NZ could face 12.5% tariff in US crackdown on forced labour imports

Donald Trump's administration is cracking down on countries it says are not doing enough to prevent the importation of goods made by force labour. Photo / Getty Images

Listen to this article — NZ could face 12.5% tariff in US crackdown on forced labour imports

By Soumya Bhamidipati of RNZ

New Zealand could soon face a new 12.5% tariff from the United States, as the Trump administration cracks down on 60 countries it says aren’t doing enough to prevent the importation of goods made by forced labour.

The United States Trade Representative (USTR) says 54 economies – including New Zealand – “have failed to impose and effectively enforce a prohibition” on goods produced with forced labour, which it says “is unreasonable and burdens or restricts US commerce”.

It’s proposing an additional 12.5% duty on this group of countries, which also includes Australia, the United Kingdom, India, Russia, China and Singapore.

Washington said a further six countries that have prohibitions on such imports are failing to “effectively enforce” them, and could be subject to an extra 10% tariff.

It said failing to restrict goods made by forced labour “undermines the universal aim of eliminating forced labour” and companies that imported such goods were unfairly advantaged by lower costs.

It also argued countries that didn’t crack down on the practice restricted US commerce “by displacing foreign goods produced without forced labour or forced labour inputs into the United States and other markets”.

Hearings about the proposed tariffs would be held on July 7, 2026 (US), USTR said. It did not specify what kind of goods might be being imported from New Zealand or other countries that have been made using forced labour.

Speaking to Morning Report, Trade Minister Todd McClay said he wasn’t surprised by the announcement.

But it was harmful to trade and could put costs up for US consumers.

McClay said this tariff would replace the 10% tariff already in place – and what did surprise him was that President Donald Trump hadn’t made it 15%.

McClay told Morning Report New Zealand was one of about 60 countries named and there was some suggestion “we are somehow part of forced labour”.

“I reject that very strongly.”

He said overall, exporters would find the tariff difficult to factor in the uncertainty around it and the “changing nature of what the tariff regime or policy might be in the future”.

But this year, McClay said New Zealand had sold about 4% more by value to the US than last year when there was no tariff.

That meant US consumers still wanted what New Zealand produced and “are happy to pay more for it”.

RNZ has approached the Ministry of Foreign Affairs and Trade for comment.

More tariffs possible

Currently, most New Zealand exports to the US face a blanket global tariff rate of 10%, which was imposed after an earlier 15% tariff on New Zealand exports was deemed illegal by the US Supreme Court.

Last month McClay said he was expecting the US Government to announce a trade investigation into New Zealand and Australian lamb imports.

US trade officials were thought to be launching investigations into so-called unfair trade practices, as a way to reintroduce tariffs deemed illegal by the Supreme Court.

“We know they are doing investigations at the moment, so-called investigations, they are looking for other ways to put that tariff wall back up,” McClay said.

McClay said an investigation into lamb was likely and it was possible that if the President needed to shore up votes in some states, he could hit New Zealand and Australia with tariffs.

He said his officials were talking to their US counterparts and reminding them that New Zealand was providing good product, was not flooding the market and was helping US farmers grow the market for lamb.