By Dr. Andrea Zavatto

The trade policy of the United States has added a new chapter that confirms the growing importance of labor standards as a condition for access to its market The Office of the United States Trade Representative (USTR) announced that, following the conclusion of investigations initiated into sixty economies, including Argentina, it determined that the failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor constitutes an unreasonable practice and a restriction on U.S. trade.

On that basis, it proposed the imposition of additional tariffs ranging from 10% to 12.5% on imports originating from the countries covered by the measure. The proposal will remain open for written comments until July 6 and includes a public hearing scheduled for July 7.

Section 301 as the Legal Basis for the Measure

The legal instrument used is Section 301 of the Trade Act of 1974, which authorizes the U.S. Trade Representative (USTR) to respond to practices by trading partners that it considers unreasonable or discriminatory and that burden or restrict U.S. commerce.

Its use is no coincidence. After the U.S. Supreme Court struck down much of the global tariffs imposed under emergency powers in February, Section 301 has emerged as an alternative mechanism for rebuilding that trade policy on a stronger legal foundation.

The underlying rationale remains the U.S. prohibition on the importation of goods produced with forced labor, a restriction that applies not only to the final product but also to intermediate inputs used throughout the supply chain. Until now, this control had been enforced primarily through customs mechanisms. The new development is that the same standard is now beginning to be reflected as an explicit tariff variable as well.

What would be the implications for Argentina?

In the case of Argentina, the most relevant aspect is that the proposed tariff would be 10%, rather than 12.5%.

The USTR reserved the lower tariff rate for those economies that have a prohibition on the import of goods produced with forced labor, that have undertaken commitments to implement such a prohibition through agreements with the United States, or that maintain partial regimes producing a similar effect.

Although the report concludes that Argentina does not currently impose nor effectively enforce a prohibition of this nature, it explicitly acknowledges the commitments undertaken under the Reciprocal Trade and Investment Agreement signed with the United States in February of this year, which has not yet entered into force.

It is precisely this commitment that would allow Argentina to be placed within the category subject to the 10% tariff.

So far, the report does not specify which products would be covered or what the concrete implementation mechanism of the measure would be.

The forced labor standard required by the United States.

The USTR report defines the prohibition on the importation of goods produced with forced labor as an unequivocal legal ban, distinguishing it from transparency regimes, due diligence obligations, or voluntary disclosure systems.

Likewise, it maintains that the United States is currently the only economy that effectively applies and enforces a comprehensive prohibition of this nature.

For this reason, the recognition of the commitments undertaken by Argentina acts as a mitigating factor, although their effective implementation remains pending.

Labor traceability as a new factor of competitiveness

The relevance of this proposal goes beyond the tariff issue.

Labor traceability and verifiable commitments regarding supply chains are no longer solely a reputational matter; they are becoming a technical variable that can directly affect access to the U.S. market and export costs.

The proposal also contemplates a specific mechanism for certain textile and apparel products, which would allow the entry of certain volumes at a reduced rate under Section 301.

What should exporting companies review?

For Argentine companies with operations linked to the United States—whether as direct exporters, suppliers of inputs, or participants in regional value chains with a final destination in that market—the scenario takes on a concrete dimension.

In this context, it is advisable to review:

The origin of critical inputs used in production.
The traceability of direct and indirect suppliers.
Internal labor due diligence policies.
Supply chain audit and control mechanisms.
Available documentation to substantiate reasonable compliance standards.

Next steps

The USTR-established timeline provides for:

Submission of requests to participate in the hearing: until June 22.
Submission of written comments: until July 6.
Public hearing: July 7.

This period will allow for a clearer understanding of the final scope of the measure and an assessment of the potential impacts on the companies involved.

Conclusion

Controls related to forced labor initially operated as a non-tariff barrier aimed at regulating the entry of goods into the U.S. market. However, the USTR proposal evidences a significant shift: these standards are now also being reflected as an explicit tariff variable.

In this context, the management of labor traceability and the monitoring of supply chains are consolidated as essential tools for the management of commercial and regulatory risk in relations with the United States.

Dr. Andrea Zavatto

Attorney – Specialist in Customs Law, Foreign Exchange Law, and Legal Metrology
Director – MJE Comercio Exterior SRL
Socia Consultora – MJE Global (USA)
Dirección General – Dumping Experts

Article originally published in Ámbito Financiero.