Canada has told the U.S. government it should not face new tariffs for how it handles forced-labour in trade. Ottawa filed written arguments ahead of a hearing in Washington this week, responding to an American investigation into 60 countries — Canada among them — that began in March 2025.

The U.S. Trade Representative is using a law from 1974 called Section 301 that lets the U.S. investigate countries and impose tariffs if it thinks they are unfair trading partners. Most of the Trump administration's recent country-by-country tariffs have used this legal tool.

The U.S. is proposing two levels of punishment. Canada, Mexico and the United Kingdom would face a 10 per cent tariff. Dozens of other countries would face 12.5 per cent. The U.S. says these countries are not doing enough to stop imports made with forced labour.

Canada's argument is straightforward: we already have strong laws in place. A law from 2020 made it illegal to import anything made through forced labour. Canada also requires companies to report on their supply chains every year. The government also updated its rules in 2023 to specifically block human trafficking and child labour.

Canada is also pointing to a new law it introduced last month called Bill C-35. The law would create a list of products made with forced labour, make companies prove that goods they import from high-risk regions were not made through slavery, and require more detailed information when goods arrive at the border.

Business groups are also fighting back. The Canadian Chamber of Commerce asked the U.S. to treat Canada differently from the other 59 countries being investigated, to pause the proposed tariffs while Canada's new law takes effect, and to work with Canada on enforcement instead of simply imposing tariffs.

Over 1,500 governments and business groups filed arguments at the U.S. hearing. This large number shows that many countries think the U.S. investigation itself — how it works and what it measures — is unfair, not just the results.

Right now, Prime Minister Mark Carney is at a NATO summit, so trade officials are handling this file. This does not change much: these U.S. trade investigations follow their own timeline and rules, not the schedule of international meetings.

The key question is whether the U.S. will see Canada's existing laws as enough to avoid tariffs, or whether it will treat Canada the same as other countries and impose the 10 per cent duty anyway. The U.S. has not released its decision yet.