New Zealand exporters are staring down another tariff threat from Washington, and this time the trigger is forced labour. The Office of the United States Trade Representative has flagged an additional 12.5 percent duty on goods from dozens of countries it says are not doing enough to keep products made with slave or coerced labour out of their supply chains, and New Zealand is squarely on the list.
The proposal grew out of a Section 301 investigation the USTR launched on 12 March 2026 into 60 economies. Of those, the office found 54 had “failed to impose and effectively enforce a prohibition” on goods produced with forced labour, language the USTR says makes their trade practices unreasonable and a burden on American commerce. New Zealand sits in that larger group alongside Australia, the United Kingdom, India, Singapore, Russia and China, all of which face the proposed 12.5 percent rate. A smaller group of six countries would be hit with 10 percent.
For New Zealand the sting is that the new duty would stack on top of the 10 percent baseline tariff the Trump administration already applies to most of the country’s exports. Layered together, the effective rate on affected goods would climb towards a quarter of their value, a serious margin for primary producers who already work on thin returns. The USTR has not spelled out which New Zealand products it believes carry a forced labour risk, and hearings on the plan are not scheduled until 7 July in Washington, so nothing is locked in yet.
The Ministry of Foreign Affairs and Trade, which lodged a written submission to the investigation back in May, had not commented publicly when the proposal was first reported, and Trade Minister Todd McClay has not yet responded to this specific measure. The minister has spent much of the year managing a tariff relationship that keeps shifting under his feet, from the original blanket duties to a US Supreme Court fight over their legality, and this is simply the latest twist exporters are being asked to absorb.
The timing is awkward for a reason most people will miss. New Zealand is, right now, in the middle of writing its first law aimed directly at forced labour. The Modern Slavery Bill was introduced on 10 February 2026, and unusually for an election year it is a genuinely bipartisan effort. National’s Greg Fleming and Labour’s Camilla Belich are jointly sponsoring it, using a rarely deployed standing order to skip the members’ bill ballot, a move that needs the backing of 61 non-executive MPs to proceed.
“We got there with really strong support from the prime minister,” Fleming said when the bill was introduced, noting his pride at being able to use the mechanism to fast-track it. Belich, his Labour counterpart, framed the human scale of the problem bluntly, saying there are “an estimated 8,000 people in New Zealand suffering in modern day-slavery.” The pairing of a National and a Labour MP on the same bill, in the run-up to a contested election, is rare enough to be worth noting on its own.
The bill would apply to companies with annual revenue of 100 million dollars or more. Around 300 New Zealand firms already meet international standards on this, while another 700 or so would be drawn into scope for the first time. Those companies would have to audit their supply chains at home and abroad and publish a public modern slavery statement covering risks, due diligence and remediation. Firms that fail to comply could face criminal fines of up to 200,000 dollars and civil penalties of up to 600,000 dollars. The ACT Party opposes the measure, but with National and Labour aligned the sponsors are aiming to pass it before the country votes on 7 November, with a reporting regime taking effect in early 2027 and the first statements due in 2028.
Here is the catch that explains why a new law may not be enough to satisfy Washington. The Modern Slavery Bill is a reporting and disclosure regime, designed to force large companies to look hard at their own supply chains and tell the public what they find. It is not an enforced import ban of the kind the USTR is measuring countries against. The American test is whether a country actively blocks forced labour goods at the border and prosecutes breaches, and a transparency law, however well intentioned, does not automatically clear that bar. New Zealand could pass its bill and still find itself on the list.
With the general election now five months away, exposure to the United States and how to shield exporters from its tariff swings is shaping up as a real campaign question. The major parties have very different instincts on trade diversification, on how hard to push back against Washington, and on how far to go in policing supply chains. Voters who want to see where each party stands before they cast a ballot can compare the policies side by side using Newswire’s voting tool.
What do you think, should New Zealand toughen its forced labour laws to head off tariffs, or is this just Washington moving the goalposts again? Share your view in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job π
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