Trump's new tariffs and the new trade order

A new US tariff regime targeting alleged forced labour practices across global supply chains has set off a gruelling debate among policymakers, businesses, and trade experts.

And this debate revolves around one question: who sets the rules of global commerce in the twenty-first century.

Implemented late last month by the Donald Trump administration, the policy slaps 10% to 12.5% additional levies on goods from sixty countries, which together account for more than 99% of American imports, because they have failed to prevent the importation of goods produced using forced labour.

Administration officials defend the new duties as a necessary step to protect human rights and ensure ethical supply chains, but critics don’t agree. They see it as an important expansion of American economic prowess into the regulatory domains of other nations.

This is a divergence from the past when US enforcement against forced labour would focus on specific products or regions. Laws such as Section 307 of the 1930 Tariff Act prohibited imports made with forced labour, while more recent legislation like the Uyghur Forced Labour Prevention Act (UFLPA) set presumptions against goods originating from particular areas.

The latest tariff measure, however, signals a seismic shift. Instead of focusing primarily on individual shipments or sectors, it evaluates entire national systems, assessing whether countries have enacted and effectively enforced prohibitions on forced labour imports. Those the administration assumes fall short will face additional tariffs.

This approach, trade analysts say, radically changes the nature of enforcement. “It’s no longer just about what is in a container,” said one industry observer. “It’s about whether your entire legal and regulatory framework aligns with US expectations.”

The additional tariffs are rooted in Section 301 of the Trade Act of 1974, a provision used in the past to address unfair trade practices. According to the document, the Trump administration used this mechanism after a February 2026 US Supreme Court order voided the president’s previous attempt to impose broad tariffs under emergency powers.

Now, the Trump administration has introduced layered enforcement architecture, with the long-standing prohibition on forced labour imports at its foundation. On top of that sits targeted legislation like the UFLPA. The newest layer — Section 301 enforcement — extends inquiry to the country level, effectively linking tariff rates to the perceived strength of national compliance systems.

Supporters defend it as necessary in a globalised economy where supply chains involve multiple jurisdictions. They argue that without systemic oversight, goods produced under abusive conditions can easily be rerouted through third countries, evading product-level bans.

However, the growing influence of private organisations in determining compliance is one of the most contested aspects of the new regime. The document highlights the role of the Responsible Business Alliance (RBA), an industry group whose audit frameworks are widely used in electronics and manufacturing supply chains.

Although not a government body, the RBA’s standards are often used by companies to demonstrate adherence to labour requirements. In practice, these audits can serve as critical evidence when firms seek to prove compliance with US regulations.

Similarly, Verite, a nonprofit organisation specialising in labour rights assessments, is described as contributing research and analysis that may inform enforcement decisions. The document raises concerns about the reliability and methodology of such reports, particularly when they rely heavily on secondary sources or are commissioned by interested parties.

For businesses, the implications are clear: compliance increasingly depends not only on national laws but also on meeting the expectations of a broader ecosystem of auditors, certifiers, and industry groups.

Companies operating in international supply chains are already feeling the impact. To maintain access to the US market, many exporters are investing in third-party audits, certification programs, and enhanced due diligence processes.

These measures come at a cost — one that may be particularly burdensome for smaller firms and emerging economies seeking to integrate into global manufacturing networks. In some sectors, industry insiders say, certification at certain levels has effectively become a prerequisite for doing business with major Western brands.

Critics argue that this dynamic risks creating a two-tier system in which only companies able to afford extensive compliance measures can compete. Others counter that the costs are a necessary investment in ethical production and transparency.

The policy is not without controversy within the United States. According to the document, a coalition of 25 states filed a lawsuit in early August seeking to block the tariffs, arguing that they would hike costs for US businesses and consumers.

Economists warn that higher import duties could lead to hikes in prices of a range of goods, from electronics to apparel, potentially exacerbating inflationary pressures. At the same time, some domestic manufacturers may benefit from reduced competition.

The legal challenge underscores the complexity of balancing ethical trade objectives with economic realities. It also highlights the broader political stakes, as policymakers navigate competing priorities in an increasingly interconnected global economy.

Beyond the immediate economic effects, the policy has sparked a wider debate about the future of global trade governance.

The document characterises the US approach as a form of “standard-setting power,” arguing that by defining what constitutes acceptable labour practices and enforcement, Washington effectively shapes the conditions under which countries participate in international commerce.

Supporters of the policy reject that characterisation, stressing that forced labour is widely condemned under international law. They argue that stronger enforcement mechanisms are essential to ensure that global trade doesn’t come at the expense of human rights.

However, even among allies, there is unease about the implications of such unilateral measures. Some governments worry that such policies could erode multilateral frameworks and lead to a more fragmented trade environment.

As the new tariffs take effect, businesses and governments are adjusting to a rapidly evolving global trade environment. For exporters, the priority is clear: demonstrate compliance or risk losing access to one of the world’s largest consumer markets. For policymakers, the challenge is more complex. They must decide whether to align their systems with US expectations, seek exemptions, or pursue alternative trade arrangements.

What is certain is that the debate over forced labour enforcement is no longer confined to ethical considerations alone. It has become a central issue in the geopolitics of trade, touching on sovereignty, economic development, and the balance of power in the global system.

In this sense, the new US tariff regime could mark the beginning of a new era in which trade rules are increasingly shaped by the intersection of law, economics, and values — and by the nations and institutions with the power to define or redefine them.