5 minutes of readingUpdated: Mar 12, 2026 10:11 am IST
US President Donald Trump’s administration said on Wednesday it was launching two new trade investigations into industrial overcapacity in 16 major trading partners and into forced labor, to rebuild tariff pressure after the US Supreme Court struck down much of Trump’s tariff program last month.
U.S. Trade Representative Jamieson Greer said the “Section 301” investigation into unfair trade practices could lead to the imposition of new tariffs against China, the European Union, India, Japan, South Korea and Mexico this summer.
Other trading partners subject to the overcapacity investigation include Taiwan, Vietnam, Thailand, Malaysia, Cambodia, Singapore, Indonesia, Bangladesh, Switzerland and Norway. Canada, the United States’ second largest trading partner, was not named as a target of the investigation.
“Therefore, these investigations will focus on economies for which we have evidence that appear to exhibit structural excess capacity and production in various manufacturing sectors, such as through larger persistent trade surpluses or underutilized or unused capacity,” Greer told reporters on a conference call. The USTR’s official notice on the overcapacity investigation cited the auto sector in China and Japan, saying a growing number of companies were unprofitable or unable to meet interest payments from operations. He said that even though China’s EV capacity exceeds domestic demand, the country’s leading EV maker, BYD, was “aggressively expanding” its manufacturing footprint overseas, with factories in Uzbekistan, Thailand, Brazil, Hungary and Turkey and was expected to expand capacity in Europe, where existing auto plants are operating at just 55% of capacity.
The USTR cited large US trade surpluses in Germany and Ireland as evidence of EU overcapacity. Singapore had global excess capacity in semiconductors despite a trade deficit with the United States and Norway had excess capacity due to large exports of fuel and seafood, he added.
FORCED LABOR INVESTIGATION
Greer also said he would launch another investigation Thursday under Section 301 of the Trade Act of 1974 to ban U.S. imports of goods produced with forced labor. That research covers more than 60 countries. The United States has already cracked down on imports of solar panels and other products from China’s Xinjiang region under the Uyghur Forced Labor Protection Act signed into law by former President Joe Biden, and the investigation could expand such actions to other countries.
Greer said he wanted other countries to enforce bans on goods produced with forced labor similar to those enshrined in a nearly century-old trade law.
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The United States alleges that Chinese authorities have set up labor camps for ethnic Uyghurs and other Muslim groups in the western region, although Beijing denies allegations of abuse.
Greer said he hoped to conclude Section 301 investigations, including proposed remedies, before new temporary tariffs imposed by Trump in late February expire in July. After the Supreme Court struck down Trump’s global tariffs as illegal under a national emergency law on February 20, it imposed a 10% tariff for 150 days under Section 122 of the Trade Act of 1974.
It set an expedited timeline for the overcapacity investigation, with public comments accepted through April 15 and a public hearing scheduled for approximately May 5.
The investigations offer the Trump administration a path to reconstruct a credible tariff threat against its trading partners to keep them negotiating and implement trade agreements that were cut to reduce their highest tariff rates under the International Emergency Economic Powers Act.
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Greer said the new investigations, long telegraphed by administration officials, should not surprise trading partners, and that they should honor their agreements, though he stopped short of saying this would make them immune to all new Section 301 tariffs.
He said Trump was determined to impose tariffs and “will find a way to deal with unfair trade practices. He will find a way to reduce our trade deficit. He will find a way to protect American manufacturing. We have many tools to do that,” Greer said.
The investigations come as Trump officials led by US Treasury Secretary Scott Bessent prepare this week to meet with their Chinese counterparts in Paris to set the stage for Trump to meet Chinese President Xi Jinping in Beijing in late March.
Trump’s tariffs on Chinese goods were effectively reduced by 10 percentage points through the Supreme Court decision and subsequent temporary tariffs, reducing US influence over China’s trade and export controls.
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During his first term, Trump used a Section 301 investigation to support his tariffs on many Chinese imports of around 25% and the law is widely considered legally sound, having withstood previous court challenges.
The investigation into overcapacity focuses on an area of concern raised to China by successive administrations from Trump’s first term to the Biden administration: growing state-backed manufacturing output that is flooding the world with cheap goods.
Greer said this includes production “untethered” to market demand and that the problem has spread to other countries. He said the investigation will focus on evidence including large global current account surpluses, government subsidies, reduced domestic wages, non-trading activities of state-owned enterprises, inadequate environmental and labor standards, subsidized loans and monetary practices.
