of “a broader series of unilateral U.S. trade actions.”
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“Canada shares the United States’ objective of ensuring goods produced with forced labour do not enter our supply chains,” LeBlanc said, pointing to Canada’s already “robust” framework to counter forced labour that the government will continue to strengthen.
“We will continue engaging constructively with the United States on this matter, as well as other outstanding issues, over the coming weeks to the mutual benefit of our citizens,” the minister added.
CUSMA includes commitments for Canada and Mexico to adopt stricter forced labour protections for their supply chains. The Liberal government introduced legislation to do just that days after the U.S. announced its proposed tariffs last month, but the bill has not yet been passed into law.
The Canadian Chamber of Commerce noted Canada has prohibited imports of forced labour-produced goods since 2020 along with mandatory supply chain reporting requirements.
The latest Public Safety Canada report to Parliament noted 84 per cent of reporting entities and 65 per cent of government institutions had policies and due diligence processes in place to prevent forced and child labour in their supply chains last year, with both numbers up from the year before.
The report added 91 per cent of organizations that reported to Public Safety Canada told the department that questions on how they’re remediating forced or child labour “did not apply to them as they had not identified any instances of forced labour or child labour in their supply chains.”
“Canada should not be targeted here,” Matthew Holmes, the Chamber’s executive vice president and chief of public policy, said in a statement.
“If the intent is truly to address forced labour, the focus should be a coordinated approach through a multilateral mechanism. The timing of this is somewhat suspect as previous rounds of tariffs sunset.”
The new tariffs will take effect just as temporary 10 per cent worldwide tariffs expire at 12:01 a.m. Friday. U.S. President Donald Trump had turned to those temporary levies after the U.S. Supreme Court struck down his so-called “reciprocal” and national emergency-based tariffs in February.
Now he’s tapping more durable tariffs under Section 301, which permits the president to impose import taxes and other sanctions against countries found to engage in “unjustifiable,” “unreasonable” or “discriminatory” trade practices.
Trump used Section 301 to impose big tariffs on China in his first term, and they survived court challenges.
The new tariffs come as Canada faces the prospect of steep 50 per cent tariffs on a swath of products — including those covered by CUSMA — now set to take effect on Aug. 19.
Trump announced those tariffs earlier this week, which he said were in response to Canada’s retaliatory measures over his initial tariffs as well as supply management import quotas for the Canadian diary industry.
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