Daijiworld Media Network - Washington

Washington, Mar 12: The administration of Donald Trump has launched sweeping trade investigations under Section 301 targeting India, China and 16 other major economies, alleging that their industrial policies have created excess manufacturing capacity that harms American producers. The move could potentially pave the way for fresh US import tariffs.

The Office of the United States Trade Representative (USTR) on Wednesday announced two separate investigations under the Trade Act of 1974. One probe will examine excess industrial capacity among key trading partners, while the other will focus on goods allegedly produced using forced labour.

Section 301 of the Trade Act allows the US administration to investigate and respond to what it considers unfair trade practices by other countries that harm American businesses. It is regarded as one of Washington’s most powerful unilateral trade enforcement tools, enabling the US to impose trade measures even without approval from the World Trade Organization (WTO).

The latest move comes as the Trump administration attempts to revive its tariff strategy after the Supreme Court of the United States struck down a previous programme that imposed tariffs by declaring an economic emergency, ruling that the approach was unconstitutional.

US Trade Representative Jamieson Greer said the administration remains committed to protecting American jobs despite the legal setback.

“The policy remains the same, the tools may change depending on the vagaries of courts and other things,” Greer said, stressing that the focus is on safeguarding domestic industries.
Apart from India and China, the probe also covers the European Union, Japan, South Korea, Mexico, Taiwan, Vietnam, Thailand, Malaysia, Cambodia, Singapore, Indonesia, Bangladesh, Switzerland and Norway.

Greer said the investigation would focus on economies where manufacturing output appears disconnected from actual market demand. The probe will examine factors such as persistent trade surpluses, underutilised industrial capacity and government-backed policies that could give foreign manufacturers an advantage over US firms.

According to the USTR, the investigation will review indicators such as state subsidies, suppressed wages, support for state-owned enterprises and subsidised lending that may enable companies in some economies to produce far more goods than global demand.

The administration has also highlighted concerns over rapidly expanding manufacturing capacity in certain sectors, including automobiles and advanced manufacturing.

For instance, the probe cited aggressive overseas expansion by Chinese electric vehicle manufacturer BYD despite excess EV production capacity in China. The company has set up factories in countries such as Uzbekistan, Thailand, Brazil, Hungary and Turkey, with further expansion plans in Europe.

Officials also pointed to what they described as imbalanced global production patterns, including high exports from some European economies and large industrial output supported by government policies in parts of Asia.

In addition to the manufacturing investigation, the USTR announced another Section 301 probe aimed at restricting imports of goods allegedly produced using forced labour. The investigation could cover more than 60 countries and potentially expand restrictions similar to those imposed under the Uyghur Forced Labour Protection Act.

The US has previously accused Chinese authorities of forcing members of the Uyghurs and other Muslim minorities into labour camps in the Xinjiang region — allegations that China has repeatedly denied.

Greer said Washington wants its trading partners to adopt enforcement measures similar to US laws that restrict imports linked to forced labour.

The USTR has set April 15 as the deadline for public comments on the excess capacity investigation, with a public hearing expected in early May.

Officials said the goal is to complete the probe and recommend possible tariff measures before temporary tariffs imposed in February expire in July.

The investigation could also reignite tensions in global trade relations, particularly if fresh tariffs are imposed on major economies such as India, China and the European Union.

For India, the development adds another layer of uncertainty to trade ties with Washington as the US administration explores alternative legal routes to revive its tariff strategy following the court ruling.