At the beginning of June, the Office of The US Trade Representative released his recommendations in a Section 301 investigation of 60 economies for their alleged “failure to impose and effectively enforce a ban on the importation of goods produced with forced labor.” THE current proposal has one major flaw: it evaluates trading partners on a single criterion, namely whether they prohibit and enforce restrictions on trade in goods made with forced labor. It does not take into account the risk of forced labor within the production system of each country.
As a result, the USTR recommended that China receive the same 12.5 percent tariffs as Japan, Australia, Norway and Switzerland, despite fundamental differences in the scale, institutional entrenchment and global reach of its rollback of labor standards. No credible risk-based framework would treat these countries the same way.
The Section 301 proposal aims to address trade distortions, but it remains an incomplete solution. If the goal is a fairer global trading system, policy must also address one of the underlying causes of these distortions: the long-standing repression of labor in production itself.
In my opinion, Section 301 tariffs cannot directly or immediately improve working conditions in the targeted economies; they do not replace the application of labor laws. At most, they force governments and businesses to confront the true cost of their production model. These economies have little incentive to raise labor standards themselves, as much of their competitive advantage relies on removing them. A tariff only increases the cost of access to the American market. But when that advantage depends on keeping labor costs artificially low, increasing those costs is precisely the lever that matters.
USTR has already recognized that countries that fail to eliminate forced labor gain a cost advantage at the expense of law-abiding businesses and American workers. China is the main beneficiary of this advantage due to the scale of its manufacturing economy. Yet the current proposal applies the same tariff rate to China as countries with much lower systemic risk, undermining the incentive structure that tariffs are intended to create.
China is expected to face a higher tariff rate as it poses a high risk to labor and has a dominant position in the global manufacturing sector. The two combine: the same suppression of labor costs that would distort competition anywhere does much more damage when applied across China. Under a uniform, objective and risk-based framework, a higher tariff rate for China would naturally follow.
Let me cite just one example. Despite years of repeated public commitments by Apple and its supplier, Foxconn, to improve working conditions at China-based factories, our most recent survey in 2025 found that little had changed at Foxconn’s Zhengzhou campus, which employed more than 200,000 workers at its peak. Employees commonly worked six or seven days a week, often exceeding 70 hourswhile wages were delayed or partially withheld, making it difficult to get them out of the factory.
Some argue that the workers chosen these conditions, but this argument ignores the institutional constraints that shape choice of workers. In China, rural livelihoods are no longer enough to support many families, forcing millions to migrate for work. THE hukou The system further separates migrant workers from their families and leaves them without equal access to urban social protection. These structural conditions produce working conditions that correspond to several indicators of forced labor, including abuse of workers’ economic vulnerability, excessive overtime, withholding of wages and restrictions on workers’ freedom to resign.
The most common objection to U.S. Section 301 tariffs is that they will ultimately harm the workers they are intended to protect. Similar arguments have also been made in the past; Before China’s Labor Contract Law came into force in 2008, some business groups warned that tougher labor protections would raise costs and destroy jobs, while some economists predicted mass unemployment. International brands have also defended chronic overtime by arguing that workers want overtime. None of these predictions ever came to fruition.
In China, legal protections on working hours, overtime pay and social insurance remain largely unenforced. Many factory workers still earn little more than a living wage, lack legally required social insurance, and regularly work well beyond legal overtime limits. A labor-based rate under Section 301 does not create these labor issues. Instead, it shifts the current burden of low-cost production – long borne by workers – to businesses themselves.
The good news is that there are signs that international pressure is starting to change corporate behavior. BYD’s overseas projects have faced enforcement of labor laws in Brazil and Hungary. U.S. Customs continues to issue detention orders against Chinese companies. From 2027, the European Union will apply its forced labor regulations.
Under this growing pressure, Chinese government agencies and industry groups have begun to issue forced labor compliance standards. Furthermore, China’s new rules for overseas investmentfor the first time, explicitly requires Chinese companies to invest abroad to protect workers’ rights and comply with local laws. These legal changes suggest that labor standards are beginning to shape policy in Beijing itself – and that companies are beginning to reassess the legal and business risks associated with labor abuses.
Tariffs may create an opportunity to improve working conditions, but there is no guarantee that this will actually happen. Any government considering this tool must carefully weigh its costs and understand that it could fail.
However, the consequences of maintaining the status quo are already visible. According to Beijing’s own figures, workplace accidents killed 106,399 people between 2021 and 2025, an average of nearly 60 deaths per day. And this figure excludes occupational diseases, deaths due to overwork and unrecorded fatal workplace accidents. The sixty-hour workweek remains common despite two decades of corporate commitments. Meanwhile, American jobs continue to be lost to production systems that compete by suppressing labor standards.
Labor-based tariffs have only an uncertain chance of changing incentives, but doing nothing ensures that workers in China and the United States will continue to bear the costs. Of the tools available to the U.S. government, a labor-based fee schedule is the only one designed to ensure that labor law violations incur an economic cost. The goal is not to punish countries but to make compliance with labor standards more competitive than removing them.
To shape companies’ business practices over the long term, U.S. Section 301 tariffs must be based on clear rules rather than ad hoc policy decisions. Only when tariff rates are transparent, predictable and linked to measurable indicators of a country’s economic scale and working conditions will governments have real incentives to improve labor standards, and only then will businesses begin to view compliance with labor standards as part of their long-term business strategy, rather than simply a short-term response to tariffs.