USTR initiates Section 301 investigations on failure to impose import bans on forced labour products

On 12 March 2026, the Office of the U.S. Trade Representative (USTR) initiated new investigations under Section 301 of the U.S. Trade Act of 1974 into the acts, policies, and practices of various economies, including India, relating to their alleged failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labour.

According to the USTR, in the absence of such prohibitions, firms can continue to import, use, and profit from goods made with forced labour, distorting competition and harming U.S. workers and producers.

Through these investigations, the USTR will assess whether the alleged failure of these economies, including India, to prohibit the importation of goods produced wholly or in part with forced labour constitutes an unreasonable or discriminatory act that burdens or restricts U.S. commerce.[1]

[1] USTR initiation notice identifies 60 countries, including China, the European Union, Canada, India, Indonesia, Japan, Malaysia, Thailand, and Vietnam, as economies that may have failed to impose and effectively enforce a prohibition on the importation of goods produced with forced labour.

Section 301 authorises the USTR to investigate and respond to foreign government acts, policies or practices that are considered unreasonable, discriminatory, or otherwise burden or restrict U.S. commerce.

The provision forms part of U.S. domestic trade law and operates independently of WTO trade remedy disciplines.

Historically, Section 301 has been used in a range of contexts, including:

• Intellectual property protection
• digital trade restrictions
• market access barriers
• industrial subsidies and technology transfer practices

In the present investigations, the USTR is examining whether the countries under investigation maintain, or are in the process of establishing, a forced labour import prohibition, and whether any such prohibition is being effectively enforced. It is also examining how the absence or ineffective enforcement of such bans may negatively affect U.S. commerce. These negative effects may stem from the unfair cost advantages enjoyed by companies that incorporate forced labour-made products into their supply chains, as well as from the resulting loss of export opportunities for U.S. firms, downward pressure on product prices, and the consequent depression of wages for U.S. workers.

If USTR finds the practices “actionable”, the U.S. administration can impose additional customs duties, quotas, licensing restrictions or other non-tariff measures on imports from the concerned country and can also suspend any existing trade concessions.

Initiation: The investigations were initiated on 12 March 2026.

Creation of Trade Policy Staff Committee: Section 301 investigations are conducted by a “Section 301 Committee”, established as a subordinate, staff-level body of the USTR-led Trade Policy Staff Committee (TPSC). This Section 301 committee will investigate the issue, conduct public hearings and make recommendations to the TPSC regarding potential actions under Section 301. USTR bases its decision on recommendations provided by the TPSC.

Public comment phase and hearings:

The USTR has opened electronic dockets for submission of written comments and requests to appear at hearings.

• Deadline for written comments and hearing requests: 15 April 2026
• Public hearings: 28 April 2026 to 1 May 2026 (Washington D.C.)
• Post-hearing rebuttal comments: 7 days following the hearing
• Content of comments: USTR invites views on whether (i) countries maintain or are establishing a forced labour import ban; (ii) whether any such ban is effectively enforced; (iii) the extent to which failures are unreasonable or discriminatory and burden U.S. commerce; and (iv) what actions (for example, duties or import restrictions) should be taken.

Who can participate in these investigations? Exporters, industry associations, and other stakeholders may participate in these proceedings.

Consultations: Following initiation, the USTR must request consultations with the governments concerned. These consultations provide an opportunity for the Government of India to explain India’s existing legal and enforcement framework on forced labour, respond to U.S. concerns about the absence or effectiveness of an import ban on forced labour goods, and seek to narrow or avoid any resulting trade measures.

Determinations and Implementation: Following consultations, USTR conducts an investigation to determine if the alleged conduct is unfair and harms U.S. trade and whether to take retaliatory action. Section 301 divides actions into mandatory and discretionary categories.

They are as follows:

• If USTR concludes there is a violation of a trade agreement or that an act, policy, or practice of a foreign government is “unjustifiable” and “burdens or restricts” U.S. commerce, action is mandatory.
• On the other hand, if the USTR determines that an act, policy, or practice of a foreign government is “unreasonable” or “discriminatory” and “burdens or restricts” U.S. commerce, action is discretionary.

USTR generally aims to make this determination within about 12 months of initiation, though timelines can vary. If it finds a violation, USTR then decides what remedial action to take.

Retaliatory Action: If action is imposed, USTR must seek public comments on proposed measures and can later modify, suspend or terminate them.

Timelines: Section 301 actions are formally time-bound to four years but can be extended following a review and requests from interested parties. This means measures can, in practice, remain in place or be adjusted over a longer horizon.

The Section 301 investigations appear to be premised on the view that the United States maintains a comprehensive legal framework prohibiting the importation of goods produced with forced labour, while other countries allegedly lack comparable prohibitions or effective enforcement.

Under U.S. law, imports produced wholly or in part with forced labour are prohibited through several statutory and enforcement mechanisms. These tools enable U.S. authorities to restrict market access for goods suspected of being linked to forced labour and form an important part of U.S. trade and supply-chain enforcement policy.

• Uyghur Forced Labour Prevention Act (UFLPA): The UFLPA creates a rebuttable presumption that any goods mined, produced, or manufactured wholly or in part in China’s Xinjiang Uyghur Autonomous Region, or by certain listed entities, are made with forced labour and, therefore, barred from entry into the United States. Importers can only overcome this presumption with extensive documentation tracing supply chains and proving the absence of forced labour.
• U.S. Customs and Border Protection’s (CBP) Withhold Release Orders (WROs) and Findings: Under Section 307 of the U.S. Tariff Act, CBP can issue WROs directing ports to detain imports where there is information reasonably indicating that goods are made with forced labour. Where CBP later issues a Finding, those goods must be excluded or seized. WROs and Findings can apply to specific companies, facilities, or products from particular countries. In practice, this means that exporters whose inputs or products are subject to a WRO may find shipments detained at the U.S. border unless they can provide convincing evidence that their own supply chains are free of forced labour.
• U.S. Department of Labour “List of Goods Produced by Child Labour or Forced Labour”: The Bureau of International Labour Affairs (ILAB) under the U.S Department of Labour maintains a List of Goods Produced by Child Labour or Forced Labour (TVPRA List). This list identifies goods and source countries where forced labour risks have been documented.

While the list is not, by itself, an import ban, it is widely used by U.S. companies and CBP as a risk-screening tool. TVPRA List currently includes 169 goods and 42 downstream goods produced with forced labour in particular countries.

While U.S. law already restricts the entry of goods linked to forced labour into the U.S. market, the focus of these investigations extends beyond the characteristics of products entering the United States and examines whether other countries maintain comparable prohibitions on their own imports.

The timing of these investigations is also notable. They come shortly after the reciprocal tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were struck down by the U.S. Supreme Court in Learning Resources, Inc. v. Trump. In that context, the renewed use of Section 301 suggests that the United States may increasingly rely on established trade enforcement tools within its domestic trade law framework to address broader economic and supply-chain concerns that were previously pursued through emergency tariff measures.

Although the investigations do not immediately result in new duties, it creates the possibility of future trade restrictions.

Indian exporters may therefore consider the following actions:

• Participation in the USTR process: Indian exporters may consider engaging in the investigations themselves, or through trade associations, and key U.S. customers. Written submissions can place relevant information on record, including sectoral production practices, supply chain structures, and existing labour compliance and audit mechanisms followed by exporters. Such submissions may help demonstrate that the products and supply chains concerned are not associated with forced labour risks.
• Engagement with the Government of India: Stakeholders may also consider engaging with the Government of India on possible policy responses to concerns relating to the importation of goods produced with forced labour. Such engagement could explore whether additional measures, including targeted import restrictions or due diligence requirements, may be appropriate. Demonstrating credible domestic safeguards may help mitigate the likelihood of trade-restrictive measures being applied to Indian exports.
• Contractual and commercial safeguards: Businesses may consider reviewing their existing and new contracts with the U.S. buyers to clarify tariff and trade-policy risk allocation, including price-adjustments or renegotiation clauses triggered by material tariff or non-tariff changes.
• Market diversification: Where feasible, exporters may also consider diversifying markets, product lines or production locations to reduce exposure to potential U.S. trade measures.

The initiation of Section 301 investigations targeting the absence of forced labour import bans represents a notable development in the use of U.S. trade enforcement tools. Unlike traditional Section 301 cases that focus on market access barriers or discriminatory trade practices, these investigations examine whether trading partners maintain domestic regulatory frameworks comparable to those adopted by the United States to restrict the entry of forced labour goods.

In effect, the investigations extend scrutiny beyond the characteristics of products entering the U.S. market and into the regulatory approaches maintained by other economies.

For Indian exporters, the immediate priority will be to understand their supply chain exposure, strengthen forced labour due diligence and documentation, and consider engaging constructively in the USTR process where appropriate.

We trust you will find this an interesting read. For any queries or comments on this update, please feel free to contact us at insights@elp-in.com or write to our authors:

Sanjay Notani, Partner – Email – SanjayNotani@elp-in.com

Parthsarathi Jha, Partner – Email – ParthJha@elp-in.com

Naghm Ghei, Associate Partner – Email – NaghmGhei@elp-in.com

Aayush Rastogi, Principal Associate – Email – AayushRastogi@elp-in.com