What is the US investigating and why?
On 12 March 2026, the United States Trade Representative (USTR) initiated investigations into 60 economies, including New Zealand, to assess whether those economies have failed to impose, or effectively enforce, bans on the importation of goods produced with forced labour. The investigations are being conducted under Section 301(b) of the Trade Act of 1974, which allows the United States to respond to foreign acts, policies or practices that are considered unreasonable or discriminatory and that burden or restrict US commerce. USTR Ambassador Jamieson Greer has stated that the investigations will examine whether trading partners have taken sufficient steps to block imports of such goods (which benefit from lower costs than domestically produced goods subject to forced labour rules), and how any failure to do so affects US workers and businesses.
New Zealand law on importing forced labour goods
While forced labour is unlawful within New Zealand, that prohibition does not extend to an import ban on goods produced overseas using forced labour.
Section 96 of the Customs and Excise Act 2018 provides the legal mechanism for import prohibitions, enabling import prohibitions to be imposed by Order in Council on the recommendation of the responsible Minister where the Minister considers the prohibition necessary in the public interest. At present, the only labour‑related prohibition made under this section is narrow, relating to the importation of goods produced wholly or partly by prison labour. There is no equivalent prohibition for goods produced by forced labour, child labour or modern slavery.
However, section 96 provides a clear pathway for the introduction of a broader forced labour import prohibition. While the Government has not yet formally responded to the investigation, it may prompt consideration of whether New Zealand’s current approach remains adequate and whether a broader import ban is necessary in the public interest.
What does this mean for New Zealand businesses?
If the investigation concludes that New Zealand's forced labour acts, policies or practices are unreasonable or discriminatory and burden or restrict US commerce, the US may respond by imposing trade measures, including tariffs and import restrictions. This power has been exercised before: for example, in December 2024, the USTR initiated a Section 301(b) investigation into Nicaragua's labour rights, human rights, and rule of law practices, and in October 2025 determined that those practices were unreasonable and burdened US commerce. The US subsequently imposed phased tariffs on all Nicaraguan imports not originating under the Dominican Republic–Central America–United States Free Trade Agreement rising to 15% by January 2028, demonstrating its willingness to impose trade consequences on partners that it considers having fallen short on labour and human rights standards.
Because New Zealand lacks a forced labour import ban, a potential outcome is therefore that the investigation results in increased or successor tariffs (even if current surcharges lapse), leaving tariff exposure as an enduring aspect of access to the US market.
More broadly, the investigation points to an increasing use of trade-based mechanisms to address forced labour. While New Zealand has introduced legislation that would require modern slavery reporting (see our previous update), the investigation highlights that disclosure‑based regimes alone may not meet the expectations of key trading partners and raises the possibility that New Zealand could consider implementing an import ban on goods produced using forced labour in order to align more closely with international best practice.
As a practical matter, it also reinforces the importance for businesses of having a detailed understanding of their supply chain inputs, particularly where those inputs relate to goods, sectors or jurisdictions at risk of forced labour. For certain large organisations carrying on business in New Zealand (whether directly or through a subsidiary), this will be a necessary consequence of complying with the newly introduced Modern Slavery Bill. Businesses may also wish to start considering what steps would need to be taken to reduce reliance on suppliers, components or products that present elevated forced labour risk (such as any contractual barriers), as well the benefits of strengthened supplier engagement, enhanced due diligence, diversification of supply chains, and the development of clear exit strategies. In summary, these measures may assist in mitigating both regulatory and trade related risk as modern slavery expectations continue to evolve and economic protectionism remains high on the political agenda.