Forced labour or leverage: What Trump's new tariffs are really about

The Trump administration says it’s hitting Canada and dozens of other countries with double-digit tariffs because they’re not doing enough to fight forced labour — but not everyone is convinced.

United States Trade Representative Jamieson Greer announced the new duties Thursday, just hours before a different stopgap tariff authority was set to expire.

Many observers say the rushed trade investigations into forced labour show it’s only a pretext allowing U.S. President Donald Trump to rebuild his tariff wall around the United States.

Canada is being lumped in with countries like Bangladesh, Cambodia, and Sri Lanka that are getting hit with 10 per cent duties, while other countries face a 12.5 per cent levy.

Scott Lincicome of the Washington-based Cato Institute said that while forced labour needs to be stamped out, the Trump administration’s justification is a “sham.”

In an analysis published Thursday, Lincicome wrote the findings of the trade investigations were clearly predetermined and the “remedy is both ridiculously blunt and wildly out of proportion.”

The Trump administration launched trade investigations earlier this year through Section 301 of the Trade Act of 1974 after the U.S. Supreme Court in February struck down the tariff tool Trump used for his “Liberation Day” and fentanyl-related duties.

To temporarily replace his tariffs, Trump used Section 122 of the Trade Act of 1974 for a 10 per cent global duty. That statute was set to expire Friday — the same time the new 301 tariffs went into effect.

“The Americans need the threat of tariffs to force other countries to accept new American trade demands,” said Carlo Dade, director of international policy and the New North America Initiative at the University of Calgary’s School of Public Policy.

Dade said the 301 tariffs are a means to get countries to agree to higher tariffs going forward.

Several of the countries targeted — India, the United Kingdom and Cambodia, to name three — already have agreements on reciprocal trade with the Trump administration. These new tariffs are likely meant to pressure countries to stick to those agreements or — in the case of countries like Canada — sign new ones with the United States.

“Once countries agree, the rationale (of forced labour) is no longer needed,” Dade said in an email.

The Canadian government previously told the Trump administration that new legislation on forced labour in supply chains should shield Canada from the new tariffs.

Canada already had legislation in place to curb forced labour in supply chains which requires annual reports to the federal government. The federal government tabled a bill last month, C-35, to boost enforcement.

C-35 would create a public list of products that have been linked to forced labour in specific regions, based on intelligence from embassies and other authorities. It would require importers to prove that specific products from listed regions were not made through slavery.

While Canada has been accused domestically of not doing enough to enforce its forced labour laws, some observers point out that its efforts are miles ahead of other nations hit with the same U.S. tariffs.

Former Liberal MP John McKay has said the United States accusing Canada of winking at forced labour amounts to “hypocrisy heaped on hypocrisy.”

The United States allows private firms to produce exports made with prison labour. McKay also accused the Trump administration of letting enforcement slide on a Joe Biden-era law called the Uyghur Forced Labour Prevention Act.

Jamie Tronnes of the Center for North American Prosperity and Security, a project of the Macdonald-Laurier Institute, said the Trump administration is seeking leverage in trade talks with Canada through the forced labour tariff.

The new tariffs do not apply to goods compliant under the Canada-U.S.-Mexico-Agreement on trade, known as CUSMA. Tronnes said the message from Washington is clear: “It shows Canada that if (CUSMA) goes away entirely, that Canada is looking at a best-case scenario of 10 per cent tariffs.”

“While we don’t know what the tariff proposals are behind the scenes, the idea may be to push Canada to accept an American tariff on goods in exchange for a lower than 10 per cent rate,” she said in an email.

Even if Canada meets all the Trump administration’s demands on forced labour in supply chains, experts say it’s unlikely the tariffs will go away entirely.

The new tariffs are facing pushback in court already. The Liberty Justice Center — which took part in the successful challenge of Trump’s previous tariff tool — filed a complaint Friday with the U.S. Court of International Trade on behalf of two small businesses which import goods.

But the 301 tariffs could prove to be harder to knock down than the previous ones. Trump used Section 301 to impose big tariffs on China in his first term, and they survived court challenges.

Tronnes said the new tariff threats may affect the ongoing review of the continental trade pact.

Trump on Monday ramped up pressure on Canada by threatening to impose 50 per cent tariffs on an array of Canadian goods next month, using Section 338 of the Tariff Act of 1930.

Tronnes said it’s clear the Trump administration is doubling down on tariffing all of America’s largest trading partners, regardless of trade surpluses or existing free trade agreements.

“The president has repeatedly demonstrated that he is willing to use tariffs on countries that have already made deals with him, and, with the new 338 tariffs, that he is willing to override even free trade agreements that have been ratified by Congress.”

This report by The Canadian Press was first published July 24, 2026.

— With files from Kyle Duggan in Ottawa and The Associated Press