Trump to impose 10 percent additional tax on countries including Canada

 

 

The Trump administration has recommended imposing a 10 percent additional tax on major trading partners such as Canada, Mexico, the UK and Taiwan. The action is being taken because they have failed to prevent forced labor exploitation in the supply chain of products. This proposal is contained in a new report released by the United States Trade Representative (USTR).

The United States has found that these countries are unable to ensure that forced labor methods are not used in products imported into the US. In addition, the US is also aiming to impose a 12.5 percent tax on dozens of other countries that have not fully or partially implemented anti-labor exploitation laws. However, products that are completely legally produced under the Canada-US-Mexico trade agreement are exempt from this new tax.

The US Supreme Court struck down the Trump administration's previous tax policies earlier this year. The Trump administration has launched this action under Section 301 of the Trade Act of 1974 to circumvent this and give stronger legitimacy to its global tax agenda. US Trade Representative Jamieson Greer has stated that the failure of Canada and other partners to prevent such products from entering their markets is a global setback for American workers.

Meanwhile, Canadian Prime Minister Mark Carney has announced that Canada already has strong mechanisms in place to combat forced labor in its supply chain and will soon introduce new, stricter legislation in Parliament to address the concerns raised. A public consultation and review of the new tax proposals will take place in the US in July, ahead of the implementation of the new tax proposals.