The Trump Administration intends to impose tariffs on goods from 60 economies that allegedly don’t prevent forced labor – i.e., slavery – including Israel.

This follows a US Treasury report of June 2 on forced labor in response to US court rulings that struck down high tariffs imposed last year under different rules.

While most countries ban slavery, they seemingly don’t ban imports from other countries where slavery may exist. Such imports allegedly lead to unfair exports to the US.

Will Trump have his way? Here’s a summary of the US Treasury’s report.

For nearly 100 years, the United States has prohibited the importation of goods produced with forced labor under Section 307 of the Tariff Act of 1930. The use of forced labor across the world continues to persist, and has even increased in recent years. Section 307 of the Tariff Act of 1930 defines “forced labor” as “all work or service which is exacted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself voluntarily”.

The US Treasury invokes the United Nations’ Universal Declaration of Human Rights (1948): “No one shall be held in slavery or servitude; slavery and the slave trade shall be prohibited in all their forms.”

The United States Trade Representative initiated 60 investigations that included an examination of the acts, policies, and practices of 60 economies from which 99.40% of US imports are shipped. All failed the exam.

The failure of each of the investigated economies to impose and effectively enforce a forced labor import prohibition is unreasonable. Forced labor artificially increases comparative advantages and contributes to unfair export competitiveness. Forced labor goods compete widely in global markets.

Where are the slaves?

According to an International Labor Organization (ILO) report cited in the US Treasury report (Global Estimates of Modern Slavery, Forced Labor, and Forced Marriage), there were 27.6 million persons in forced labor in 2021. They were located in: Asia and the Pacific at 15.1 million; Europe and central Asia at 4.1m; Africa 3.8m; Americas 3.6m; Arab states 0.9m.

Where in Asia? The US Treasury cites Page 15 of the Countering America’s Adversaries Through Sanctions Act (CAATSA) and the Uyghur Forced Labor Prevention Act (UFLPA), which create rebuttable presumptions prohibiting the entry of goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part by North Korean labor or in the Xinjiang Uyghur Autonomous Region, respectively.

According to the ILO, forced labor includes non-payment of wages (36%), abuse of vulnerability (21%), direct threat (19%), and financial and debt manipulation (15%).

Where does the data come from? The principal sources are data from nationally representative household surveys (ILO Report Page 12).

For products from economies that have imposed a forced labor import prohibition but have failed to enforce it, the US Treasury’s Trade Representative proposes a 10% rate of additional duties. This refers to: Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan.

The US Trade Representative proposes a 12.5% rate of additional duty for products from  economies that have failed to impose a forced labor import prohibition.

This applies to the following 54 economies: Algeria; Angola; Argentina; Australia; the Bahamas; Bahrain; Bangladesh; Brazil; Cambodia; Chile; China; Colombia; Costa Rica; Dominican Republic; Egypt; El Salvador; Guatemala; Guyana; Honduras; Hong Kong, China; India; Iraq; Israel; Japan; Jordan; Kazakhstan; Kuwait; Libya; Malaysia; Morocco; New Zealand; Nicaragua; Nigeria; Norway; Oman; Peru; the Philippines; Qatar; Russia; Saudi Arabia; Singapore; South Africa; South Korea; Sri Lanka; Switzerland; Taiwan; Thailand; Trinidad and Tobago; Turkey; United Arab Emirates; United Kingdom; Uruguay; Venezuela; and Vietnam.

The US Treasury says that its investigation found that Israel has failed to impose and effectively enforce a forced labor import prohibition. Therefore, Israel is on the 12.5% duty list.

The public is invited to provide written comments by July 6, 2026. The USTR will hold hearings about the proposed actions on July 7, 2026. After that, we will await the final announcement.

Is the Trump administration scraping the bottom of the barrel in its latest attempt at raising US tariffs?

Assuming these proposals are finalized, it is unclear to us why the US-Israel Free Trade Agreement doesn’t prevent these tariffs on Israeli products. Nevertheless, it seems that only physical goods will be potentially affected, rather than digital products and services. So, the Israeli hi-tech sector will be largely unaffected by the tariffs – except for medical and other physical devices.

As always, consult experienced professional advisers in each country concerned at an early stage in specific cases.

leon@hcat.co The writer is a certified public accountant and tax specialist at Harris Consulting & Tax Ltd.