U.S. Proposes 12.5% Tariff On Chile In Forced-Labor Trade Push

2026-06-04 05:00:39

(MENAFN- The Rio Times) Chile · Trade

Key Facts

- The proposal: The US trade office proposes a 12.5% tariff on Chilean goods, part of an action covering around 60 economies.

- The reason: Washington says these countries fail to effectively block imports of goods made with forced labor.

- Two tiers: Economies with weaker safeguards face 12.5%, while those with some commitments would see 10%.

- Wide reach: The list also names Brazil, Argentina, Colombia, Peru and major partners such as Japan and the United Kingdom.

- The status: Chile calls it a non-binding recommendation in consultation; comments are due July 6 and a hearing is set for July 7.

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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.

Frequently Asked Questions

Is the 12.5% tariff on Chile in force?

No. Chile's government describes it as a non-binding recommendation in a public-consultation phase, with no final decision yet.

Why is the US proposing it?

The trade office found that around 60 economies fail to effectively block imports of goods made with forced labor, which it says harms US commerce.

Which other countries are named?

The list includes Brazil, Argentina, Colombia and Peru, plus major partners such as Japan, the United Kingdom, Australia and South Korea.

When could it take effect?

Comments are due July 6 and a hearing is set for July 7; any action would follow that process, with details set in a final annex.

Connected Coverage

The action runs in parallel with a separate proposed 25% tariff on Brazil over digital and trade rules, and adds to the regional headwinds seen in the OECD's latest growth downgrades.