Canada Fights Trump’s 10% Forced Labour Tariffs on July 9, 2026

The Trump administration is threatening 10% tariffs on Canadian goods under Section 301 of the Trade Act, claiming Canada has not done enough to enforce forced labour bans. Canada submitted a written response to the U.S. Trade Representative on July 8, arguing its new standalone forced labour legislation and existing supply chain measures eliminate any basis for the duties. The tariffs could hit 60 economies accounting for 99% of U.S. imports.

Why Trump is targeting Canada with forced labour tariffs

On March 12, 2026, the U.S. Trade Representative initiated investigations into 60 countries, including Canada, to determine whether they enforce bans on goods made with forced labour. USTR Jamieson Greer proposed 10% duties on Canada, Mexico, the United Kingdom, and some others, and 12.5% duties on dozens more with partial or no forced labour bans. The investigations examine whether foreign policies burden or restrict U.S. commerce under Section 301 of the Trade Act of 1974.

Canada’s legal defence against the tariffs

Canada told the Trump administration in a written submission that it already prohibits forced labour imports through the Customs Tariff since 2020 and requires annual supply chain reports from large entities since 2024. The government also tabled Bill C-35, a standalone forced labour import ban, to strengthen enforcement. Canada respectfully submitted there is no basis for additional Section 301 duties on Canadian goods, citing its existing prohibition and complementary transparency measures.

Democratic attorneys general call tariffs unlawful

A coalition of 22 Democratic state attorneys general, co-led by California’s Rob Bonta, filed objections on July 8 opposing the proposed tariffs. They argued the forced labour rationale is a pretext to revive sweeping tariffs the Supreme Court struck down in February after Trump’s first two tariff attempts failed. The AGs pointed to the speed of the investigation—completed in roughly 2.5 months instead of the typical year or more—and the sheer scope of targeting 60 economies as evidence the tariffs are unlawful.

China’s blocking laws add complexity

China responded to global forced labour restrictions with two new regulations in April 2026: the Provisions of the State Council on the Security of Industrial and Supply Chains and a countering regulation. These blocking laws complicate Canada’s efforts to reset trade relations with Beijing while defending against U.S. tariffs. Companies now face conflicting rules: U.S. and Canadian forced labour bans versus Chinese laws that restrict foreign supply chain audits.

Final Thoughts

Canada faces a tariff threat despite new legislation. With Democratic AGs challenging the tariffs as unlawful and the Supreme Court having already struck down two prior Trump tariff attempts, the outcome remains uncertain. The dispute tests whether forced labour enforcement or trade retaliation drives U.S. policy.

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