Executive Yuan: Taiwan Classified Among Lower-Risk Economies in U.S. Section 301 Forced Labor Import Investigation

The Ministry of Economic Affairs (MOEA) announced on June 3 that, according to the findings of the Office of the United States Trade Representative (USTR) under its Section 301 investigation concerning import prohibitions on goods produced with forced labor, Taiwan has been designated as one of 14 economies assessed as presenting a relatively lower level of risk. As a result, the USTR has proposed an additional 10% tariff on Taiwan, compared with the proposed 12.5% tariff on other economies.

At present, U.S. tariff measures primarily consist of duties imposed under Section 232 investigations of the Trade Expansion Act, covering products such as steel, aluminum, copper, automotive components, timber, semiconductors, and pharmaceuticals, as well as transitional tariffs imposed pursuant to Section 122 of the Trade Act of 1974. The United States invoked Section 122 on February 24 of this year as an interim legal basis to maintain tariff measures following a court ruling. The Section 122 measures are scheduled to expire on July 24, 2026. Prior to that date, the U.S. government expects to conclude its Section 301 investigation and announce final tariff rates. Accordingly, tariff measures are anticipated to transition to the Section 301 framework, and no cumulative application of tariffs under both Sections 122 and 301 is expected.

On March 12, the USTR initiated an investigation covering 60 economies to assess whether they had effectively implemented and enforced import prohibitions on goods produced with forced labor. The determination process was completed on June 2. During the investigation, the USTR reviewed testimony from nearly 60 witnesses and more than 500 written submissions. The findings concluded that 54 economies, including Taiwan, had not fully implemented or effectively enforced bans on the import of goods produced with forced labor. According to the USTR, such shortcomings undermine global efforts to eradicate forced labor and may distort market competition while creating unfair disadvantages for compliant businesses.

Taiwan has already signed the Agreement on Reciprocal Trade (ART) agreement with the United States and will continue consultations to safeguard its preferential tariff treatment and competitive position. The next stages of the U.S. process include submitting requests to participate in public hearings and witness testimony summaries by June 22, written comments by July 6, and a public hearing on July 7, after which rebuttal submissions will also be accepted.

Source: MOEA