Shipping containers at the Port of Montreal on April 14, 2025.Carlos Osorio/Reuters
The United States says in a new report that Canada is failing to stop foreign goods made with forced labour from entering its market, a finding that comes as Washington is in the midst of a formal probe into the matter that could lead to more tariffs on Canadian products.
The 2026 National Trade Estimate Report on Foreign Trade Barriers from the U.S. government says it appears Canada is importing goods that cost less than they should be because they were made with forced labour.
It’s an early indication of how the U.S. will likely find against Canada as it pursues investigations of 60 countries under Section 301 (b) of the Trade Act, and could result in the United States imposing tariffs of as much as 25 per cent on goods from countries that it deems are falling short, analysts say. These probes were announced in mid-March.
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Canada pledged to the U.S. that it would ban imports of products made with forced labour as part of negotiations that led to the United States-Mexico-Canada Agreement (USMCA) signed in 2018.
Ottawa amended the Customs Tariff Act on July 1, 2020, to prohibit forced-labour imports in keeping with its pledge made under the USMCA. It also passed a law, the Fighting Against Forced Labour and Child Labour in Supply Chains Act, that came into effect in 2024 and requires government and businesses to annually report on steps they have taken to identify forced labour in their supply chains.
However, the Office of the United States Trade Representative told U.S. President Donald Trump and Congress in the trade barrier report, released late Tuesday, that Canada’s measures are not working.
“It does not appear that Canada is effectively enforcing its forced labor import prohibition, meaning goods made with forced labor may be able to enter and compete in Canada’s market,” the report says. “This issue may artificially suppress costs, including labor costs, which may give certain goods from and within Canada an unfair advantage.”
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This conclusion contradicts Prime Minister Mark Carney’s recent assurances that Canada has a robust system to stop imports made with forced labour in countries such as China.
“Canada has a comprehensive legal framework around that. We take it very seriously,” Mr. Carney told reporters on March 13 after the U.S. Section 301 investigations were announced. “There are strong provisions in Canadian law against forced labour,” he said, adding “we expect those to be followed and when they’re not, they are prosecuted.”
Canada has seized few imports made with forced labour.
The Canada Border Services Agency said on March 13 that since 2021 it has detained multiple shipments because of concerns that the goods might be products of forced labour.
Of these, two were ultimately blocked from entering Canada after CBSA determined they were produced with forced labour: a shipment of textile products in 2024 and a shipment of frozen seafood in 2025. Both were from China.