The Office of the United States Trade Representative (USTR) announced Wednesday that it is opening investigations into “structural excess capacity and production in manufacturing sectors” across a range of major trading partners. The list includes China, the European Union, Japan, South Korea, India, Mexico, Taiwan and Vietnam, among others.
While the probe is formally framed as an inquiry into industrial overcapacity and trade distortions, it serves a broader purpose: rebuilding the Trump administration’s tariff framework after the Supreme Court invalidated the reciprocal tariffs imposed under the International Emergency Economic Powers Act (IEEPA).
USTR Jamieson Greer made clear that the administration’s policy direction remains unchanged. “The policy remains the same — the tools may change depending on courts and other circumstances,” Greer said during a briefing with reporters.
In practice, the move shifts the legal foundation for tariffs from emergency powers to Section 301 of the Trade Act of 1974, a longstanding trade enforcement provision that authorizes the U.S. government to investigate and retaliate against foreign practices deemed “unreasonable or discriminatory” toward U.S. commerce.
How Section 301 has been used
Section 301 has historically been one of Washington’s most powerful unilateral trade tools. The provision allows the USTR to investigate foreign policies or practices that harm U.S. commerce and, if necessary, impose retaliatory measures such as tariffs or the suspension of trade concessions.
The tool was widely used before the establishment of the World Trade Organization (WTO) in 1995, after which the United States relied more heavily on the WTO’s dispute settlement system to resolve trade conflicts.
In 2017 the administration launched a major investigation into China’s intellectual property and technology transfer policies. That probe ultimately led to tariffs ranging from 7.5 percent to 25 percent on about $370 billion worth of Chinese imports, marking one of the largest trade enforcement actions in modern history.
The new investigation suggests the administration is now prepared to expand the use of Section 301 beyond China to a broader group of major trading partners.
Washington contends that such excess capacity can distort global markets, displace U.S. production and discourage investment in American manufacturing.
The move comes after the U.S. Supreme Court struck down the administration’s reciprocal tariffs imposed under the International Emergency Economic Powers Act, ruling that the emergency powers law did not provide the authority to impose broad trade tariffs.
The Section 301 investigation therefore represents a new legal pathway to maintain tariff leverage using a statute specifically designed for trade enforcement.
The investigation is proceeding on an accelerated timeline. Written comments from stakeholders will be accepted beginning March 17 and must be submitted by April 15. Public hearings are scheduled to begin May 5.
The schedule aligns with another temporary measure currently in place. The United States has imposed a 10 percent global tariff under Section 122 of the Trade Act, which can remain in force for only 150 days. The administration is widely expected to complete the Section 301 process before that deadline in order to establish a more durable legal basis for tariffs.
If the investigation concludes that foreign practices are harming U.S. commerce, Washington could impose tariffs, introduce service-related fees or pursue negotiations aimed at changing those policies.
In the Federal Register notice accompanying the investigation, the USTR identifies South Korea as an economy with significant export strength in several key industries. The filing notes that Korea’s global trade surplus is concentrated in sectors such as electronic equipment, automobiles and auto parts, machinery, steel, and ships and marine vessels.
The notice also highlights Korea’s trade relationship with the United States, citing a large bilateral surplus in goods and services in recent years.
U.S. officials argue that such patterns may reflect structural overcapacity that distorts global markets and undermines investment in domestic manufacturing.
By framing the issue in terms of industrial capacity rather than simple trade imbalances, Washington is positioning the probe within a broader strategy aimed at reshaping supply chains and strengthening domestic production.
Although the current investigation focuses on manufacturing overcapacity, USTR officials have suggested that additional Section 301 probes could address other issues affecting U.S. companies abroad.
These may include digital service taxes, pharmaceutical pricing policies, and market access barriers affecting agriculture or seafood imports.
Corporate disputes could also surface in broader trade discussions. The regulatory scrutiny faced by U.S.-listed e-commerce firm Coupang in South Korea, for example, has drawn attention among U.S. policymakers and illustrates how commercial issues can intersect with trade diplomacy.
For South Korea, the investigation introduces several strategic challenges. Section 301 gives Washington broad discretion in determining what constitutes unfair trade practices. Unlike cases handled through the WTO system, the findings are determined largely by U.S. authorities.
The investigation also places Korea within a wider group of export-driven economies that Washington believes contribute to global manufacturing overcapacity. Finally, the probe raises questions about the stability of existing trade frameworks. While U.S. officials say current bilateral trade arrangements remain valid, Section 301 actions could still result in new tariffs or other restrictions.
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