As anticipated, the Office of the United States Trade Representative (USTR) announced two new investigations under Section 301 of the Trade Act of 1974 this week.
Excess Manufacturing Capacity Investigation
The first investigation examines whether certain countries’ industrial policies are contributing to excess manufacturing capacity, meaning the production of goods beyond global demand, which may allow those goods to be sold at artificially low prices in international markets and harm U.S. manufacturers.
The countries identified in this investigation are China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan and India.
Forced Labor Investigation
The second investigation focuses on whether certain countries have failed to take sufficient action to address forced labor in their supply chains. A total of 60 countries are subject to this investigation.
Notably, every country included in the excess manufacturing capacity investigation is also included in the forced labor investigation. As a result, it is possible that the United States could impose multiple layers of tariffs or trade remedies on some of these countries, depending on the outcomes of the investigations.
Section 122 Tariffs Challenged at the Court of International Trade
Separately, businesses in 24 states have filed a lawsuit in the United States Court of International Trade challenging President Trump’s use of Section 122 of the Trade Act of 1974 to impose a 10% baseline tariff. The case argues that the administration exceeded the statutory authority provided under Section 122 when implementing the measure.
