Canada has filed a written submission with the U.S. Trade Representative arguing there is "no basis" for additional tariffs on Canadian goods over enforcement of forced-labour bans. The submission responds to an investigation launched in March 2025 by USTR chief Jamieson Greer into 60 countries, including Canada, over how they police forced-labour goods in supply chains.

Section 301 of the 1974 U.S. Trade Act gives the USTR broad authority to investigate and retaliate against foreign trade practices deemed unfair to American commerce. It has become the Trump administration's primary legal tool for country-specific tariff action since the Supreme Court limited the use of emergency economic powers earlier this year.

The USTR has proposed a two-tier tariff structure. Canada, Mexico, the United Kingdom and several others would face a 10 per cent duty for allegedly insufficient forced-labour enforcement. Dozens of additional countries with partial or no forced-labour bans face 12.5 per cent. Reuters reported the broader proposal on June 3, 2026. Switzerland has separately rejected the investigation's findings outright.

Canada's defence rests on distinguishing its existing legal framework from the enforcement gaps the USTR alleges elsewhere. Canada has required annual supply-chain reporting for several years. A 2020 tariff amendment already made it illegal to import goods produced through forced labour, as Global Affairs Canada told a parliamentary committee in October 2024. The department's contracting code was updated in May 2023 to add explicit language on human trafficking, forced labour and child labour.

The strongest element of Canada's case is Bill C-35, tabled last month. The legislation would create a public list of products tied to forced labour in specific regions, shift the burden onto importers to prove goods from listed regions were not produced through slavery, and require enhanced supply-chain tracing information for high-risk imports at the border. Global Affairs published its news release on the bill on June 12, 2026. Public Safety Canada, which administers the existing supply-chain reporting law, notes that many internationally operating entities already fall under those requirements.

Industry has filed its own arguments. The Canadian Chamber of Commerce asked the USTR to assess Canada separately from the 60-country group, to suspend the proposed 10 per cent duty while C-35's reforms take effect, and to prioritize bilateral enforcement cooperation over blanket country-level tariffs. More than 1,500 written submissions from governments and industry groups were filed ahead of the hearing — a volume suggesting many trading partners dispute not only the investigation's conclusions about their own compliance, but the methodology itself.

The dispute coincides with Prime Minister Mark Carney's attendance at a NATO summit, meaning the file is being managed by officials and industry rather than through direct leader-to-leader engagement. That timing matters procedurally more than symbolically: Section 301 processes move on their own administrative schedule, built around comment periods and hearings rather than summit diplomacy, and Ottawa's rebuttal was always going to be filed by trade officials.

What distinguishes Canada's position is the argument that its forced-labour regime already predates the U.S. investigation by years, with C-35 layered on top rather than introduced in response to American pressure. Whether the USTR treats that distinction as sufficient grounds for exemption, or places Canada in the general 10 per cent tier regardless, will depend on findings from the Washington hearing and any subsequent determination, neither of which had been released as of this writing. Reuters reported in April that the investigation could produce new tariff actions against U.S. allies including Australia and Canada — a framing that has held through the process to date.