US proposes tariffs on 60 countries over forced labor; Taiwan expects favorable treatment

US proposes tariffs on 60 countries over forced labor; Taiwan expects favorable treatment

US proposes tariffs on 60 countries over forced labor; Taiwan expects favorable treatment

(Bloomberg file photo)

[Reporter Zhong Lihua/Taipei] The US has announced a "forced labor 301 investigation report" targeting 60 countries, recommending additional tariffs. The Executive Yuan stated today (3rd) that this is part of the investigation process, and the recommended tax rates are not immediately effective. It expressed anticipation and confidence that the final results will reflect the preferential treatment obtained through negotiation outcomes. (Bloomberg file photo)

[Reporter Zhong Lihua/Taipei] The US has announced a "forced labor 301 investigation report" targeting 60 countries, recommending additional tariffs. The Executive Yuan stated today (3rd) that this is part of the investigation process, and the recommended tax rates are not immediately effective. It expressed anticipation and confidence that the final results will reflect the preferential treatment obtained through negotiation outcomes.

The Office of the United States Trade Representative (USTR) released a report on June 2nd, US Eastern Time, in accordance with Section 301 of the "Trade Act of 1974" on the issue of "import ban on goods produced by forced labor." It recommended imposing an additional tariff of 10% or 12.5% on 60 economies worldwide. Since the US recognized that the "Reciprocal Trade Agreement (ART)" signed between Taiwan and the US has made concrete commitments to enforce the import ban on goods produced by forced labor, Taiwan was included among the 14 countries recommended for a lower tariff rate of 10%. However, the investigation report did not mention the date for the final adoption of measures.

In response, the Taiwan-US Economic and Trade Working Group stated that communication between Taiwan and the US is continuously close and developing positively. The US announcement is part of the 301 investigation process, and the final tariff rate has not yet been determined. Our side anticipates that the US will have further procedures, which may all be part of the process of replacing the legal basis with Section 301, and are still not the final results. Our side expects and is confident that the final results before the end of July will fully reflect the existing negotiation outcomes between Taiwan and the US, obtaining relatively preferential treatment among deficit countries, and fully safeguarding our national interests and industrial interests.

The USTR released the investigation results on June 2nd under Section 301 of the "Trade Act of 1974" for 60 economies worldwide, determining that 54 countries "have not implemented and have not effectively enforced import bans on goods produced by forced labor," and 6 countries "have not effectively enforced import bans on goods produced by forced labor." It recommended imposing additional tariffs of 10% or 12.5%. The USTR recommended an additional lower tariff rate of 10% for 14 countries, including Taiwan, Indonesia, and Malaysia, due to their signing of the "Reciprocal Trade Agreement (ART)" with the US and their commitment to enforce the import ban on goods produced by forced labor, as well as the European Union, Canada, Indonesia, and the United Kingdom, which have implemented or partially implemented import bans on goods produced by forced labor. For 46 countries, including Japan, South Korea, China, and India, it recommended an additional tariff rate of 12.5%. However, the relevant tariff measures were not immediately announced and effective.

The items subject to taxation recommended by the USTR in the report under Section 301 do not include items already subject to Section 232 tariffs and their components, nor items whose taxation would cause domestic US supply shortages. For the proposed additional tariffs, interested parties can submit comments from today until July 6th. A public hearing will be held on July 7th. Within 5 days after the public hearing, interested parties can submit rebuttal opinions. Currently, the USTR has not mentioned the date for the announcement of the final adopted measures in the investigation report or the Federal Register.

The Taiwan-US Economic and Trade Working Group stated that since the US initiated the 301 investigation on March 12th, our country has actively communicated with the US, including submitting written opinions, rebuttal opinions after the public hearing, and bilateral consultations. Our country emphasized that future relevant ministries will use the "Trade Act" as the regulatory legal basis, and will discuss and decide on restricting the import of goods produced by forced labor through our domestic inter-ministerial review process, in order to maintain international supply chains that comply with human rights, resilience, and sustainable governance. The US recognized our country's active and concrete commitments in this 301 investigation report and included us among the 14 countries subject to the lower tariff rate. This shows that ART is a favorable basis for responding to the US investigation under Section 301, which was initiated to replace the legal basis of the "International Emergency Economic Powers Act" (IEEPA).

The Taiwan-US Economic and Trade Working Group emphasized that our country continues to maintain close contact with the US, and we are among the countries that have completed agreements with the US. To maintain the best treatment and relative advantages obtained through ART, our country will continue to communicate closely with the US and fully safeguard our national interests and industrial interests.

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