US Forced Labor Tariffs Exempt T-MEC-Compliant Goods, Mexico Says

Mexico City — The proposed 10% US tariff on imports linked to forced labor will not apply to goods that comply with the United States-Mexico-Canada Agreement (USMCA), Mexico’s Economy Ministry said Wednesday.

The Office of the US Trade Representative (USTR) on Tuesday proposed a 10% tariff on Mexican imports as part of a broader investigation into forced labor. The proposal, made under Section 301 of the Trade Act of 1974, would affect 60 economies, with tariffs ranging from 10% to 12.5%.

Following consultations with USTR on Wednesday, Mexico’s Economy Ministry confirmed that goods meeting USMCA rules of origin — representing about 85% of Mexican exports — would be exempt from the proposed tariff. The measure also excludes goods covered by Section 232 orders on autos, steel, and aluminum.

“In consultations held today, it was clarified that Mexico’s trade that complies with USMCA rules of origin is exempt from the measure,” the ministry said in a statement.

For the remaining 15% of Mexican exports, the ministry said it would hold formal talks with USTR over the next 45 days, including a round led by Economy Minister Marcelo Ebrard, to present evidence of Mexico’s actions against forced labor.

The USTR investigation found that while Mexico has a legal prohibition on importing goods made with forced labor, enforcement has been ineffective. The agency cited a lack of transparency in handling a petition under Mexico’s 2023 decree on forced labor imports, and noted that Mexico has not taken action on goods subject to US Customs and Border Protection withhold release orders.

Mexico’s 2023 decree, published on February 17, 2023, prohibits the import of goods produced wholly or partly through forced labor, as defined by the International Labour Organization’s Forced Labour Convention.

The proposed tariffs are not immediately in effect; a 45-day public consultation period is underway. Mexico expressed confidence that the tariff proposal affecting 15% of its trade would be modified through bilateral discussions in the coming weeks.