Trump Tariffs 2.0 Kick Off Today: US Slaps 10% Tariff on India Under Section 301 Forced Labor Action

The United States rolled out fresh trade tariffs ranging from 10% to 12.5% across 60 economies on Friday, with India successfully dodging a higher duty bracket to secure a lower 10% rate following policy changes on forced labor practices.

Under the direct authorization of US President Donald Trump, US Trade Representative (USTR) Jamieson Greer announced the final determinations under Section 301 of the Trade Act of 1974. The action targets global supply chains over the failure to enforce strict prohibitions on goods produced using forced labor.

The new measure replaces a temporary 10% baseline import tax that expired this week, following a multi-month investigation that evaluated trade and labor regulations across major economic partners.

According to the USTR directive, 17 nations, including India, Canada, the United Kingdom, Mexico, Bangladesh, and Pakistan, have been placed in the lower 10% tariff category. Meanwhile, 43 other economies that lack statutory import bans on forced labor face a higher 12.5% duty rate.

India Cuts Tariff Bracket from Proposed 12.5% to 10%

Initial proposals published by Washington in June had bracketed India among economies slated for a 12.5% tariff rate. However, New Delhi engaged in bilateral discussions and updated its Foreign Trade Policy on June 14 to explicitly prohibit the importation of goods made through forced labor.

Taking note of the regulatory amendment, the USTR recalibrated India’s standing, placing the country in the 10% category. Trade analysts noted that while the 2.5 percentage point reduction is modest, it preserves a relative competitive edge for Indian exports against regional competitors subject to higher duties or additional trade probes.

Critical Raw Materials and Supply Chains Exempted

To prevent disruptions to US domestic manufacturing, the USTR confirmed that the Section 301 duties will not apply to specific categories. Exemptions cover essential raw materials facing domestic supply shortages, items that would trigger broad macroeconomic shockwaves, and products that cannot be cultivated or produced in sufficient quantities within the United States.

The United States remains India’s largest single export destination, with bilateral trade in goods standing near $141 billion. Official negotiators from both sides are continuing discussions on a comprehensive bilateral trade framework to further stabilize long-term commerce tariffs.

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