USTR targets forced-labor imports, raising supply chain costs for Target

Forced-labor enforcement just moved from a trade-law issue to an operational risk for Target’s shelves. The U.S. Trade Representative said 60 economies, including major trading partners such as Canada, the European Union, Mexico and the United Kingdom, had acted in ways the agency found unreasonable and burdensome to U.S. commerce under Section 301, setting up new duties that could change sourcing costs, customs clearance and product flow before goods ever reach stores.

USTR’s June 2 action proposed additional duties of 10% or 12.5%, depending on the country. The lower rate would apply to economies that already prohibit forced-labor imports, have committed to do so through an Agreement on Reciprocal Trade, or have a partial regime that blocks some forced-labor goods. The higher rate would apply to the rest of the investigated economies. USTR also said the package would include a textile mechanism, a detail that matters for retailers with heavy apparel and home goods exposure.

The agency’s June 5 Federal Register notice sharpened the stakes. It said 54 of the 60 investigated economies failed to impose and effectively enforce a forced-labor import prohibition, while six failed to effectively enforce one. Written comments are due July 6, 2026, and public hearings are set for July 7, 2026, at the U.S. International Trade Commission in Washington, D.C. For Target’s merchandise, legal and supply-chain teams, that means vendor files, country-of-origin records and forced-labor screening will need to be audit-ready well before any tariff decision lands.

The scale is what makes this especially relevant for a mass-market retailer. USTR’s March 12 initiation said the 60 economies are among the United States’ largest trading partners, and a legal analysis cited by Baker McKenzie says they account for more than 99% of U.S. imports. That means the policy could ripple far beyond a narrow group of suppliers and into categories that depend on fast, low-cost replenishment.

Reuters reported that the proposal followed a February Supreme Court ruling striking down earlier Trump emergency tariffs, adding another layer of uncertainty for companies trying to police sourcing. Human Rights Watch’s Helene de Rengerve warned that forced labor is a global problem and said singling out countries based on trade volume could be counterproductive. For Target, the practical read is simple: tighter documentation, faster supplier vetting and more contingency planning now could reduce the odds of shipment holds, sudden cost spikes and reputational damage later.