FACT: The U.S. prosecutes about 200 cases of forced labor and human trafficking a year.

THE NUMBERS: Profits from a 2015-2021 forced labor scheme in U.S. onion- and blueberry-picking* –

~$200 million

* U.S. Attorney’s Office, Southern District of Georgia.

WHAT THEY MEAN:

On June 12, the U.S. Attorney for the Southern District of Georgia wrapped up a five-year prosecution of 24 individuals for a forced-labor scheme in onion- and blueberry-picking in southern Georgia, as the last three defendants — Brett Bussey, Margarita Rojas Cardenas, and Nery Rene Carrillo-Najaro — admitted to:

Ten days earlier, as the three were preparing their ‘guilty’ pleas, the Trump administration’s U.S. Trade Representative Office published a plan to impose tariffs of 12.5% on goods from 54 trading partners, and 10% on six more, claiming they don’t do enough to stop imports of goods made with forced labor. Together, the 60 economies — the EU and the U.K., China and Taiwan, Jordan and South Africa, Japan and the U.K., Australia and New Zealand, Chile and Peru, Mexico and Canada, etc. — provide about 97% of America’s imports. Extrapolating from the revenue temporarily sucked in by last year’s illegal “International Emergency Economic Powers Act” decrees, this will likely cost Americans around $100 billion a year.

The logic works like this: If foreign laws aren’t good enough, forced-labor “inputs” might flow into production chains. Their unnaturally low labor costs would make them artificially cheap. That in turn would make the final goods cheaper, displacing honorably produced American goods. As we noted last week, USTR’s report contains little actual evidence, but does feature four suggestive “case studies.” Two of these claim European Union members are depriving American malt liquor and cigarette businesses of some exports, as (i) Spain’s importing of Burmese rice “strongly suggests” that Spanish breweries might have purchased “at least some” rice produced with forced labor, and likewise (ii) Polish purchasing of tobacco from three Malawian companies placed under a CBP “Withhold Release Order” from November 2019 to May of 2021 blockage of imports of tobacco from three Malawi companies “strongly suggests” that “a significant proportion” of Poland’s tobacco imports before 2020 might have had forced labor content. Sample from the malt liquor passage:

“The TVPRA list [a Labor Department publication] has flagged rice from Burma as being at risk of forced labor since 2009. … While not all of Spain’s imports of rice from Burma were necessarily produced using forced labor, the prevalence of forced labor in rice production in Burma strongly suggests that at least some of Spain’s imports of rice were produced wholly or in part with forced labor. …Faced with higher input costs, Spain would have exported a lower volume of downstream malt beer products… [while] the United States would likely have experienced greater sales, revenues, and exports of malt beer, all else equal.”

Obviously, phrases like “at least some” and “strongly suggest” themselves suggest that the report’s authors aren’t really sure Spain or Poland bought forced labor goods. And more generally, though their unexamined premise about prices — forced labor means cheaper goods and a cost advantage — feels intuitively plausible and may sometimes be correct, it’s also sometimes clearly wrong.

The report’s specific claims about rice and tobacco, for example, don’t hold up well. It doesn’t include price data, but Burmese rice sells at $339/ton this month, only 3% below India’s $351/ton and about 10% below Asia’s $378/ton average; the U.S.’ $542/ton is far above the cost of not only Burmese, but any Southeast or South Asian mass-market rice. (And rice is a very small factor in malt liquor prices anyway, probably accounting for 0.5% to 2.5% of wholesale cost.) Likewise, Malawi tobacco costs about the same as tobacco from neighboring Mozambique. So at least in these cases, there’s no evidence of a big saving on input costs.

In the U.S., meanwhile, the Georgia case’s sentencing and indictment papers provide detailed information on the actual inner working of a large forced-labor enterprise in agriculture, which did not affect the cost of goods. Its operators ran a labor contracting company called Rojas Avila Harvesting with an office in Bacon County, along with several shell companies. Farmers in six adjacent counties paid them to recruit seasonal workers from Central America for seasonal harvesting of onions and blueberries from 2015 through 2021, including handling H2A visa fees and paperwork, along with wages, transport, and other labor costs. Once the workers arrived for their jobs, the Rojas Avila Harvesting officers confiscated their passports, took much of their wages, assigned them debts to cover the travel costs, and threatened them with violence should they try to leave or get help. The trials and evidence since 2022, and journalistic accounts like this one from ProPublica, report that the scheme trapped at least 500 men and women in forced labor and brought its authors over $200 million. Though one farmer pleaded guilty to participating in the scheme, most appear to have been unaware of Rojas Avila’s actions.

Some tentative lessons:

ILO research validated: The Rojas Avila Harvesting scheme closely matches the International Labour Organization’s description of the nature of forced labor worldwide. ILO’s reports argue that withholding of wages, confiscation of passports, and debt bondage are especially frequent forms of forced labor; consider threats of violence relatively common; and believe risks are especially high for migrant workers. This fits Rojas Avila’s operations perfectly, suggesting that forced labor in the U.S. may not differ drastically from forced labor in other countries.

Forced-labor enterprises don’t always charge low prices: USTR’s report assumes forced-labor enterprises naturally sell their goods at below-market prices, but that’s not how the Rojas Avila Harvesting scheme worked. Its managers just diverted wage payments from workers to themselves to get as much money as they could. The onions and blueberries that its unlucky workers picked appear to have gone into American food industry and grocery supply chains at standard market prices.

U.S. itself not free of forced-labor goods: Between 2015 and 2020, the U.S. exported blueberries to 59 countries and onions to 80, with Canada the largest buyer and Caribbean island countries most reliant on U.S. supply. Press coverage suggests the farms contracting with Rojas Avila Harvesting sold to domestic buyers rather than exporting, so these particular berries and onions might not have entered international supply chains, but at this point certainty may be impossible. And while abuses on the scale of Rojas Avila Harvesting are likely rare, each year since 2020 the DoJ has prosecuted 183 to 208 people for forced labor and human trafficking crimes a year since 2020, it would probably be naïve to consider them wholly unique.

Against that background, the logic USTR employs for Spanish malt and Polish cigarettes would encourage worldwide policies along the following lines:

• Some U.S. onions and blueberries were harvested in the recent past with forced labor;
• Therefore, all U.S. onions and blueberries are suspect;
• Buyers of U.S. onions and blueberries could use them to make processed foods like sauces and pies, unfairly competing with our food;
• A foreign country that buys any U.S. onions and blueberries should therefore face tariffs on everything it produces.

Again, forced labor remains an egregious human rights violation in the United States or anywhere else, and forced-labor trade an appropriate target for policy. But Americans, as well as targeted countries, would have strong and well-founded complaints about a policy like this. As the EU, Canada, the U.K., Korea, Australia, New Zealand, Japan, Taiwan, and dozens of developing countries do about the administration’s claims about them. All, really, should view forced labor not as a pretext for tariff increases, but a human rights and law-enforcement concern broadly shared and requiring sustained cooperative work to solve.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

USTR’s “Section 301” report calls for tariffs on goods from 60 trading partners, alleging insufficient laws against forced labor imports.

Meanwhile:

The Justice Department’s 2021 indictment of 24 Rojas Avila Harvesting officers and employees.

On June 12, the U.S. Attorney for the Southern Georgia District announces the final sentencings.

ProPublic tells one trapped worker’s story.

And a surreal footnote: One farmer participated in the scheme and pleaded guilty in 2022. Others appear to have been duped. One of the latter, a blueberry proprietor and now Georgia State Senator, apparently unaware of the abuses, actually appeared at a USTR hearing in 2020 with a retrospectively brazen appeal for high tariffs on Mexican blueberries, arguing that supposedly low Mexican wages and labor standards provided an “unfair cost advantage” over Georgia businesses.

Compare & contrast:

Trump admin. scraps U.S. support for forced labor reduction abroad.

The Biden administration’s four-year program against forced labor and human trafficking.

And EU law on trade in forced labor products.

International research and data:

The International Labour Organization studied the scale of forced labor as of 2021.

… and profits drawn from it.

U.S. data and policy:

DHS summarizes forced labor cases by industry type.

The Justice Department on forced labor and human trafficking prosecutions.

CBP’s Withhold Release Orders and Findings since 2017.

… and similar data on Uyghur Forced Labor Prevention Act seizures.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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FACT: Americans supply over 80% of the Bahamas’ imported goods.

THE NUMBERS:

Assuming 10% and 12.5% tariffs on goods imports, extrapolating from 2025 tariff collection under 10% “IEEPA” tariffs.
** CBP statistics; annual totals vary but average $0.8 billion over the last 8 years.

WHAT THEY MEAN: 

Metaphorically shaking his fist at the Supreme Court this past February, Treasury Secretary Scott Bessent says the administration will replace its illegal “International Emergency Economic Powers Act” (“IEEPA”) tariff decrees with new ones using different laws:

“This administration will invoke alternative legal authorities to replace the IEEPA tariffs. We will be leveraging Section 232 [a “national security” law run by the Commerce Department] and Section 301 [see below] tariff authorities that have been validated through thousands of legal challenges.”

One such decree, a 98-page “Section 301” report published by the U.S. Trade Representative Office, showed up two weeks ago. It announced tariffs of 10% and 12.5% on 60 trading partners — Colombia and Korea, the UK and the European Union, Jordan and South Africa, the Bahamas and New Zealand — beginning late July, on the basis of a claim that they don’t do as much as the U.S. to stop trade in goods made using forced labor. Together, they provide about 97% of all U.S. imports, from crude oil and semiconductors to clothes, winter vegetables, flat-screen TVs, hand tools, fertilizer, and dinner plates. Should the decree go into effect, taking its various exceptions (energy, USMCA goods, etc.) into account, it would likely cost American families, farmers, manufacturers, retailers, restaurants, building contractors, and other goods-buyers about $100 billion a year — more than 100 times the $0.8 billion average annual value of goods CBP blocks at U.S. borders on forced-labor suspicion.

As to its legal prospects, Mr. Bessent is correct that some past “Section 301” tariffs were challenged and survived. But no two “301” actions are alike, and the fact that courts allowed earlier ones doesn’t mean they’ll accept this one. Let’s look:

“Section 301,” a trade law dating to 1974, allows the U.S. government to identify “an act, policy, or practice” of a foreign government that in some “unreasonable” way “burdens or restricts U.S. commerce” and use tariff threats as a negotiating tool to fix it. USTR’s complex four-step argument for using it here (setting aside, for now, Bessent’s earlier statement of the administration’s real motive) is –

(i) 54 countries on its list lack a law like the U.S. ban on all imports of goods made with forced
labor. Six more (Canada, Ecuador, Indonesia, the EU, Mexico, Pakistan) do have such laws, but the report says they don’t enforce them as well as the United States does. Therefore,
(ii) manufacturers in these countries may be unwittingly incorporating forced labor goods as inputs, which
(iii) might allow them to produce goods more cheaply than similar American stuff. This, in turn,
(iv) justifies a tariff on any scale the administration wants — in this case, one vastly greater than any estimate of actual forced-labor trade flows.

If this decree is to survive legal challenge this fall, the administration must convince courts of three things:

1. The existence of unreasonable “acts, policies, or practices”: Here, the claim is that the absence of a forced-labor import ban identical to America’s (passed in 1930, updated in 2015) is the same as the presence of the unreasonable “act, policy, or practice” the “Section 301” statute requires. This seems a stretch, but some similar previous efforts — for example, investigations citing weak copyright or patent protection overseas — have held up. Set against this, as former U.S. trade/labor negotiator Desiree LeClercq observes, the investigation’s premise is that the U.S.’ forced-labor program is ideal, which isn’t necessarily so. LeClercq notes, for example, that the EU’s forced-labor law has stronger evidentiary rules than America’s and — unlike the U.S. — not only bans imports from other countries but also exports of goods containing forced labor inputs from Europe. And from a beyond-trade perspective, U.S. forced-labor policy has steadily weakened over the past 18 months, as the Trump administration’s 2025 “DOGE” program abolished most efforts to fight forced labor overseas while cutting the Labor Department’s domestic Wage and Hour Division staff from 1,435 and 974 field inspectors 2024 to a requested 1175 and 611 field investigators this year.

2. The existence of a “burden on commerce”. Should the court accept the first argument, the administration would then need to demonstrate that the “acts, policies, or practices” impose a “burden” of some sort on U.S. commerce. USTR’s report doesn’t seem to do this at all.

First, it doesn’t show that any listed country actually buys any goods made with forced labor. Its 98 pages cite no actual, verified shipment of such goods passing customs in Sri Lanka, Italy, South Africa, Uruguay, or anywhere else. Rather, citing CBP trade-blockage figures and International Labour Organization estimates of the possible scale of forced labor output (as distinct from “trade”), it notes that some forced-labor goods do cross borders, and asserts without proof that other countries likely import more of them than does the United States.

The nadir-of-credibility point is probably its claim about the Bahamas — a small island chain off Florida, population 404,000 — whose modest shipments of goods to the U.S. will now get a 12.5% tariff. (It’s mainly fuel oil, sea crayfish, and sand for Floridian customers.) The report offers no evidence at all that the Bahamas buys any forced labor goods — and since over 80% of the things Bahamians actually do buy from abroad are American*, the stats suggest that if any were made with forced labor, they’re most likely from America itself.

* U.S. exports to the Bahamas are principally refined fuels from Texas and Louisiana, and prepared foods from Florida. IMF World Economic Outlook database for Bahamas imports by country; Commerce Department TradeStats Express for U.S. exports to Bahamas by state.

Second, it doesn’t demonstrate that even if a country on the list does unwittingly import forced-labor goods, that would impose any “burden” on U.S. business, labor, or agriculture. Earlier “301” investigations, even in the first Trump administration, tried to demonstrate such “burdens” through specific facts and economic analysis. For example, the 215-page 2017 report on Chinese forced technology transfer and industrial espionage identified policy directives, government agencies assigned to carry them out, and the buildings in which the agencies operated, and then conducted a professional modeling of economic impact, estimating about $50 billion worth of “burden” through captured intellectual property, lost exports, artificial creation of new competitors, and so on.

Nothing like that shows up here. Instead, the report simply asserts that forced-labor production naturally creates a flow of unfairly low-priced goods that displace lawful competitors. This may be true — forced-labor enterprises might want to grab market share by selling at unnaturally low prices — but it also might be wrong, as they might equally want to grab maximum profit by selling at market prices. Only empirical analysis could settle this question, and the report offers none.

In fact, the main current analysis of worldwide forced-labor profit in goods-producing industries — the ILO’s 2024 estimates of $35.4 billion in industry and $5.0 billion in agriculture, cited in the report — suggests the latter is more likely. And CBP’s annual average of $0.8 billion worth of imports a year blocked on forced labor grounds, at roughly 0.02% of the U.S.’s $3.3 trillion annual goods-import total, suggests any economic impact may be too small to measure. Absent a price advantage, forced labor remains an egregious human rights violation and an appropriate policy target, but couldn’t legally justify any “301” tariff — let alone one on a scale so much larger than the actual import blockages.

3. Compliance with Congressional intent. Finally, stepping back a bit, the administration would need to show that it is acting as Congress intended when it wrote up the “301” statute five decades ago. One of the drafters, Alan Wolff – formerly a Deputy USTR and WTO official, now a scholar at the Peterson Institute for International Economics – doubts it can, arguing that the statute doesn’t authorize multi-country investigations or general tariff increases. And per Bessent, the investigation is meant not to solve specific trade-related policy problems, but rather to serve as a pretext for replacing the Congressionally authorized U.S. Harmonized Tariff Schedule by decree with a new tariff system of the administration’s own design. As such, it is perhaps not a real “301” investigation at all, but just Mr. Trump’s third attempt to take an old trade law meant for a very specific purpose, and try to use it to nullify Congress’ constitutional authority over tariff rates.

That’s not what Congress meant these laws to do. Courts so far haven’t applauded attempts to use them that way. And whatever the courts do this time, of course, Congress has the power to protect its authority and restore Constitutionally appropriate management of tariff rates, and can use it whenever it’s ready.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

Treasury Secretary Bessent (Feb. 20) says “232” and “301” decrees will replace “IEEPA” tariffs.

The U.S. Trade Representative’s June Report announcing “Section 301” tariffs ostensibly for “inadequate forced labor laws.”

The “Section 301” statute.

Alan Wolff of PIIE on the origins and applicability of “301”, arguing among other things that it doesn’t authorize multi-country investigations or general tariff increases.

And Carnegie scholar Peter Harrell takes a similar view in Reason this week.

Compare & contrast:

The Biden administration’s four-year program against forced labor and human trafficking.

Trump admin. scraps forced labor reduction programs abroad.

And the EU law on trade in forced labor products.

International research and data:

The International Labour Organization studied the scale of forced labor as of 2021.

… and the profits drawn from it.

U.S. data and policy:

CBP’s Withhold Release Orders and Findings since 2017.

… and similar data on Uyghur Forced Labor Prevention Act seizures.

And at home, DHS has stats on cases by industry type; the Department of Justice itemizes about 180 prosecutions for forced labor and peonage each year; and the Labor Department proposes cuts to its investigation force.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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