New Forced-Labor Tariffs Could Hit Imported Hops, Malts, and Equipment

On June 2, the Office of the United States Trade Representative (USTR) issued a notice of findings from its three-month investigation into other nations' alleged failure to impose and effectively enforce a prohibition on the importation of the products of forced labor.

• The investigation found that many major U.S. trading partners, including Canada, Mexico, the European Union, the United Kingdom, and China, had failed to impose and/or effectively enforce prohibitions on the importation of such products.
• As a result, USTR recommends imposing 10% and 12.5% tariff duties on most products imported from those countries, although the finding includes a lengthy appendix of exceptions.

Upshot: If the recommendation is implemented, brewers could see additional tariffs imposed on a variety of imported goods, although USTR's recommendations would not impose additional tariffs on aluminum or steel, or on duty-free Canadian barley and barley malt.

Background

The investigation and subsequent findings arise out of Section 301 of the Trade Act of 1974. The Act permits the United States to impose tariffs in response to unreasonable, discriminatory, or unjustifiable trade activities by other nations. This month's findings relate to forced labor, such as slave labor, that remains common in some parts of the world. According to USTR, because the countries investigated have not done enough to keep the products of forced labor out of their markets, this inaction gives those economies an unfair advantage against the U.S.

USTR's decision to launch the investigation is widely seen as a response to the Supreme Court's February 20, 2026, decision to strike down the so-called "reciprocal" tariffs imposed by the Administration in April 2025 on many U.S. trading partners. Those tariffs, imposed under the International Emergency Economic Powers Act (IEEPA), were found to exceed the administration's statutory authority by the Supreme Court. Immediately after the decision, the Administration indicated that it planned to re-impose broad tariffs using other legal authorities. The investigation under Section 301 concerning forced labor practices was announced several weeks later.

The USTR investigation found that some countries, including Canada, Mexico, the European Union, and the United Kingdom, impose restrictions on the products of forced labor or have undertaken to impose restrictions in recent agreements with the U.S., but have failed to adequately enforce restrictions to date. For such countries, USTR recommends the imposition of 10% tariffs on all goods from those markets, subject to a variety of exemptions. In the case of countries that do not impose restrictions on the products of forced labor, USTR recommends the imposition of 12.5% tariffs, subject to the same exceptions.

What This Means for Brewers

Brewers can breathe a sigh of relief over two important aspects of USTR's recommendations. First, goods currently subject to so-called national security tariffs (imposed under Section 232 of the Tariff Act) would not be subject to the proposed additional tariffs. This category of goods includes imported aluminum, steel, and "derivative" products made from aluminum and steel, all of which already are the subject of 50% tariffs. So although the recent announcement does not provide relief from the tariffs that already have caused increases in the prices of aluminum cans, steel kegs, and other equipment, it does not add additional tariffs on such goods.

Second, goods currently coming into the U.S. duty-free under the United States-Mexico-Canada Agreement (USMCA) are not implicated by USTR's findings and proposed remedies. This category of goods includes Canadian barley and barley malt, which U.S. craft brewers rely upon for adequate supply. While a future change in USMCA treatment may still occur, for now USTR does not propose any alteration to the duty-free status quo.

Nevertheless, a host of goods that craft brewers rely on, such as imported hops, specialty malts, equipment, and chemicals, may now be subject to 10% or 12.5% duties. Notable trading partners subject to these tariffs include:

• The European Union - 10%
• The United Kingdom - 10%
• China - 12.5%
• Japan - 12.5%
• Australia - 12.5%
• New Zealand - 12.5%

The USTR findings published on June 2 include a lengthy appendix of proposed exemptions from the recommended new tariffs. Notably, however, those exemptions do not cover hops or barley for malting purposes. To understand whether the additional Section 301 tariffs may be applied to other imported goods that a brewery may be purchasing, we recommend checking with your customs broker (if the brewer is importing directly) or your supplier.

The Brewers Association plans to file comments with the USTR on its recent findings and recommendations and will continue to educate government officials about the negative impact tariffs have on members' small U.S. manufacturing businesses.