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TWN
Info Service on WTO and Trade Issues (Mar26/13) Geneva, 13 Mar (D. Ravi Kanth) — The United States on 11 March reportedly initiated investigations into the acts, policies, and practices of 16 countries under Section 301(b) of the US Trade Act of 1974, citing structural excess capacity and overproduction in manufacturing sectors. The move appears to be preparing the ground for testing the resolve of the targeted countries to implement the 15 percent tariff unilaterally imposed under Section 122 of the Trade Act last month, according to people familiar with the development. The Section 122 tariff of 15 percent was imposed immediately after the Trump administration suffered a major defeat over its unilateral reciprocal tariffs at the US Supreme Court. Shortly thereafter, Washington announced the Section 122 tariff on 26 February. That tariff must be terminated after 150 days, i.e., by 26 July. Against this backdrop, the US Trade Representative (USTR), Ambassador Jamieson Greer, cited nearly the same rationale the administration used on 2 April of last year, when it imposed unilateral reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA) – a measure later struck down by the US Supreme Court. The countries subjected to the Section 301 investigations are China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India. In a press release, Ambassador Greer stated: “The United States will no longer sacrifice its industrial base to other countries that may be exporting their problems with excess capacity and production to us.” Justifying the investigations, Ambassador Greer added: “Today’s investigations underscore President Trump’s commitment to reshore critical supply chains and create good-paying jobs for American workers across our manufacturing sectors.” The USTR elaborated: “The Trump Administration’s re-industrialization efforts continue to face significant challenges due to foreign economies’ structural excess capacity and production in manufacturing sectors. Across numerous sectors, many US trading partners are producing more goods than they can consume domestically.” According to the USTR: “This overproduction displaces existing US domestic production or prevents investment and expansion in US 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.” In the Federal Register notice, the USTR justified the probe by citing legal authority: “Section 302(b)(1)(A) of the Trade Act of 1974, as amended (Trade Act), authorizes the Trade Representative to initiate an investigation to determine whether an act, policy, or practice of a foreign country is actionable under section 301 of the Trade Act. Actionable matters under section 301 include acts, policies, and practices of a foreign country that are unreasonable or discriminatory and burden or restrict US commerce.” The notice further clarifies that “an act, policy, or practice is unreasonable if, while not necessarily in violation of, or inconsistent with, the international legal rights of the United States, it is otherwise unfair and inequitable.” It also states: “On March 11, 2026, the Trade Representative initiated section 301 investigations of the acts, policies, and practices of certain economies relating to structural excess capacity or production in certain manufacturing sectors.” In particular, the USTR has asked its advisory committees and other bodies to comment on the following questions: * The acts, policies, and practices of each investigated economy creating or maintaining structural excess capacity or production in specific sectors. * Whether the acts, policies, and practices are unreasonable or discriminatory. * Whether the acts, policies, and practices burden or restrict US commerce, and if so, the nature and level of the burden or restriction. This would include economic assessments of the burden or restriction. * Whether the acts, policies, and practices are actionable under section 301(b) of the Trade Act, and what action, if any, should be taken, including tariff and non-tariff actions. * Whether there are additional considerations for assessing acts, policies, and practices that contribute to structural excess capacity or production in manufacturing sectors. The USTR has requested responses to the above questions by 15 April 2026. WTO DISPUTE To recall, in a trade dispute (DS152) launched by the EU at the WTO against the imposition and legal status of Section 301, a dispute panel concluded: “The Panel found that Sections 304(a)(2)(A), 305(a) and 306(b) of the US Trade Act of 1974 were not inconsistent with Article 23.2(a) or ( c) of the DSU or with any of the GATT 1994 provisions cited.” Furthermore, “the panel noted that its findings were based in full or in part on US undertakings articulated in the Statement of Administrative Action approved by the US Congress at the time it implemented the Uruguay Round agreements and confirmed in the statements by the US to the panel.” However, the panel stated rather unambiguously that “should those undertakings be repudiated or in any other way removed, its findings of conformity would no longer be warranted.” The Dispute Settlement Body adopted the panel report at its meeting on 27 January 2000. +
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