Canada faces potential new tariffs from the United States, as President Donald Trump’s administration accuses Ottawa of inadequately preventing the import of products associated with forced labor. This concern arises during the renewal discussions for the Canada-United States-Mexico Agreement (CUSMA).
Trump Administration’s Concerns
The U.S. Trade Representative recently indicated that Canada has made minimal enforcement efforts against forced labor since a 2020 change in customs laws. The White House’s report criticized Canada, citing weak enforcement and a lack of published information regarding actions against forced labor products.
Reported Actions Against Forced Labor
- According to the Coalition Against Forced Labor, Canada Border Services Agency (CBSA) intercepted only 50 shipments suspected of forced labor.
- Out of these, just two shipments were turned away, highlighting significant enforcement gaps.
- Since 2020, it was reported that two shipments confirmed to have used forced labor involved textiles in 2024 and frozen seafood in 2025.
Expert Opinions
Martha Goncalves, a customs expert at PwC Canada, emphasized that Canada has not complied with USMCA regulations regarding forced labor enforcement over the past four years. She noted this non-compliance could impact current negotiations.
Political Reactions
Former Liberal MP John McKay criticized the U.S. administration for hypocrisy, suggesting that the forced labor allegations are merely a strategy to leverage tariffs in trade negotiations. He believes the focus on forced labor serves as a “bargaining chip” for the Trump administration.
Legislative Developments
In response to ongoing concerns, Canada passed legislation in 2023 requiring companies to report their efforts to combat forced and child labor within their supply chains. However, critics argue that enforcement has been insufficient, with the government not utilizing its powers effectively to investigate or penalize non-compliance.
Future Implications
Prime Minister Mark Carney acknowledged the U.S. report and confirmed that Canada would bolster its measures against forced labor. He emphasized a commitment to eliminate forced labor from the supply chain.
- Conservative MP Adam Chambers expressed disappointment over the lack of transparency regarding enforcement from the federal government.
- Experts suggest that businesses should proactively prepare for possible tariffs by documenting their supply chains and sourcing processes.
Next Steps
The U.S. Trade Representative’s report indicates that tariffs could target commodities like seafood, coffee, cotton, and textiles due to long-known forced labor issues. Public consultations are anticipated before any tariff implementations, with hearings scheduled for July.
