Perc Pineda, PhD
Chief Economist, Plastics Industry Association
In March 2026, the USTR initiated an investigation of 60 U.S. trading partners under Section 301 of the Trade Act of 1974. The agency examined whether those countries had failed to enact or effectively enforce laws preventing the importation of goods produced with forced labor. On June 5, 2026, upon completion of the investigation, the USTR issued its determination that the practices of the investigated countries were actionable under Section 301 and announced proposed tariff actions.
The USTR proposes an additional 12.5% Section 301 tariff on countries that have not adopted effective prohibitions on imports of goods produced with forced labor.[1] Countries that have adopted or committed to adopt meaningful forced-labor import prohibitions would instead be subject to a lower, 10% additional tariff.[2] The USTR is requesting public comments by July 6, 2026, before making a final decision.
Broad support against forced labor in international trade
The principle that goods traded internationally should not be produced with forced labor enjoys broad support. This position aligns with member states’ obligations under International Labour Organization (ILO) Convention No. 29 (Forced Labour Convention, 1930), ILO Convention No. 105 (Abolition of Forced Labour Convention, 1957), and the ILO Declaration on Fundamental Principles and Rights at Work. These instruments affirm the global commitment to suppress and eliminate forced labor. Nearly every country has ratified Convention No. 29, and most have ratified Convention No. 105.[3]
Forced labor distorts labor markets by undermining the basic mechanisms through which wages, working conditions, and labor allocation are determined. From an economic perspective, it is not only a human rights issue but also a significant source of market failure and competitive distortion. Goods produced with forced labor introduce pricing distortions into the global trading system by allowing products to enter supply chains at artificially low costs that do not reflect competitive or voluntary market outcomes.
Exemptions from the proposal
The proposal also provides targeted exemptions for specific products across ten HTSUS chapters. In Chapter 39 (Plastics and Articles Thereof), the following 18 plastic resins and 12 plastic products are excluded:
| Chapter 39 (Plastics and Article Thereof) Exemptions | ||
| HTSUS | Description | Scope Limitations |
| 39019090 | Polymers of ethylene, nesoi, in primary forms, other than elastomeric | |
| 39029000 | Polymers of propylene or of other olefins, nesoi, in primary forms | |
| 39046100 | Polytetrafluoroethylene (PTFE), in primary forms | |
| 39059110 | Copolymers of vinyl esters or other vinyls, in primary forms, containing by weight 50% or more of derivatives of vinyl acetate | |
| 39059980 | Polymers of vinyl esters or other vinyl polymers, in primary forms, nesoi | |
| 39069050 | Acrylic polymers (except plastics or elastomers), in primary forms, nesoi | |
| 39071000 | Polyacetals in primary forms | |
| 39072100 | Bis(polyoxyethylene) methylphosphonate | |
| 39077000 | Poly(lactic acid) | |
| 39081000 | Polyamide-6, -11, -12, -6,6, -6,9, -6,10 or -6,12 in primary form | |
| 39119025 | Thermoplastic polysulfides, polysulfones and other products specified in note 3 to chapter 39 of the HTSUS, containing aromatic monomer units or derived therefrom | |
| 39119091 | Polysulfides, polysulfones and other products specified in note 3 to chapter 39 of the HTSUS, nesoi | |
| 39123100 | Carboxymethylcellulose and its salts | |
| 39123900 | Cellulose ethers, other than carboxymethylcellulose and its salts, in primary forms | |
| 39129000 | Cellulose and its chemical derivatives nesoi, in primary forms | |
| 39139020 | Polysaccharides and their derivatives, nesoi, in primary forms | |
| 39139050 | Natural polymers and modified natural polymers, nesoi, in primary forms | |
| 39140060 | Ion-exchangers based on polymers of headings 3901 to 3913, in primary forms, nesoi | |
| 39172100 | Tubes, pipes and hoses, rigid, of polymers of ethylene | Aircraft |
| 39172200 | Tubes, pipes and hoses, rigid, of polymers of propylene | Aircraft |
| 39172300 | Tubes, pipes and hoses, rigid, of polymers of vinyl chloride | Aircraft |
| 39172900 | Tubes, pipes and hoses, rigid, of other plastics nesoi | Aircraft |
| 39173100 | Flexible plastic tubes, pipes and hoses, having a minimum burst pressure of 27.6 MPa | Aircraft |
| 39173300 | Flexible plastic tubes, pipes and hoses, nesoi, with fittings, not reinforced or otherwise combined with other materials | Aircraft |
| 39173900 | Flexible plastic tubes, pipes and hoses, nesoi | Aircraft |
| 39174000 | Fittings of plastics, for plastic tubes, pipes and hoses, nesoi | Aircraft |
| 39269045 | Gaskets, washers and other seals, of plastics | Aircraft |
| 39269094 | Cards, not punched, suitable for use as, or in making, jacquard cards; Jacquard cards and jacquard heads for power-driven weaving machines, and parts thereof; and transparent sheeting of plastics containing 30 percent or more by weight of lead | Aircraft |
| 39269096 | Casing for bicycle derailleur cable; and casing for cable or inner wire for caliper and cantilever bake, whether or not cut length; of plastic | Aircraft |
| 39269099 | Other articles of plastic, nesoi | Aircraft |
In addition to the Chapter 39 exemptions, the proposal broadly exempts goods already subject to Section 232 tariffs, as well as critical raw materials, products that could cause significant economic disruptions, and items not sufficiently available from the U.S. or other sources. It also excludes informational materials (e.g., books), donations, accompanied baggage, USMCA-compliant goods from Canada and Mexico, and certain CAFTA-DR textile and apparel products.
Beyond the Chapter 39 exemptions, however, the plastics industry’s comments will be critical in identifying which capital equipment, intermediate inputs, and consumer goods across the plastics value chain should be exempted from the proposed tariffs or, alternatively, should remain subject to or face increased duties. This will help ensure that the final tariff structure minimizes unintended supply chain disruptions while supporting the proposal’s policy objectives.
On the exemption for goods already subject to Section 232 tariffs, HTSUS subheadings 3925.20.00 (Doors, windows, and their frames and thresholds for doors, of plastics) and 3926.90.10 (Buckets and pails) are no longer subject to Section 232 tariffs and therefore would be covered under this proposal. In addition, plastics machinery and parts that remain subject to the reduced 15% Section 232 tariff through December 27, 2027, would not be subject to the proposed forced-labor Section 301 tariff.[4] Based on USTR’s timeline, a public hearing is scheduled for July 7, 2026, after which USTR will decide whether to finalize, modify, or withdraw the proposed action.
What’s at stake for the U.S. plastics industry?
Using 2024 as the baseline year—before the 2025 tariffs took effect and the subsequent tariff revisions in 2026—U.S. plastics industry imports from the countries covered by the USTR investigation totaled $52.8 billion, excluding USMCA-qualified imports, and machinery and equipment already covered by Section 232 tariffs. Based on the resin and plastics product exemptions shown in the table above, approximately 28.9% of the value of imports from the covered countries would be exempt. This means that roughly 71.1% of U.S. plastics industry imports from the covered countries could potentially become subject to the proposed forced-labor Section 301 tariffs of 10% or 12.5%, depending on the exporting country’s classification. While the proposed exclusions are intended to limit unintended economic consequences and preserve the proposal’s focus on addressing forced-labor-related trade practices, they still leave a substantial share of plastics imports potentially subject to additional duties.
[1] The following 54 economies have failed to impose and effectively enforce a prohibition on the importation of goods produced with forced labor: Algeria; Angola; Argentina; Australia; the Bahamas; Bahrain; Bangladesh; Brazil; Cambodia; Chile; China, People’s Republic of; Colombia; Costa Rica; Dominican Republic; Egypt; El Salvador; Guatemala; Guyana; Honduras; Hong Kong, China; India; Iraq; Israel; Japan; Jordan; Kazakhstan; Kuwait; Libya; Malaysia; Morocco; New Zealand; Nicaragua; Nigeria; Norway; Oman; Peru; the Philippines; Qatar; Russia; Saudi Arabia; Singapore; South Africa; South Korea; Sri Lanka; Switzerland; Taiwan; Thailand; Trinidad and Tobago; Türkiye; United Arab Emirates; United Kingdom; Uruguay; Venezuela; and Vietnam.
[2] The following six economies have failed to effectively enforce a prohibition on the importation of goods produced with forced labor: Canada; Ecuador; the European Union; Indonesia; Mexico; and Pakistan.
[3] The ILO defines forced labor as work or service exacted under the menace of penalty from a person who has not offered himself or herself voluntarily. The definition covers coercive practices such as physical violence, threats, debt bondage, withholding of wages, confiscation of identity documents, and restrictions on freedom of movement.
[4] HTSUS 84771030, 84771090, 8477908601, 8480718045, 8480718060, 8480799010
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