Editor's Note
This editor’s note highlights the key facts and market implications behind “Canada’s Forced Labour Import Ban Under Review”, with emphasis on sourcing, product fit, fabrication, logistics, or buyer impact.
Heightened attention on the issue of forced labour may impact companies that import goods into Canada and require enhanced supply chain due diligence to evidence that such imports were not produced using forced labour.
On March 12, the office of the United States Trade Representative (USTR) initiated investigations into 60 economies, including Canada, Mexico, China, and the European Union, under section 301(b) of the US Trade Act of 1974 to determine whether they have failed to or effectively enforce bans on imports produced with forced labour. As part of the investigation, the US will assess the adequacy of Canada's forced labour legislative and enforcement framework.
Section 301 Investigation
An investigation under section 301(b) examines whether the acts, policies, or practices of a foreign country are unreasonable or discriminatory and burden or restrict US commerce. If the USTR determines a foreign economy has engaged in unfair practices that burden or restrict US commerce, it may unilaterally restrict imports or suspend trade agreements. Section 301 grants the executive broad authority to place any percentage of tariffs against all or some foreign products, with the option to extend measures after four years.
US tariffs were lifted in February 2026 when the US Supreme Court declared invalid the use of global tariffs under the International Emergency Economic Powers Act, following which temporary tariffs under section 122 of the Trade Act of 1974 were imposed that are set to expire in July. This time-limited measure operates as a stopgap while the Trump administration explores other long-term tariffs under section 301.
Impacts on Canada
As is required upon initiating a section 301 investigation, the USTR has requested consultations with the governments under review. Trade Minister Dominic LeBlanc has acknowledged the investigation and Canada's willingness to collaborate with the US and has affirmed Canada's commitment to ensuring goods made with forced labour are not imported into Canada.
Prime Minister Mark Carney has similarly made assurances that Canada maintains a robust framework to prevent the importation of goods produced with forced or child labour, which includes the Fighting Against Forced Labour and Child Labour in Supply Chains Act and the office of the Canadian Ombudsperson for Responsible Enterprise.
However, despite this commitment, Canada's enforcement record has drawn criticism. To date, Canada has made limited use of its forced labour import prohibitions and enforcement has been infrequent. Since 2021, Canada Border Services Agency (CBSA) has only seized two shipments of goods made using forced labour: a shipment of textile products in 2024 and a shipment of frozen seafood in 2025.
As a result of this criticism, it is likely there will be an uptick in enforcement activity from CBSA in the coming months. There may also be amendments to existing legislation or policy documents to reflect more strict interpretations or additional measures to prevent the importation of goods produced with forced labour.
In its 2026 National Trade Estimate Report on Foreign Trade Barriers, the US government alleged that Canada failed to prevent foreign goods made with forced labour from entering the US market. This assessment is an early indication of how the USTR will likely evaluate Canada.
Although investigations typically take around 12 months to conclude, US trade officials have indicated these investigations are expected to conclude within five months, meaning the outcome is likely to coincide with the Canada-United States-Mexico Agreement's (CUSMA) renewal deadline of July 1, 2026.
Additionally, while the US administration has exempted CUSMA-compliant goods when imposing tariffs, there is no guarantee that similar exemptions would apply to tariffs under section 301.
Canadian businesses should closely monitor developments as the investigations progress, particularly with public hearings scheduled for April 28, 2026. Businesses may also participate directly in the process by submitting comments through the USTR's electronic comments portal by April 15, 2026.
Source: Read the original article | Published: April 23, 2026