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The Donald Trump administration in the US has launched sweeping trade investigations under Section 301 into India, China and 16 other major economies over what it described as excess industrial capacity, a move that could potentially pave the way for new import taxes.
On Wednesday, the Office of the United States Trade Representative (USTR) announced two separate probes under Section 301 of the Trade Act of 1974. One investigation will examine excess industrial capacity among key trading partners -- including India -- while the other will focus on goods allegedly produced using forced labour.
Section 301, which allows the US administration to investigate and respond to unfair trade practices by other countries that “harm US businesses”, is considered one of Washington’s most powerful unilateral trade enforcement tools. It allows the US to impose trade measures even without approval from the World Trade Organization (WTO).
The move aligns with Trump’s efforts to revive his global tariff strategy after the Supreme Court of the United States struck down a major part of his tariff programme, ruling that imposing tariffs by declaring an economic emergency was unconstitutional.
“The policy remains the same, the tools may change depending on, you know, the vagaries of courts and other things," said US Trade Representative Jamieson Greer, stressing that the goal was to protect American jobs.
Apart from India and China, the European Union, Japan, South Korea, Mexico, Taiwan, Vietnam, Thailand, Malaysia, Cambodia, Singapore, Indonesia, Bangladesh, Switzerland and Norway are also subject to investigation by the US administration.
Greer said the probe would focus on countries where manufacturing output appears disconnected from real market demand.
“These investigations will focus on economies that we have evidence appear to exhibit structural excess capacity and production in various manufacturing sectors, such as through larger persistent trade surpluses or underutilised or unused capacity,” he told reporters during a conference call.
According to Greer, the probe will examine whether government policies in these economies, including subsidies, suppressed wages, support for state-owned enterprises and subsidised lending, have enabled companies to produce far more goods than global demand, potentially harming US industries.
The USTR said indicators being examined include persistent trade surpluses, underutilised industrial capacity and state-backed production policies that could give foreign manufacturers an advantage over American firms.
Greer also announced plans to launch another Section 301 investigation into goods produced using forced labour, covering more than 60 countries.
The move could expand existing restrictions under the Uyghur Forced Labour Protection Act, which already limits imports tied to China’s Xinjiang region.
“President Trump is determined to pursue tariffs and will find a way to deal with unfair trading practices,” Greer said.
“He’ll find a way to get our trade deficit down and protect US manufacturing. We have a lot of tools to do it.”
Public comments on the excess capacity probe will be accepted until April 15, with a hearing expected in early May.
The investigations come as US officials prepare for trade talks with Chinese counterparts in Paris, ahead of a possible meeting between Trump and Chinese President Xi Jinping later this month.
