The U.S. administration launched a new trade investigation into excess industrial capacity among 16 major trading partners. This comes after the Supreme Court struck down President Donald Trump’s previous use of tariffs by declaring an economic emergency.
The official announcement made by U.S. Trade Representative Jamieson Greer, the administration will begin investigations under Section 301 of the Trade Act of 1974, which could eventually lead to new import taxes. Countries affected by this include India, China, the European Union, Mexico, India, Japan, South Korea and Taiwan. Switzerland, Norway, Indonesia, Singapore, Thailand, Malaysia, Cambodia, Vietnam and Bangladesh will also be investigated by the Trump administration.
“Our view is that key trading partners have developed production capacity that is really untethered from the market incentives of domestic and global demand,” Greer was quoted by Bloomberg.
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“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. 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,” said in the official system.
“The Trump Administration’s reindustrialization efforts continue to face significant challenges due to foreign economies’ structural excess capacity and production in manufacturing sectors. Across numerous sectors, many U.S. trading partners are producing more goods than they can consume domestically. 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,” he added further.
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Greer told reporters in a conference call that the investigations will focus “on economies that we have evidence 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 said that the probe will examine evidence such as large current account surpluses, government subsidies, suppressed domestic wages, noncommercial activities of state-owned enterprises, inadequate environmental and labor standards, subsidized lending and currency practices.
This comes shortly after the U.S. Supreme Court ruled that Trump’s global tariffs imposed under a national emergencies law were illegal. Following the ruling, Trump imposed a temporary 10% tariff for 150 days under Section 122 of the Trade Act of 1974.
Greer said he hopes to conclude the Section 301 investigations, including proposed remedies, before these temporary tariffs expire in July. The probe will move quickly, with public comments accepted until April 15 and a hearing scheduled around May 5.