The U.S. Trade Representative (USTR) has noted that South Korea lacks regulations restricting imports of goods produced with forced labor, raising concerns about potential future tariff pressures.
This observation is particularly significant because it directly relates to the ongoing Section 301 investigation by the U.S., which could escalate into a broader trade risk.
USTR Includes South Korea Among Many Countries Cited in NTE Amid Section 301 Forced Labor Investigation.
The USTR released its National Trade Estimate (NTE) report on Tuesday. According to trade authorities, the report noted that South Korea’s lack of laws prohibiting forced-labor-produced goods allows such products to enter and compete in the Korean market.
The report further suggested that this regulatory gap may artificially lower labor costs, potentially giving unfair advantages to South Korean products and certain goods and services within the country.
The NTE is an annual report published by the USTR since 1985. It’s compiled using information from U.S. businesses, associations, and overseas diplomatic missions about export and foreign investment challenges.
This year’s mention of forced labor is a new addition to the South Korea section and was not present in last year’s report. However, some experts view this as a standard criterion applied to major trading partners during the NTE drafting process, rather than a targeted criticism of South Korea alone.
The NTE’s Canadian section notes that, despite laws prohibiting imports produced by forced labor, enforcement remains largely nominal, allowing such products to enter the market.
Trade experts are focusing on the widespread inclusion of forced-labor-related descriptions in NTE entries across multiple countries. This is seen as potentially linked to the U.S. government’s response to a court ruling against imposing reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA), leading to the concurrent use of Section 301 investigations to restore tariff measures.
South Korea’s Absence of Forced-Labor Import Regulations: A Potential Tariff Pretext?
Section 301 of the 1974 Trade Act allows the U.S. to investigate foreign government policies or practices deemed unreasonable or discriminatory, and to take countermeasures, including imposing tariffs.
A key feature of Section 301 investigations is that they can lead to broad trade actions, including tariffs on products beyond those specifically investigated. For instance, after a digital sector investigation, the U.S. could impose tariffs on all products from a country to pressure it to amend its practices and regulations.
Thus, the concerns raised in this year’s NTE regarding forced labor could potentially translate into future tariffs.
Given that the U.S. has highlighted South Korea’s lack of forced-labor regulations, the risk of a Section 301 tariff imposition could be significantly higher.
On March 12, the USTR initiated a Section 301 investigation into forced labor, stating it would assess whether foreign governments have taken sufficient measures to prohibit the import of forced labor-produced goods and the resulting impact on the U.S.
Currently, the most actively enforced U.S. trade regulation related to forced labor is the Uyghur Forced Labor Prevention Act (UFLPA), which has been in effect since 2022. It prohibits the entry of products from the Xinjiang region and third-country products containing raw materials or components from that area.
U.S. Customs and Border Protection (CBP) reports that approximately $5,600 were subject to UFLPA scrutiny from 2022 to 2025. This ranks South Korea 10th globally and 9th among the 60 countries under Section 301 investigation. In 2025 alone, about $8.41 million worth of goods will be investigated, with most scrutiny occurring recently.
A Ministry of Trade, Industry, and Energy representative stated they would maintain close communication with the U.S. regarding the NTE issues to protect South Korea’s national interests.