Trump administration escalates forced labour tariff threat
U.S. accuses Canada of weak enforcement on imports, raising stakes as USMCA trade deal heads for renewal.
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Canada faces new tariff threats from the Trump administration over forced labour enforcement — adding pressure as the Canada-United States-Mexico Agreement heads into renewal talks.
Washington's office of the U.S. Trade Representative released a report this week claiming Canada has failed to effectively enforce bans on forced labour imports. The report pointed to minimal enforcement actions: Canadian border officials have intercepted 50 shipments on suspicion of forced labour since 2020, but only two were found to contain forced labour products — a 2024 textile shipment and one in 2025 containing frozen seafood.
The U.S. says the problem runs deeper. During the previous USMCA negotiation under the first Trump administration, Canada changed forced labour rules in 2020 but has shown little evidence of stepping up enforcement since. "Canada, essentially for four years, was not in compliance with this particular article," said Martha Goncalves, a customs and trade partner at PwC Canada.
Former Liberal MP John McKay dismissed the forced labour claims as a bargaining tactic. "It's just got nothing to do with forced labour and everything to do with Trump thinking that he can get an advantage in the negotiating position," McKay said. He noted the Trump administration lets U.S. private firms produce exports using prison labour and hasn't prioritized enforcement of a Biden-era law targeting Uyghur forced labour.
The stakes are clear: Canadian businesses and exporters could face new tariffs unless Ottawa improves enforcement before formal trade negotiations begin.