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The United States has designated the failure of foreign governments to tackle forced labour as an “unreasonable” trade practice, treating it as an actionable trade barrier under Section 301 authority.
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New bilateral trade agreements in the region now explicitly link tariff reductions to enforceable commitments from governments to eliminate forced labour from their supply chains.
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To maintain access to the US market, firms across South-East Asia must now prioritise proactive human rights due diligence and detailed supply chain mapping.
As the Trump administration conditions market access on forced labour commitments, such commitments have moved from the margins of trade policy to its core. Nowhere is that shift more consequential – or more contested – than in South-East Asia.
On 12 March, the US launched new investigations into some of its largest trading partners, examining whether they had failed to impose or effectively enforce bans on the importation of goods produced with forced labour.
The move marks the first time that the Office of the United States Trade Representative (USTR) has ever designated the ‘inaction’ of foreign governments to tackle forced labour as an ‘unreasonable’ trade practice.
These investigations, conducted under Section 301 trade authority, reflect an expansion of US trade enforcement actions that probe supply chains for goods produced with forced labour. Crucially, they also assess the regulatory responses of foreign governments to combat it, thereby treating forced labour as a trade barrier, actionable under US law.
For South-East Asian governments and companies that source from the region, this shift creates a pressing market access problem. This is because, across much of the region, economic growth has long been driven by exports to the US – one of the primary destinations for the region’s electronics, commodities, and manufactured goods.
At the same time, South-East Asia carries a significant and well-documented legacy of forced labour issues in those same export sectors: from rubber glove and semiconductor manufacturing in Malaysia to palm oil production and mineral processing in Indonesia.
Changing the rules of the road
According to international human rights group Walk Free’s Global Slavery Index, in the Asia Pacific (APAC) region as a whole, an estimated 29 million people live in modern slavery. The government response across the region stands at 40% – the second-lowest rate across the five assessed regions.
While governments have faced sustained pressure to address the scourge of forced labour across South-East Asia, policy responses have often been inconsistent and implemented without urgency. The Trump administration’s investigations and tariff policies that link market access to government action on reducing forced labour may finally change that.
The USTR’s decision to target governments’ inaction on forced labour is largely unprecedented, and is just the latest in a series of actions taken by the Trump administration to eliminate forced labour across the region’s supply chains.
Last year, USTR successfully negotiated new bilateral trade agreements with several South-East Asian countries, including Indonesia, Thailand, Malaysia, and Vietnam.
Those deals were negotiated under the concept of ‘bilateral, enforceable reciprocity’, meaning, in short, that they explicitly linked tariff reductions to commitments made by those governments to eliminate or greatly reduce goods produced with forced labour from entering their supply chains, and eventually, US ports.
These recent policy developments reflect a novel and more aggressive approach to tackling forced labour that is distinct from prior actions taken by the US government, including popular tools such as the Uyghur Forced Labor Prevention Act (UFLPA) and Withhold Release Orders (WROs).
Both the UFLPA and WROs focus on blocking the import of specific goods produced with forced labour into the US. The Trump administration has said that these new investigations will specifically focus on whether the failure of foreign governments to adopt and enforce similar prohibitions creates an unreasonable trade burden on US consumers.
Particularly, USTR is concerned about whether certain trading partners are creating an artificial cost advantage for goods produced under abusive conditions, framing the issue not only as a humanitarian issue, but also as a matter of economic policy and national interest. Fundamentally, these recent developments represent a shift away from preventing the importation of goods produced with forced labour and toward tackling it at the source.
Firms in South-East Asia face new pressures
For both domestic and foreign firms operating across South-East Asia, the most immediate consequence of the Trump administration’s recent policies will undoubtedly be a need for companies and their third-party suppliers to more concretely invest in supply chain traceability. This can allow them to demonstrate that their products (and the raw materials used to create them) are free of forced labour.
Over the past decade, some multinationals operating across the region have adopted frameworks that conceptualise how they intend to protect human rights and remedy any violations that may have occurred as a result of their business activities.
A major component of these policies is a prescription to proactively conduct what is known as human rights due diligence (HRDD). This is a voluntary process by which companies seek to identify, prevent, mitigate, and account for the adverse human rights impacts that their operations may cause or to contribute to, including forced labour.
Historically, companies pursued HRDD mainly when facing reputational crises (such as child labor scandals) or direct compliance mandates (like the UFLPA’s restrictions on Xinjiang-linked materials). That reactive era is ending.
Under the US’ new approach, credible and proactive HRDD is rapidly becoming a non-negotiable baseline to retain market access.
In practice, this means firms must build up to a new operational reality: detailed supply chain mapping (especially in high-risk areas), regular risk assessments, strengthened grievance mechanisms, and verifiable remediation plans.
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Failure to demonstrate this diligence won’t just invite buyer audits or investor scrutiny; it could expose entire export streams to US tariffs or import restrictions if governments are deemed non-compliant.
Whether these forced labour commitments endure as permanent features of US trade policy remains an open question. The message to the region, however, is unmistakable: supply chain transparency and proactive HRDD are now prerequisites for reliable access to the US market.
Governments and companies that move first by aligning with international standards and investing in enforcement capacity will be best positioned amid evolving regulatory pressures.
