Why is the US focusing on forced labour?
The International Labour Organization (ILO) defines forced labour as work carried out under threat of penalty and without voluntary consent.
According to the USTR, economies that fail to block such imports create unfair competition by allowing artificially cheap goods into global markets, burdening US businesses.
The 60 economies investigated account for 99.4 per cent of US imports.
“Although it is universally recognised that forced labour is a practice that should not be tolerated, the use of forced labour across the world continues to persist and has even increased in recent years,” the USTR said.
However, Ms Elms said that the US approach lacks clarity.
“All of the materials that I’ve read from the case that was released today don’t really clarify very much what the US is looking for and what it would mean to effectively enforce that,” she told CNA’s Asia First.
How were the tariff rates derived?
The US is proposing a 10 per cent tariff for a group of economies – including Canada, the EU, Britain, Indonesia, Malaysia, Taiwan and Mexico – that have some form of forced labour prohibition in law or in trade agreements with Washington.
All others, including Singapore, China and Japan, could face a higher rate of 12.5 per cent.
It is unclear how these figures were determined.
However, the 10 per cent rate mirrors the most favourable tariff level previously offered by the Trump administration to any trading partner, Ms Hurlburt noted.
She also pointed out that many goods are exempted – unlike earlier tariff rounds – including items such as beef, coffee and certain fruits and nuts.
This reflects concerns about inflation and avoiding disruptions to US industrial production, she added.
What effects could the tariffs have on Singapore?
Singapore has refuted the US’ claims, but a potential 12.5 per cent tariff could still have economic consequences.
The proposed tariff covers approximately one-third of Singapore’s domestic exports to the US due to various product exemptions, Singapore’s Ministry of Trade and Industry (MTI) said on Thursday.
The new levies “could erode its competitive advantage and lead to shifts in supply chains”, said Ms Elms.
She noted that Singapore is also facing a separate US probe into alleged structural excess capacity in manufacturing sectors, compounding the risk.
For businesses, the key question will be whether exports to the US remain viable.
“I think firms have to do that internal calculation themselves. What is that sort of magic number … beyond which you can no longer afford to absorb a tariff, and then that’s when you really need to get serious about diversification outside of the United States,” Ms Elms said.
MTI reiterated that Singapore does not condone the use of forced labour in supply chains, adding that forced labour is a transnational issue that requires international cooperation.
“MTI will continue to engage the USTR constructively to explore options on this matter, and is assessing the impact of the proposed actions on Singapore’s exports to the US,” it said.