The Trump administration has launched the first of what is expected to be a number of new investigations laying the groundwork for additional import tariffs to effectively replace those overturned last month by the Supreme Court.
The Office of the U.S. Trade Representative initiated March 11 new Section 301 investigations of the acts, policies, and practices of the following trading partners relating to structural excess capacity and production in manufacturing sectors: Bangladesh, Cambodia, China, the European Union, India Indonesia, Japan, Malaysia, Mexico, Norway, Singapore, South Korea, Switzerland, Taiwan, Thailand, and Vietnam.
“Across numerous sectors, many U.S. trading partners are producing more goods than they can consume domestically,” USTR Jamieson Greer explained. “This overproduction displaces existing U.S. domestic production or prevents investment and expansion in U.S. manufacturing production that otherwise would have been brought online. In many sectors, the United States has lost substantial domestic production capacity or has fallen worryingly behind foreign competitors.”
USTR cites the following sectors as among those affected: 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.
However, a USTR notice announcing the new investigations appears to rely primarily on the “large or persistent trade surpluses” these trading partners run with the U.S. as evidence of their “structural excess capacity and production in various manufacturing sectors.” USTR also argues that while global manufacturing capacity utilization remains between 75.0 and 75.9 percent, below the “healthy” rate of about 80 percent, these low rates can actually “be evidence of structural excess capacity in those sectors.”
USTR states that it will accept public comments on these investigations between March 17 and April 15 and hold a hearing starting May 5. USTR Greer said he hopes to conclude the investigations before Section 122 tariffs expire July 24.
These investigations, like those conducted by the first Trump administration against China, could result in the imposition of additional tariffs or other measures against imports from some or all of the affected trading partners. However, Greer appeared to leave open the possibility that affected economies may be able to negotiate with the U.S. over the nature and intensity of any such measures, depending on factors including their implementation of commitments under the trade agreements or frameworks many of them have concluded in recent months with the U.S.
Greer also reportedly said he expects to soon announce additional Section 301 investigations focusing on forced labor practices in dozens of countries.
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