US tariffs on forced‑labour goods spark fresh clash over extraterritorial law — UnionPress

Washington's new duties on imports from the EU and 58 other countries raise questions about sovereignty, trade fairness and the future of transatlantic regulation.

President Donald Trump announced on 24 July that the United States would levy tariffs on goods from 60 nations, including all European Union members, on the grounds that they contain forced‑labour. The move marks the latest escalation in a series of unilateral trade actions that could force Brussels to defend its regulatory autonomy.

The US Trade Representative's office justified the measures by claiming America is "the only country in the world to adopt, and effectively enforce, a ban on imports made with forced labour". While the EU already bans such imports under its own legislation, the American administration argues that European enforcement is insufficient and that its tariffs are a necessary corrective.

Under the new rules, American customs officials will assess additional duties on a range of products, from textiles and electronics to agricultural goods, if they deem the supply chain to involve forced labour. The US cites specific cases, such as Poland's reduced imports of American tobacco while the country has increased purchases from Malawi, a nation the US alleges uses forced labour in its tobacco sector.

Even if the cited examples are accurate, the share of US exports affected is marginal. In 2025, American tobacco sales to Poland are projected to represent a tiny fraction of total US‑Poland trade, and an even smaller slice of overall US export volumes. Critics argue that the forced‑labour rationale is a pretext for a broader strategy of extraterritorial regulation.

A spokesperson for the European Commission attempted to downplay the impact, noting that the tariffs are "in line with the US tariff commitments agreed under the EU‑US joint statement". Yet the language of the statement does not address the underlying sovereignty issue: the United States is effectively imposing its own standards on European markets.

European officials warn that the duties could set a precedent for Washington to intervene whenever it perceives a foreign rule as hostile to American interests. "If the United States can unilaterally decide which foreign regulations are acceptable, it undermines the very principle of equal footing in international trade," said a senior EU trade adviser, speaking on condition of anonymity.

Analysts see the forced‑labour cases as a "stalking horse" for a more expansive use of US extraterritorial law. The Trump administration has already signalled intent to target other EU policies, including the Digital Markets Act (DMA), the carbon border adjustment mechanism (CBAM), and various digital services taxes.

Two dozen US lawmakers recently urged the president to launch a Section 301 investigation of the DMA, accusing Brussels of "robbing" American tech firms. In a post on his Truth Social platform, Trump threatened an immediate 301 probe and hinted at further tariffs following the European Commission's €890 million fine on Google for alleged DMA breaches.

Similar rhetoric has been directed at the EU's CBAM, a climate‑related levy designed to level the playing field for European producers by charging imports from countries with weaker carbon pricing. Washington's critics argue that the US could use the same forced‑labour justification to challenge the mechanism, despite the EU's claim that it targets environmental, not labour, standards.

The current dispute echoes the Helms‑Burton Act controversy of the 1990s, when the US extended its embargo on Cuba to penalise foreign firms dealing with the island. After three presidents blocked enforcement, the Trump administration revived the lawsuits, and in May 2024 the US Supreme Court ruled that Cuban‑related claims against European companies could proceed.

That decision illustrates how US courts can become arenas for enforcing extraterritorial policy, a development that worries European businesses and governments alike. If American judges uphold the tariffs, it could open the door to further challenges against EU regulations that the US deems unfavourable.

Another flashpoint is the EU‑US Data Privacy Framework, which allows American firms to transfer large volumes of European consumer data to the United States under the promise of "independent supervision" by the Federal Trade Commission (FTC). The European Commission initially defended the arrangement, but a recent US Supreme Court ruling that the president can remove FTC commissioners has cast doubt on the framework's independence.

European privacy advocates have already filed lawsuits seeking to invalidate the deal. Should the courts side with them, American tech giants could lose a lucrative data pipeline, potentially reshaping the competitive landscape for digital services across the continent.

For European workers, the tariffs could translate into higher prices for everyday goods if importers pass on the additional costs. Small and medium‑sized enterprises that rely on transatlantic supply chains may face tighter margins, prompting calls for stronger EU support measures.

Trade unions across the EU have expressed concern that the US approach shifts the burden of compliance onto European businesses and consumers rather than addressing the alleged forced‑labour practices directly. "We need a coordinated European response that protects workers' rights without sacrificing market access," said a spokesperson for the European Trade Union Confederation.

Consumer groups warn that the tariffs could disproportionately affect low‑income households, which spend a larger share of their income on imported goods. "When tariffs rise, the most vulnerable pay the price," noted a senior analyst at a Brussels‑based consumer watchdog.

Brussels is weighing its options, from filing a complaint at the World Trade Organization to launching reciprocal duties on US products. Some EU officials argue that a measured retaliation could preserve the integrity of the single market while signalling that extraterritorial enforcement will not be tolerated.

Others advocate for a diplomatic route, seeking to negotiate a clearer set of rules governing forced‑labour verification that would be mutually recognised. Such an approach could avoid a full‑blown trade war but would require concessions from both sides on verification standards and enforcement mechanisms.

The tariffs are set to take effect later this year, giving European businesses a short window to adjust. In the meantime, the broader debate over the legitimacy of extraterritorial trade measures is likely to intensify, with implications for a range of sectors beyond the immediate forced‑labour claims.

Whether the United States will succeed in expanding its regulatory reach remains uncertain, but the episode underscores a growing tension between two of the world's largest economies. For European policymakers, the challenge will be to protect the bloc's regulatory autonomy while safeguarding the interests of workers, consumers and the broader economy.