The Trump administration will investigate dozens of countries in two new probes into partners’ unfair trade practices, a top trade official told reporters Wednesday, which could be used to justify new tariffs.
The first investigation, launched Wednesday afternoon, focuses on manufacturing excess capacity, a catchall term used to describe countries that adopt market-distorting policies to produce more than their domestic populations buy.
The subjects of the investigation will be China, the European Union, Japan, Indonesia, India, South Korea, Vietnam, Mexico, Singapore, Switzerland, Norway, Malaysia, Cambodia, Thailand, Taiwan and Bangladesh, according to a federal register notice.
U.S. Trade Representative Jamieson Greer said during a press call Wednesday that a second investigation, which could be triggered as soon as Thursday, will include around 60 countries and examine trading partners’ efforts to limit imports of products made with forced labor.
The probes will be carried out under Section 301 of the Trade Act of 1974 – which can be used to justify tariffs, import restrictions or other trade measures.
Greer was already signaling, however, that the investigations would likely find evidence of foul play.
“We expect that this investigation will uncover a variety of unfair trading practices related to excess capacity and production in manufacturing,” Greer told reporters. “Our view is that key trading partners have developed production capacity that is really untethered from the market incentives of domestic and global demand.”
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Greer argued that countries have employed multiple tools to build up excess manufacturing capactiy, including subsidies, suppressing domestic wages, the use of state-owned enterprises, sustaining trade barriers, lax environmental and labor protections and currency intervention.
The administration has been scrambling to resurrect tariffs since the Supreme Court struck down a raft of duties imposed under the International Emergency Economic Powers Act last month.
President Donald Trump imposed a 10% global tariff in the days following the ruling using a statute designed to address balance-of-payment issues. But the duties can only stand for 150 days, after which Congress must vote to keep them in place.
Trump and senior officials have signaled that they plan to use other statutes to replicate the IEEPA tariffs, including Section 301 investigations, which have no set limits on tariff size or duration.
Greer said that USTR is hoping to complete these two investigations before the 150 days are up, which could give the president a legal vehicle to impose new tariffs once the current 10% global tariff elapses.
He did not provide any details on whether any forthcoming tariffs that result from the Section 301 investigations would apply on top of existing tariffs.
Further, Greer stressed to reporters on Wednesday that the administration still plans to launch more 301 probes in the future.
He said the first two deal with “systemic issues” affecting the global economy and serve as “a good starting place.”
“We do expect that there will be other Section 301 investigations on a country-specific basis,” Greer added, suggesting that there could be a “handful.”
USTR has previously indicated that it could launch probes into unfair trade practices in global rice and seafood markets, and Greer reiterated that these are still two areas the administration is continuing to look at.
However, Greer said that the administration doesn’t expect to launch in coming weeks any new national security investigations of the sort that led to tariffs on steel, aluminum, timber and vehicles – known as Section 232 investigations. There has been speculation that the Section 232 statute could also serve as a vehicle to raise tariffs.
Unlike the IEEPA tariffs, which were imposed swiftly by proclamation from the White House, the Section 301 investigations offer stakeholders a chance to weigh in on the duties. USTR will accept public comments on the probes. A hearing in the overcapacity investigation is set for early May, according to a forthcoming federal register notice. .
Several of the countries staring down the barrel of these investigations have secured trade pacts with the United States, including the European Union, Indonesia, Japan and South Korea. A recently signed deal with Indonesia, for example, provides a slate of market-opening goodies for U.S. agriculture.
Greer expressed doubt that the investigations would impact those existing deals.
Greer said that he and other USTR officials have spoken to many trading partners over the last few weeks and months and briefed them on the administration’s plans.
“None of this should come as a surprise to any of them,” he said. He added that there would also be space to take into account the deals and countries’ adherence to them before imposing any duties.
“The commitments these countries have made will be considered. Their implementation will be considered, and we'll just have to bump that up against the demands of the 301 process,” he told reporters.
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