Why NZ faces 12.5% tariffs over US forced labour claims

Saturday, 25 July 2026

The US is imposing a 12.5% tariff on New Zealand as part of a crackdown on 60 countries for failing to ban the import of goods made with forced labour.

The new duties will apply to approximately 70% of New Zealand’s exports to the United States, though key goods like beef and kiwifruit are excluded.

Prime Minister Christopher Luxon and Trade Minister Todd McClay strongly rejected the findings, calling the US investigation 'not credible' and lacking meaningful evidence.

But it is true that New Zealand doesn’t ban goods made with forced labour.

US President Donald Trump has confirmed plans to impose double digit tariffs on 60 countries - including New Zealand - after an investigation into goods allegedly made with forced labour.

The new duties will apply to approximately 70% of New Zealand’s exports to the US - with key goods like beef and kiwifruit excluded.

The move comes after the expiry of time-limited, 150-day tariffs imposed in February.

Under the new iteration, 19 countries - including Canada, Mexico, India and the UK - will face 10% levies while another 41 - including NZ - will be hit with 12.5% import taxes.

These will be imposed under the United States Trade Act, on the basis that the 60 countries have failed to “effectively enforce a prohibition on the importation of goods produced with forced labour”, which burdens or restricts US commerce.

In other words, they’re saying that trading with countries that buy goods made with forced labour is unfair to the US. “This creates a dynamic where American workers are forced to compete globally on an unlevel playing field,” US Trade Representative Jamieson Greer said last month.

This raises the question - how did New Zealand end up on this list? Do we really allow the import of goods that have been made using forced labour?

New Zealand does not have a rule prohibiting imports of goods made with forced labour

Forced labour, according to the International Labour Organisation (ILO), means “all work or service which is exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily”.

It is different to slavery - although the two often overlap. Slavery is defined as “an institution of complete ownership, in which an individual is subjected to the full control of the slave owner who can make decisions for this individual”. These decisions can relate to the enslaved person’s education, work or even relationships.

The ILO estimates that 49.6 million people are subject to modern slavery worldwide, with 27.6 million people in forced labour.

Here in New Zealand, it is a crime to deal in slavery, to traffic people for the purposes of exploitation (including forced labour) and to engage anyone under the age of 18 in forced labour.

We are also a party to various international agreements, including the ILO Convention concerning Forced or Compulsory Labour (1930) and the ILO Convention concerning the Abolition of Forced Labour (1957).

But according to Brent Burmester, a senior lecturer at Auckland University’s Centre for Research on Modern Slavery, New Zealand does not have legislation that prohibits the import of goods made with forced labour.

“The US imposition of tariffs is spuriously justified on the strength of a lack of safeguards against importation of goods produced with forced labour,” he said.

“No government agency is charged with the duty to review the provenance of imports with a view to forbidding their import if they are from a country, region, industry, or specific supplier officially registered as high risk.”

New Zealand does ban goods made with prison labour, he noted, but that’s a practice carried out within the US.

Does this make the tariffs fair?

Whether or not Trump’s tariffs are legitimate is an entirely different question.

Both Prime Minister Christopher Luxon and Trade Minister Todd McClay were swift to condemn the news on Friday.

“The US investigation did not provide meaningful evidence to support claims in relation to forced labour. Tariffs are not the way - they drive up costs and uncertainty for businesses,” Luxon said.

“New Zealand rejects the findings of this investigation. The US process was not rigorous. It’s just not credible that imports created with forced labour play any measurable role in New Zealand’s economy,” McClay said.

Asked by Stuff what evidence we provided to show New Zealand does not import goods produced with forced labour, McClay said he “engaged, provided lots of information and discussed it with them.

“I’ve raised this with my counterpart in the US on a number of occasions, but ultimately if you look at, you know, what they’ve done… you’ve got to realise this is in a week when the president of America put a 50% tariff on Canada for a range of reasons, including that they weren’t fighting their wildfires fast enough so smoke was blowing over the border.”

Burmester agreed that the tariffs are not rational.

“We should not suppose this is a sincere intervention to protect vulnerable workers. These dumb tariffs are largely performative,” he said.

“They cause a distraction from a stupid war, play to Trump’s base, and poke at China, which is a hot spot for forced labour and a challenge to US power. I expect the plan is to divert some trade between tariff-hit countries with China. They won’t work and they won’t last, because the ultimate victims are US consumers.”

Burmester and McClay were also in agreement that a Modern Slavery Bill - currently at the select committee stage of the parliamentary process - would be unlikely to have changed the situation for New Zealand if it was in force.

That bill was introduced as a joint members’ bill by Labour MP Camilla Belich and National MP Greg Fleming earlier this year.

National supports it, but it is not Government policy because the minister for workplace relations and ACT deputy leader - Brooke van Velden - did not.

If enacted, the bill would require companies with an annual revenue of more than $100,000 to publicly report how they identify, address, mitigate, and remediate incidents of modern slavery within their operations and supply chains.

Those that didn’t comply could be subject to prosecution.

But other countries already have laws like this - and have still had tariffs slapped on.

Both Australia and the United Kingdom have laws requiring reporting and transparency in place already. And the European Union goes even further - with a complete ban on the sale of products made with forced labour coming into effect from December next year.

All three are subject to Trump’s tariffs.

The US banned the importation of goods made with forced or prison labour in 1930.