The Office of the United States Trade Representative (USTR) has released its initial findings from its Section 301 investigation into the use of forced labour among 60 trading partners, including New Zealand.
Key Points for NZ Exporters:
• The proposed 12.5% tariff is not yet in force.
• Current advice is that the proposed 12.5% tariff would replace, rather than stack on top of, the existing 10% tariff.
• Exports including beef, kiwifruit, and avocados remain exempt from the proposed tariffs.
• New Zealand is one of 60 economies investigated, making this a broad US trade action rather than a measure targeted specifically at New Zealand.
What is the latest update?
As part of the investigation, USTR has proposed an additional 12.5% tariff on imports from New Zealand and a number of other economies that it alleges do not have sufficiently robust prohibitions on goods produced using forced labour. Economies that have implemented, or committed to implement, forced labour import bans would face a lower proposed tariff rate of 10%. Importantly, these tariffs are not yet in force. A consultation process will now take place before any final decision is made. No date has been set for when these tariffs will be introduced.
Exemptions
The current list of exempt products remains unchanged. For New Zealand exporters, this includes:
• Beef products
• Kiwifruit
• Avocados
In addition, products already subject to Section 232 tariffs (including certain steel, aluminium and other specified products) would continue to face those tariffs rather than the proposed Section 301 tariffs.
How have other markets faired?
Alongside New Zealand, 59 other countries were investigated. Together they contribute 90% of goods imports into the US. The USTR proposed 10% tariffs on 16 countries, including the EU, UK, Mexico, and Canada. Strangely, that list also includes economies such as Bangladesh, Guatemala, Pakistan, and Indonesia, among others. These are countries that have weaker employment laws than New Zealand. The USTR has proposed a 12.5% tariff for New Zealand and 43 other countries, including Australia, China, India, and several key US allies.
How has the NZ Government reacted?
Trade Minister Todd McClay described the proposal as disappointing and indicated that New Zealand would continue to push back strongly against the US findings.
He noted that New Zealand already has strong measures in place to combat forced labour and that officials had engaged extensively with USTR throughout the investigation process.
What happens next?
The proposal is now subject to a consultation process:
• Written submissions to USTR are due by 6 July 2026.
• Public hearings will be held on 7 July 2026.
• A final determination is expected before the current Section 122 tariffs expire on 24 July 2026.
ExportNZ understands that this 12.5% (Section 301) tariff would not stack on top of the current 10% (Section 122) tariff. Instead, it will replace them once the Section 122 tariff expires on 24 July. ExportNZ is working closely with officials at MFAT and other agencies as the process unfolds. New Zealand has already made representations to the United States during the investigation and MFAT expects further engagement ahead of any final decision. We will continue to monitor developments and provide updates as more information becomes available.
Please get in touch if you have any questions about how these proposed measures may affect your business.