U.S.LaunchesSweepingTradeProbesIntoChina,EUandOtherMajorEconomies

The Trump administration launched sweeping trade investigations into China, the European Union, Mexico and more than a dozen other economies on March 11, deploying a new legal strategy to impose tariffs after the Supreme Court struck down its previous border levies.

U.S. Trade Representative Jamieson Greer announced during a press teleconference same day that the U.S. will launch trade investigations under Section 301 of the Trade Act of 1974 into its trading partners including China, Mexico, the European Union, Japan, India, Vietnam, South Korea, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Bangladesh, Thailand and China's Taiwan region. New tariffs that the U.S. may implement following the investigations will replace the reciprocal tariffs that were ruled illegal by the U.S. Supreme Court in February.

Greer indicated that the current Section 301 investigations are expected to expand to more U.S. trading partners in the future.

The so-called Section 301 of the Trade Act of 1974 is the same legal tool that President Donald Trump utilized when he sparked the U.S.-China trade friction in 2018.

Section 301 authorizes the U.S. trade representative to levy tariffs — with no rate cap — against other countries for trade measures that discriminate against U.S. companies or violate international trade agreements. Section 301 tariffs automatically expire four years after taking effect, but extensions can be requested.

The process for rolling out Section 301 tariffs is relatively complex: It must begin with an investigation by the U.S. trade representative, followed by solicitations for U.S. public comment and potential public hearings. It also typically requires the U.S. to conduct consultations with foreign governments.

Greer said that Trump’s trade policy remains unchanged, and its objective is to protect U.S. jobs and ensure fair trade between the U.S. and its trading partners.

Regarding the scope of this round of Section 301 investigations, Greer stated it will cover “acts, policies and practices involving structural overcapacity in the manufacturing sectors of certain economies.”

He added that the U.S. is expected to launch Section 301 investigations against other countries or deploy alternative trade tools and investigation methods in the future.

Under the provisions of Section 301, the Office of the U.S. Trade Representative must seek public comment and hold public hearings regarding the investigations. Greer confirmed that the U.S. will hold consultations with trading partners affected by the probe.

As for what actions the Trump administration might take based on the findings, Greer said that after completing all procedures, the USTR will publish the investigation results and analysis, proposing various countermeasures if necessary, such as imposing additional tariffs or charging fees on specific services.

Navigating legal hurdles

Just weeks ago on Feb. 20, the U.S. Supreme Court delivered one of the most consequential rulings since Trump took office for his second term — ruling that Trump lacked the authority to levy so-called global reciprocal tariffs and fentanyl tariffs against China, Canada and Mexico under the International Emergency Economic Powers Act, or IEEPA. Those IEEPA tariffs subsequently became invalid, but tariffs on industries like autos, steel and aluminum that Trump imposed under other trade laws remain unaffected.

While expressing dissatisfaction with the Supreme Court’s decision, Trump quickly rolled out alternatives that had long been prepared.

He announced that he will invoke Section 122 of the Trade Act of 1974 to implement a universal 10% global tariff, and launch investigations addressing unfair trade practices under Section 301 and other trade laws as a prerequisite for the U.S. to levy new tariffs.

In early March, U.S. Treasury Secretary Scott Bessent predicted that by August of this year, U.S. tariff levels will bounce back to where they were before the Supreme Court struck down the reciprocal tariffs.

Bessent projected that over the coming months, the USTR and the U.S. Commerce Department will complete the necessary research and preparation to enable the Trump administration to issue further tariff measures.

He explicitly stated that the Trump administration’s workaround strategy is to use the Section 122 tariff as a transition, taking the next five months to use Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974 as the legal basis to build a tariff framework that can better “survive legal challenges.”

Contact editor Lu Zhenhua (zhenhualu@caixin.com)