Latest round of tariffs targets Canada over forced labour enforcement
Prime Minister Mark Carney said Wednesday that he is not surprised by the Trump administration's plan to impose a new 10 per cent tariff on imports from dozens of countries — including Canada — over allegations of inadequate enforcement of bans on goods made with forced labour.
Speaking to reporters Wednesday on Parliament Hill, he said the measure will have little practical effect on most Canadian trade.
"This is not a surprise — it's something that the U.S. has been planning for a few months.”
CUSMA carveouts for tariffs
The proposed tariffs stem from a report released late Tuesday by U.S. trade representative Jamieson Greer's office (USTR), which accused Canada, Mexico, the United Kingdom and several other countries of failing to "effectively enforce" import bans on forced-labour goods.
"The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable," he said in the USTR document. "This creates a dynamic where American workers are forced to compete globally on an unlevel playing field."
The report was the product of an investigation launched in March under Section 301 of the U.S. Trade Act of 1974. Those investigations are designed to give President Donald Trump a more durable legal basis for his tariff agenda after the U.S. Supreme Court struck down his preferred tool — the International Emergency Economic Powers Act — in February.
Following that ruling, Trump imposed a 10 per cent worldwide tariff using Section 122 of the same 1974 Trade Act, but those duties expire after 150 days unless Congress votes to extend them. The Section 301 forced labour tariffs could prove more lasting, but would require further public consultation before taking effect, with Greer scheduled to hold hearings in July, according to the USTR.
A separate, higher tariff of 12.5 per cent is proposed for dozens of additional countries that have only partial or no bans on forced labour in their supply chains.
Consultations and CUSMA
Carney noted that the proposed tariffs include a consultation period of more than 30 days, and that the Canada-U.S.-Mexico Agreement (CUSMA) carveout is explicitly referenced in the decision — meaning goods compliant with the trade deal would be exempted from the new levy.
"That puts us in a position where again, we would still have the best trade deal of any of the U.S. trade counterparts," he said.
The prime minister said the carveout effectively neutralizes the tariff's impact for the overwhelming majority of Canadian exporters.
"When you boil down the action — the U.S. action — and I would note that in effect, how it's drafted, for the vast, vast, vast majority of Canadian trade, it will not have an impact," Carney said.
U.S. criticizes Canada enforcement
While acknowledging Canada's exposure, Greer's news release also recognized steps already taken under CUSMA.
"Some trading partners have taken initial steps to prevent the importation of forced labour goods, including through CUSMA and commitments in Agreements on Reciprocal Trade," Greer said in the USTR document. "However, each of our trading partners must do more to ensure that trade does not perversely encourage and entrench forced labour globally."
The U.S. report was pointed in its criticism of Canada's enforcement record. Although Canada's import prohibition on forced-labour goods came into effect nearly six years ago, the number of enforcement actions taken has been minimal, according to the Canadian Press.
The report also criticized the Canada Border Services Agency for not publishing statistics on its enforcement efforts, and described Canada as a "dumping ground" for re-exports of forced labour products already barred from entering the United States, the Canadian Press reports.
The tariff announcement came just hours after Greer met with Canada-U.S. trade minister Dominic LeBlanc in Washington ahead of a scheduled review of the continental trade pact, according to the Canadian Press. When asked Tuesday about the possibility of new tariffs, LeBlanc said Ottawa had been preparing for the investigation and had discussed with Greer Canada's shared commitment to fighting forced labour.
"We have made submissions to the United States that we think are very significant in addressing the concerns that the United States has raised for a number of months," LeBlanc said, according to the Canadian Press.
No forced labour: Carney
Despite the political friction, Carney was careful to frame Canada's position as aligned with the underlying goals of the U.S. action.
"The motivation to address the proposed tariffs against a variety of countries is something that we share," he said. "Canada has a very strong legislative regime against forced labour in supply chains. We don't want any element of forced labour coming in goods and services."
Carney added that the federal government has been preparing new measures to strengthen Canada's enforcement framework, acknowledging that some earlier changes had fallen short.
"We made some changes earlier this year on things that, candidly, were not as effective," he said. "There are ways we can change things legislatively. We'll be proposing that to the House in the coming weeks, before the House rises."
Canada already has legislation requiring annual reports to the federal government on forced labour in supply chains, and CUSMA contains rules banning forced labour, according to the Canadian Press.
