Forced labor is rapidly emerging as a geopolitical risk for global supply chains, yet sourcing teams are not treating it as a priority, a new report from Verisk Maplecroft warned Thursday.
Import restrictions such as the Uyghur Forced Labor Prevention Act in the United States, Canada’s forced labor prohibition and the European Union’s looming Forced Labour Regulation are acting as “de facto trade controls across borders,” the risk analytics firm said, empowering authorities to detain shipments with no grace period or warning.
With a significant share of imports into the United States and the EU arriving from countries with high forced labor risk, companies will have to factor in geopolitical tensions when assessing where these laws may be enforced. Across goods imported into the EU, for instance, roughly $903 billion may be exposed to high or very high forced labor risk, including 95 percent, or $44.7 billion, of apparel imports, Verisk Maplecroft estimates.
Verisk Maplecroft
Exposure to forced labor-tainted shipments is similarly pronounced in the United States, with more than $1 trillion of imports facing elevated risk. Here, apparel also stands out: 98 percent of U.S. apparel imports come from countries where the risk of forced labor is high or very high, according to the firm’s data. The top six sourcing countries are all in Asia, with five ranking in the highest risk category of Verisk Maplecroft’s Forced Labour Index, which evaluates the risk of modern slavery and human trafficking across 198 countries.
“The blind spot for many companies is that enforcement risk does not map cleanly to supplier-level labor risk,” said James Allan, head of corporate risk and sustainability at Verisk Maplecroft. “Even businesses with limited direct exposure can face sudden disruption if regulators target a product, a country or an upstream link in the supply chain.”
Enforcement is also increasingly shaped by geopolitical and trade dynamics. A clear example is the recent conclusion of the U.S. Trade Representative’s Section 301 investigations, which proposed tariffs of up to 12.5 percent on countries it deemed to have failed to implement or effectively enforce bans on forced labor imports.
The development is significant, Allan said, because many of these jurisdictions wouldn’t typically be flagged during supplier due diligence. With enforcement expanding beyond supply chain risk toward “broader, country-level considerations shaped by trade objectives and political relationships,” procurement teams need to start managing forced labor as part of a full-spectrum risk approach rather than simply as a legal or moral obligation.
“They will have to take a dual approach that not only looks at where they are exposed to forced labor risk, but also if an enforcement event is likely due to geopolitical considerations,” he added.
