The US Trade Representative’s Office (USTR) dropped its latest bombshell on 11 March, opening a new Section 301 trade investigation against 16 of its most important trade partners.¹ The list includes China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India.

The targets, which range from large advanced markets to two least developed countries (the LDCs of Bangladesh and Cambodia), stand accused by the US of engaging in “acts, policies, and practices” related to structural excess capacity and production in manufacturing sectors.

The US alleges that these 16 are producing more goods than they can consume domestically, which “displaces existing U.S. domestic production or prevents investment and expansion in U.S. manufacturing production that otherwise would have been brought online.”

The Section 301 cases are normally conducted on a statutorily mandated timeline. The US is keeping the schedule this time on a short leash. Stakeholders can submit comments on these charges to USTR from 17 March. Written comments with requests to appear at USTR hearings related to the cases must be sent to USTR by 15 April. USTR will conduct a hearing starting 5 May.

The reason for this unusually rapid inquiry is that the statutory authority for existing US tariffs currently set by the Trump administration at 10% globally under a different legal power, Section 122 of the Trade Act of 1974, will expire on 27 July. The USTR’s goal is to replace these Section 122 tariffs with new measures by July.

The White House has been signaling for weeks, particularly since it lost tariff authority it originally used under the International Emergency Economic Powers Act (IEEPA) when the Supreme Court on 20 February overturned such use of IEEPA, that the Trump administration would be switching to new tools for maintaining its tariff policies. Trade partners were put on notice that something was afoot, with an expectation that new US initiatives would land on them as early as this week.

Despite the warnings, however, it is likely that most partners were still caught off guard by the latest bombshell. Businesses, especially, were unlikely to have known that new investigations would be dropped this quickly.

In an in-depth piece to be published by the Hinrich Foundation on Tuesday, 17 March, I will set out the history and explain at greater length the use and provenance of Section 301, one of the most powerful weapons in the trade policy arsenal for any US executive branch pursuing aggressive unilateralism. For now, it is important to note a few points.

First, unlike many other potential domestic laws or tools available to the US government to manage trade, Section 301 provides a very wide range of options for investigations under the broad category of “relief from unfair trade practices.” The cases just opened come under the heading of “Acts, Policies, and Practices of Certain Economies Relating to Structural Excess Capacity and Production in Manufacturing Sectors.”

To get a flavor of just how broadly USTR is interpreting its mandate, the 16 countries are facing allegations ranging from excess steel production in China, low utilization of chemical facilities in Germany, expansion of industrial capacity in spite of a drop in industrial occupancy rates in Singapore, currency manipulation in Switzerland, permanent oversupply of cement in Indonesia, and measures taken in Cambodia to boost manufacturing as it manages uncertainty over US tariffs.

Second, there are maximum timelines in the Section 301 legal authorities but no minimums. As long as certain procedures are taken, such as an announcement in the US Federal Register, dialogue with affected partners, opening of stakeholder comment periods, and conducting a hearing, the USTR has wide latitude on all other aspects of the process.

Third, Section 301 was originally intended as a tool to get countries to negotiate and remove barriers to US exports. It was only if negotiations failed to result in policy changes that retaliation could take place. This retaliation need not be only about tariffs and there are no maximum limits on the amount or form that retaliation might take. This administration appears keen to retaliate first and discuss mostly later.

Fourth, the majority of the countries under target in this investigation already have at least a “napkin deal” for trade already in place, meaning bilateral trade deals struck with the US after President Trump unilaterally imposed “reciprocal tariffs” worldwide from 2 April last year. Some, such as the ones with Indonesia or Taiwan, were signed as recently as 19 February. It is unclear how these existing trade arrangements will stand alongside the new areas that could be captured under this Section 301 case. US trade partners have already made many difficult and potentially painful domestic concessions in the face of past US demands. New requests are going to be even harder to manage.

Fifth, this Section 301 case, levied against 16 partners, is only the first case filed by USTR in what is expected to be a fusillade of additional cases. USTR Jamieson Greer has already previewed further cases in the pipeline.² This includes a separate action on forced labor which Greer has promised would cover 60 countries and could drop in a matter of days, a case related to pharmaceutical pricing, and one on ocean pollution or a broader environmental rubric. There are also existing and other threatened Section 301 cases that lie ahead on digital trade and digital services taxes.

Sixth, these “investigations” are likely to be rushed affairs, drawing heavily from materials USTR already has available, including its own National Trade Estimate Report on Foreign Trade Barriers (NTE), due for release at the end of the month. Eagle-eyed readers of the Federal Register announcement on this latest Section 301 case have already spotted mathematics and recitations of trade flow data that are not backed up by other data issued elsewhere by the US government.

Finally, Section 301 is not the only trade weapon being used by the US at this time. There are already a range of existing Section 232 cases alleging national security concerns in place, including 50% tariffs in place for US imports of steel, aluminum, and copper; and other varying rates for autos, auto parts, and trucks; and lumber, kitchen cabinets, and upholstered furniture. The Commerce Department, as the lead agency for Section 232, has threatened a much wider set of sectors coming, including on semiconductors, pharmaceuticals, drones, critical minerals, polysilicon, and others. This list is also likely to expand quickly with any tariff remedies applied globally.

Not every trade partner or practice singled out in this Section 301 case will ultimately proceed to retaliate. Some cases will be modified, postponed, or potentially dropped. Unlike other tariff authorities, however, Section 301 is unlikely to get overturned by US Courts or involve Congress. Any penalties that get applied are likely to be long-lasting, particularly since Section 301 empowers the executive branch to modify, adjust, or reopen cases at will in the future.

[“Super and Special: The singular power of US Section 301”, an in-depth study on Section 301 of the Trade Act of 1974, by Deborah Elms, will be published by the Hinrich Foundation on Tuesday, 17 March.]