USTR initiates Section 301 investigations of 16 US trade partners targeting industrial excess capacity

On March 11, 2026, the Office of the United States Trade Representative (USTR) initiated investigations under Section 301 of the Trade Act of 1974 into “structural excess capacity or production in certain manufacturing sectors” of China, the European Union (EU), Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India.¹ USTR alleges that these economies “are producing more goods than they can consume domestically,” which “displaces existing US domestic production or prevents investment and expansion in US manufacturing[.]” The investigations are intended to determine whether those acts, policies, and practices are “unreasonable or discriminatory” and “burden or restrict US commerce.” Affirmative determinations would allow President Trump to impose tariffs and other trade restrictions on imports, or to enter into negotiations with the relevant government.

Target economies and focus of the investigations

The initiation notice identifies 16 US trade partners as targets of the investigations: China, the European Union (EU), Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India. USTR is making a variety of allegations against these economies, including excess steel production in China, low utilization of chemical facilities in Germany, expansion of industrial capacity despite declining occupancy rates in Singapore, currency manipulation in Switzerland, persistent cement oversupply in Indonesia, measures by Cambodia to boost manufacturing amid uncertainty over US tariffs, below-60% manufacturing capacity utilization in Thailand, and continued operation of unprofitable firms propped up by non-market forces in Japan.

The initiation notice also names specific sectors that USTR believes are experiencing overcapacity, listing aluminum, automobiles, batteries, cement, chemicals, electronics, energy goods, glass, machine tools, machinery, non-ferrous metals, paper, plastics, processed food and beverages, robotics, satellites, semiconductors, ships, solar modules, steel, and transportation equipment.

Timeline for the investigations

The initiation notice provides a timeline for the initial steps of the investigations:

• March 11, 2026: Investigations initiated.
• March 17, 2026: Public docket opens for submission of written comments and requests to appear at the hearings.
• April 15, 2026 (11:59 p.m. EST): Deadline for written comments and requests to appear at the hearings.
• May 5–8, 2026: Public hearings held in Washington, DC.
• Seven calendar days after the last day of the public hearing: Deadline for submission of post-hearing rebuttal comments.
• Dates to be determined: Issuance of the investigation determinations and proposals for remedial action, which may include an additional opportunity for public feedback.
• July 24, 2026 (unofficial): Target date for completion of the investigations and remedy determinations, according to USTR and President Trump.

USTR has stated that it intends to conduct these investigations on an expedited basis, aiming to complete the process and be prepared to impose tariffs by around July 24, 2026. However, the initiation notice does not mention any specific actions USTR is taking to expedite its procedures. USTR has not invoked provisions under Section 301 that would permit it to proceed with the investigation without first holding the standard public consultation and advisory committee meetings.

Opportunity for public engagement

As part of the investigations, USTR is soliciting public comments and will hold public hearings. The docket for receiving comments and requests to appear at the hearing will be open from March 17 to April 15, 2026, via the USTR Comments Portal.² The initiation notice provides further details on how to submit comments and participate in the hearings.

About Section 301

Section 301 of the Trade Act of 1974 (19 USC. §§ 2411–2420) authorizes USTR, under the president’s direction, to address foreign government conduct that (1) denies US rights under a trade agreement, (2) constitutes “unjustifiable” action that “burdens or restricts” US commerce, or (3) constitutes “unreasonable” or “discriminatory” action that “burdens or restricts” US “commerce” (defined to include goods, services, and investment). 

Section 301 investigations are categorized as either “mandatory” or “discretionary,” depending on the nature of the alleged foreign conduct. Action is “discretionary” where the act, policy, or practice is “unreasonable or discriminatory” and “burdens or restricts” US commerce. USTR will carry out the new industrial excess capacity investigations under the discretionary provision, Section 301(b). The statutory time limit for a discretionary investigation is 12 months.

The statute authorizes USTR to (1) impose duties or other import restrictions, (2) withdraw or suspend trade agreement concessions, or (3) enter into a binding agreement with the foreign government to either eliminate the conduct in question (or the burden to US commerce) or compensate the United States with satisfactory trade benefits. If USTR decides to take the remedial actions authorized by Section 301 after concluding an investigation, it typically holds additional notice and comment periods to receive input on the specific remedies proposed. Upon making an affirmative determination to take remedial action, USTR must implement that action within 30 days, although there are options to extend this timeline.

Replacing IEEPA tariffs with Section 122 and Section 301 tariffs

In advance of the recent announcement, President Trump³ and USTR⁴ described the Section 301 investigations as part of a broader plan to replace the tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA). The Trump administration was required to rescind the IEEPA tariffs on February 24, 2026, after the Supreme Court ruled that IEEPA does not grant the president authority to impose tariffs. In response, President Trump announced that he would immediately reconstruct the tariffs using alternative legal authorities:

• Section 122 tariff: President Trump imposed a temporary 10% global tariff on imports from all countries under Section 122 of the Trade Act of 1974 as a short-term measure on January 24, 2026.⁵ Section 122 tariffs can be implemented quickly but are limited to a maximum duration of 150 days and a maximum rate of 15%.
• Section 301 investigations: President Trump directed USTR to initiate new Section 301 investigations targeting US trade partners, which would provide a legal basis for longer-term tariffs. Unlike Section 122, Section 301 tariffs are not subject to the same practical time or rate limitations.

This two-stage approach allows for rapid implementation of tariffs under Section 122 while using the 150-day window to develop and implement Section 301 tariffs as more durable trade measures.

The new Section 301 investigations

The current Section 301 investigation into industrial excess capacity marks the first in a series of anticipated cases. USTR has stated that these investigations will proceed on an “accelerated timeframe,” covering most major trade partners and addressing a broad array of issues, including “industrial excess capacity, forced labor, pharmaceutical pricing practices, discrimination against US technology companies and digital goods and services, digital services taxes, ocean pollution, and practices related to the trade in seafood, rice, and other products.”

Forthcoming announcement of forced labor-related Section 301 investigations

USTR also intends to announce Section 301 investigations targeting forced labor policies this week, which would cover approximately 60 trading partners. According to Ambassador Jamieson Greer, the investigations will examine whether these economies “have implemented external-facing laws to prohibit the import of goods made with forced labor.” While specific details for this second investigation are not yet available, it is anticipated that the process will closely follow that of the industrial excess capacity investigation.

Authors: Ian Saccomanno, Samuel Scoles

^{1 Press release: “USTR Initiates Section 301 Investigations Relating to Structural Excess Capacity and Production in Manufacturing Sectors,” USTR, March 11, 2026; and Notice of initiation of investigations and hearings, and a request for comments: “Initiation of Section 301 Investigations: Acts, Policies, and Practices of Certain Economies Relating to Structural Excess Capacity and Production in Manufacturing Sectors,” advance copy of the Federal Register Notice.
2 USTR Comments Portal.
3 Truth Social post of February 20, 2026 by President Trump.
4 Press Release: “Ambassador Greer Issues Statement on Supreme Court IEEPA Decision,” USTR, February 20, 2026.
5 Presidential Proclamation 11012 of February 20, 2026: “Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems,” 91 FR 9339; and CSMS # 67844987 - Imposing Temporary Section 122 Duties, February 23, 2026.}

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