U.S. Proposes 12.5% Tariff on Chile in Forced-Labor Trade Push

Chile · Trade

The United States has proposed a 12.5% tariff on Chile and dozens of other economies it accuses of failing to keep goods made with forced labor out of global trade, a move Santiago is already working to reverse.

The Office of the US Trade Representative said an investigation had found that around 60 economies had not effectively imposed or enforced a ban on importing goods produced with forced labor, conduct it deemed “unreasonable” and a restriction on US commerce. The finding, issued under Section 301 of the 1974 Trade Act, proposes additional duties of 12.5% on most of the named economies, with a lower 10% rate for those judged to have made some commitments.

Who the 12.5% tariff on Chile and others targets

The investigation, opened in March, covers a broad list that includes Chile, Brazil, Argentina, Colombia and Peru, alongside large economies such as Japan, the United Kingdom, Australia, Switzerland, South Korea, South Africa and Vietnam. The trade office argues that lax enforcement lets firms using forced labor produce goods more cheaply, distorting markets and forcing US producers to compete on uneven terms at home and abroad. It also proposed a special mechanism for the textile sector that would let a set volume of clothing and textile imports from certain economies enter at a reduced tariff rate. For Chile, the proposed 12.5% would sit above the temporary 10% rate already in place after the US Supreme Court struck down a broader set of tariffs earlier this year.

How Chile’s government responded

Chilean officials moved quickly to play down the step. Finance Minister Jorge Quiroz called it “a recommendation, not a measure,” and Foreign Minister Francisco Pérez Mackenna stressed that it remained a non-binding proposal in a public-consultation phase, adding that Chile would keep negotiating and that its free-trade agreement with the United States remained in force. The government said it was taking part in the process to protect national interests. The United States is the leading destination for Chilean exports, so even a moderate tariff could weigh on competitiveness depending on the final exemptions.

What happens next on the trade proposal

The proposal is not final. Interested parties must request to appear by June 22, written comments are due July 6, and the trade office will hold a public hearing on July 7. Only after that process will Washington decide on any action, and the practical effect for each country will depend on exemptions set out in a final annex. The measure is one of several country and theme-based Section 301 actions the administration has pursued since the Supreme Court limited its earlier emergency-powers tariffs, signaling a more case-by-case approach to trade enforcement.