This piece was originally published in The Business of Fashion on April 30, 2026.
By Shayeza Walid
This week, the Trump administration took a big step towards imposing new tariffs on fashion imports.
A public hearing for trade investigations into 60 economies, including a number of fashion supply hubs and key allies —from Vietnam, India and Bangladesh to the EU, UK and Canada — took place over two days in Washington, DC.
The probe, led by the Office of the United States Trade Representative, a federal agency responsible for negotiating international trade agreements, is examining whether countries that fail to prohibit goods made with forced labour are gaining an unfair trade advantage —justifying new tariffs.
The Trump administration hasn’t shown much interest in labour rights to date. But these investigations come after the Supreme Court struck down the tariffs the administration had imposed under the International Emergency Economic Powers Act. With a temporary 10 percent tariff regime set to expire in July, the current probe, launched in March, offers an alternative legal pathway to reintroduce trade penalties under Section 301 of the Trade Act of 1974.
For fashion companies, the implications are immediate, and potentially disruptive.
Whatever the administration’s motivations, the result of the investigations could impose America’s strict — on paper at least — anti-forced labour rules across global supply chains as soon as this summer. That would put pressure on companies to prove where products come from and how they were made — beyond the factory audits used to satisfy regulators across much of the world today.
“This is really about traceability all the way down to raw materials,” said Jennifer McCadney, customs law specialist and partner at law firm Kelley Drye & Warren LLP. “Not just factories, which are stationary spaces where one can go to do investigations, but the cotton in the fibre that makes the clothes.”
US laws prohibiting the import of goods made with forced labour are not new and date back to Section 307 of the Tariff Act of 1930. Most recently, the Uyghur Forced Labor Prevention Act, which was introduced in 2022 and focuses on goods linked to China’s Xinjiang region, has blocked nearly $1 billion worth of Chinese imports into the US.
However, with the current investigations, the Trump administration is effectively pushing US forced labour standards beyond US borders — pressuring trading partners to adopt similar import bans or risk tariffs. Labour advocates have long supported this broader global alignment, arguing that without it, goods blocked in one market can simply be rerouted to another.
Now, policymakers are turning forced labour into a new argument for tariffs.
Sheela Ahluwalia, director of policy and advocacy at investigative organisation Transparentem said companies should already be mapping their full supply chains, identifying high-risk countries, commodities and workforces, including migrant labour, which is particularly vulnerable to exploitation.
“It’s past time,” she said, also noting that relying too heavily on traditional compliance tools might not get companies cleared. “Social audits don’t always find problems and can even conceal problems,” she said, pointing instead to the need for stronger engagement with worker groups and unions for the transparency needed to not face prohibition.
What This Means for Fashion
For fashion companies, the impact of the investigations comes down to two separate but overlapping risks: tariffs at the country level and bans at the product level.
If the US determines that a country is not doing enough to prevent forced-labour imports, it can impose tariffs on goods from that market, raising sourcing costs. At the same time, existing US forced-labour laws still apply to individual shipments.
“The gist from the current administration’s perspective is not that these countries themselves have forced labour,” said McCadney. “It’s that they don’t have import prohibitions in the same way the US does and that’s having a discriminatory impact on American businesses.”
Given this, companies must be able to prove their goods are not made with forced labour, or risk having them detained or blocked at the border through what is known as a Withhold Release Order. That means even if a brand pays a tariff, its products could still be denied entry if it cannot demonstrate a clean supply chain.
“There’s a confluence of tools here,” McCadney said. “A ban, which doesn’t allow a collection of tariffs, but stops goods from a foreign country from entering the US, and then a tariff if you fail to enact prohibitions.”
At the hearings, which took place over Tuesday and Wednesday, a total of 60 stakeholders including countries under investigation as well as industry associations, manufacturers and labour rights organisations, testified.
Foreign bodies notably challenged the investigations and tariff proposal given local anti-forced-labour laws that align with those of the US, even if they are not exactly the same, and also argued goods produced in their regions do not dampen competitiveness of US counterparts. Meanwhile multiple legal, labour rights and civil society organisations questioned the Trump administration’s plan for ensuring predictable customs enforcement and training across countries that do adopt the US law.
For now, Malaysia, for example, has signed a bilateral agreement and said it will recognise US prohibitions in accordance with local forced-labour laws, while Taiwan and Guatemala have agreed to adopt the US law directly.
The final outcome of the hearings will only become clear in the coming weeks, including tariff rates for specific countries, what products will be included in a potential ban, any standard for countries that do adopt the US law and crucially when the tariffs will come into effect.
However, as per McCadney, one thing is clear. “Tariffs are certain,” and soon, as the administration moves ahead at an accelerated pace. So, brands need to be prepared, regardless of the steepness of the levy, “to get their traceability together.”
The need for this level of supply-chain clarity also challenges a strategy many brands have relied on in recent years, moving production out of a banned region, such as China for Xinjiang cotton, for example, into alternative sourcing markets across Asia.
“A lot of companies have moved to satellite countries to get out of China as a result of the UFLPA,” McCadney said. “But with this probe if the countries you import from don’t move quickly enough to respond to these investigations, your costs might rise and access might be impacted.”
In simple terms, tariffs raise the cost of getting goods into the US, but traceability across the supply chain determines whether they get in at all.
That is a significant challenge for an industry built on complex, multi-tiered supply chains. A single garment may involve cotton grown in one country, spun into yarn in another, woven elsewhere and assembled in a fourth. Many brands still have limited visibility beyond their immediate suppliers.
“The only way out of this is the extent to which you know your supply chain,” said McCadney, “cascading down to all layers of the supply chain and having the documentation that shows origins of all your components.”
Both Ahluwalia and McCadney also underscored a systems issue facing brands, depending on what the investigations conclude. If different countries adopt forced-labour rules unevenly, which is likely, companies will be faced with shifting compliance requirements, inconsistent customs decisions and delays across markets.
While the US has spent years building out its own approach through agencies like US Customs and Border Protection, albeit still lacking clarity and standardisation in some regards, many countries targeted in the investigation lack the technical capacity or institutional infrastructure to implement similar regimes. Recent cuts to US foreign assistance and labour-rights funding could make that gap even harder to close, Ahluwalia said.
Essentially, this time around tariffs would increase sourcing costs, but also mean more documentation and greater risk that shipments are flagged or blocked, even when companies believe they are compliant. And if multiple markets adopt similar rules, companies may no longer be able to reroute goods that fail compliance checks.
“What ends up being created is a stricter ecosystem,” McCadney said. “If multiple countries adopt these laws, brands and retailers are pressured to have better traceability across the board.”
Of course, there are also reputational stakes. Forced-labour allegations can trigger consumer backlash, investor scrutiny and legal action towards brands, particularly as public awareness of supply-chain issues grows.
Concurrently, the regulatory landscape is tightening beyond the US. The European Union is preparing its own forced-labour regime, alongside incoming mandatory due diligence reporting and finalising requirements for Digital Product Passports, which will require detailed value-chain traceability and restrict products linked to forced labour from entering or circulating within its market.
To brands and retailers, the bottom line is: “It’s no longer enough to go after those who source your materials,” McCadney said. “Everyone has to be on the same page. Brands need to understand how risk is distributed across their supply chains.”