The edict, as it is wont to do these days, came from social media.
“Great work today by @USDOL @SecretaryLCD @Sonderling47 cancelling $577M in ‘America Last’ grants for $237M in savings,” Elon Musk’s Department of Government Efficiency, or DOGE, wrote late Wednesday on X, a site that the billionaire owns.
What followed was a list of some of the biggest international recipients of U.S. funds to strengthen workers’ rights and combat child and forced labor:
“-$10M for ‘gender equity in the Mexican workplace’
– $12.2M for ‘worker empowerment in South America’
– $6.25M for ‘improving respect for Worker’s rights in agricultural supply chains’ in Honduras, Guatemala, and El Salvador
– $5M for ‘elevating women’s participation in the workplace’ in West Africa
– $4.3M for ‘assisting foreign migrant workers’ in Malaysia
– $3M to ‘enhance social security access and worker protections for internal migrant workers’ in Bangladesh
– $3M for ‘safe and inclusive work environments’ in Lesotho.”
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That DOGE had set its cost-cutting sights on the Department of Labor’s Bureau of International Labor Affairs, better known as ILAB, long before Lori Chavez-DeRemer was sworn in as the Secretary of Labor earlier this month was clear, according to one person familiar with the situation, who like several others interviewed for this story, spoke on the condition of anonymity because they were not authorized to discuss matters publicly.
But Chavez-DeRemer was immediately on board with the decision, writing on X after citing DOGE’s post that the “era of Americans’ tax dollars bankrolling foreign handouts for things like ‘Improving Gender Equity in the Mexican Workplace’ is over” and that the federal government had “just saved $237M, which will be used to reinvest into developing our workforce and protecting our children.”
She ended her post with the hashtag #AmericaFirst and an emoji of the American flag.
It had only been earlier that day that John Clark, a Trump-appointed policy advisor, had instructed ILAB’s leadership to axe nearly 70 outstanding cooperative agreements, spanning 40 countries, “for lack of alignment with agency priorities and national interest,” according to an email reviewed by Sourcing Journal with the subject line “ILAB Grant Termination.” This was followed by a second notice, also obtained by this publication, informing the bureau’s staffers of the “difficult message to receive” and acknowledging their work in “building these programs over the years.”
By then, rumors had already been bubbling frenetically. For many of ILAB’s grantees, which had yet to receive official notices, however, DOGE and Chavez-DeRemer’s social media posts were the first they heard of the cancelation of their congressionally appropriated funds—several of which, according to start dates on an online federal database, had been enacted under the first Trump administration and were already coming to a close, casting into doubt the accuracy of DOGE’s attributed savings.
But many others were just hitting their stride in work deemed critical to ensuring that American labor isn’t being undercut by unfair competition or ceding soft-power ground to adversaries such as China. More than 40 percent of the active grants were earmarked for the International Labour Organization, a standards-setting arm of the United Nations that had been allocated some $215 million to tackle child labor in Myanmar and West Africa, develop a new industrial relations framework in Vietnam and battle human trafficking in Mexico.
A number of the ILO’s programs were also tied with U.S. trade agreements. Better Work, a factory monitoring program that promotes decent work and competitiveness in global garment supply chains, for instance, is statutorily required in Haiti under the HOPE II legislation. The ILO’s efforts to improve union democracy, transparency and accountability in Mexico aligned with provisions on collective bargaining in the United States-Mexico-Canada Agreement. And “All Hands in Kenya,” a four-year project to provide technical assistance to improve compliance with international standards, addressed labor concerns identified under the African Growth and Opportunity Act as part of negotiations of the U.S.-Kenya Strategic Trade and Investment Partnership. All of them had the overarching goal of protecting American businesses and American workers.
Mexico, in particular, has done some “pretty incredible things” with ILAB’s technical assistance, such as closing the wage gap between the United States and Mexico for the first time, one person said. Ripping away that support at such a fragile time would be devastating for the country’s worker-led labor movement, which had scored recent wins with the help of the USMCA’s Rapid Response Labor Mechanism, including at a denim factory in the state of Aguascalientes.
“The precipitate elimination of all of the Department of Labor’s international grants is both unwise and unfortunate,” said Thea Mei Lee, who served as deputy undersecretary for international affairs at the Department of Labor during the Biden administration, where, among other things, she enforced labor rights provisions under the USMCA and helped implement the Uyghur Forced Labor Prevention Act.
“You can’t put and keep ‘America First’ if we are embedded in a global economy where workers’ rights are trampled and disrespected,” Lee added. “This careless decision ignores longstanding bipartisan consensus that American workers and businesses benefit from U.S. government projects that support foreign governments, business and civil society in maintaining and enforcing international labor protections.”
An ‘important tool’
Courtney Parella, spokesperson for the Department of Labor, said that Americans “don’t want their hard-earned tax dollars bankrolling foreign handouts that put America last.” Writing in an email, she said that the American people “resoundingly elected” President Donald Trump with a “clear mandate to reduce federal government bloat and root out waste.”
“That’s why we’re focused on improving oversight and accountability within this program—and across the entire department—while prioritizing investments in the American workforce,” she added.
But eradicating ILAB’s grants takes an “important tool” for American workers off the table, said Shawna Bader-Blau, executive director of the Solidarity Center, a Washington, D.C.-based workers’ rights nonprofit that estimates it’s losing $78 million over multiple years—amounting to 20 percent of its funding—due to the cuts, which will add to the margin squeeze that’s been tightening since the decimation of the U.S. Agency for International Development.
“When America is trading with another country in a free trade agreement context, like the USMCA, it’s a way to make sure that workers are not so exploited in another country, where companies might rush to outsource because it’s cheaper,” she said. “There’s a real, tangible impact on American workers that can be felt. And it’s pretty upsetting when you think about the state of our economy and the struggle American workers face every day to make ends meet.”
Then there’s the moral argument. Bader-Blau said she doesn’t think that American consumers want to buy garments made by children or under sweatshop conditions. Terminating all of ILAB’s programs, she said, is a “huge blow” to the hard-won progress that has been made on child and forced labor since 1947, when the bureau was founded under President Harry S. Truman as part of post-World War II reconstruction efforts.
“The cancellation of the ILAB grants is devastating for global garment workers and consumers who want assurances that our clothing is made with human dignity,” said Mark Anner, dean and distinguished professor at the Rutgers School of Management and Labor Relations. “Garment workers have notoriously faced some of the gravest worker rights violations, and ILAB was working hard with others to address that. This decision is also bad for U.S. workers and businesses. You cannot compete with workers who make poverty-level wages because their fundamental rights are denied.”
Privately, fashion brands and retailers have told ILAB that they wouldn’t be able to conduct the type of due diligence necessary to ensure compliance without the support of its capacity-building initiatives in their sourcing countries. The bureau also plays an essential role in negotiating for the federal government. “The stick is only so effective,” as one person put it. Private businesses, no matter their size, clout or coffer size, they say, do not possess the authority and influence of the U.S. government to enforce trade agreement commitments or reduce the risk of forced labor-tainted products—the same ones that are verboten in the U.S. market under the 1930 Tariff Act.
The loss of ILAB’s grants—and potentially ILAB itself—the American Apparel & Footwear Association said Wednesday night, would quickly turn a level playing field into an uphill battle, not only for its members, which include American Eagle Outfitters, Gap Inc., J.Crew Group and Levi Strauss & Co., but also for their 3.5 million American workers.
“ILAB’s work reflects the values of the American people and the Trump administration by putting American workers and businesses first,” said Nate Herman, AAFA’s senior vice president of policy. “Eliminating all ILAB grants instead puts American workers and American businesses last, leading to unfair competition with countries and foreign businesses that are not held to the same laws and standards for labor abuses, forced labor, human trafficking and child labor.”
Jon Jacoby, CEO of GoodWeave International, a nonprofit that works to eliminate child and forced labor in global supply chains, said that the Department of Labor, by “aiding and abetting” DOGE, is taking a “willfully shortsighted and woefully self-defeating steps to end funding of all grants made by its very own international bureau.” ILAB, which worked with GoodWeave to support its work in Afghanistan before the Taliban seized power, had previously called its certification program for child labor-free certified rugs and home textiles an “example in action.”
“These cuts not only undermine a well-established bipartisan consensus to uphold American interests and values linked to global supply chains—from carpets and clothing to cotton and cobalt, from Bangladesh to Brazil and beyond,” Jacoby said. “They also expose millions of American workers and businesses alike to even more unfair competition of imported goods made under conditions of forced labor, child labor and other forms of extreme worker exploitation. It’s high time for a rethink.”
That rethink is especially crucial for the workers who toil in the most precarious parts of the garment production system, insiders say. ILAB, they say, has set a global standard for labor rights, including through the annual publication of its findings on the worst forms of child and forced labor, which identifies exploitation hotspots. To discount that is to disregard the fact that child and forced labor exists in overseas supply chains that directly affect American consumers.
“This action was a stamp of approval by the Trump administration that the Trump administration is okay with forced labor in the world,” one person said. “This is going to make it more permissible for companies to take advantage of the very most vulnerable people: children who are working in brick towns, in seafood processing centers, in palm plantations around the world. It’s creating a space for China to come in and do business with other countries where we know that they perpetuate slave labor, as they do in Xinjiang. This is a stain on humanity.”