U.S. Launches Trade Probes Targeting Excess Capacity, India Among Countries Under Review

The United States has launched new trade investigations into unfair trade practices, including those involving excess industrial capacity, in 16 countries, including India.

The investigations were announced by U.S. Trade Representative Jamieson Greer, who said the probe under Section 301 of the Trade Act of 1974 will examine whether structural excess production in certain countries is affecting global trade dynamics. According to Reuters, the review could lead to new tariffs by the summer if unfair trade practices are identified.

The investigation is part of the administration’s effort to rebuild tariff-based trade pressure after the U.S. Supreme Court struck down significant portions of earlier tariff measures in February.

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Countries Included In Excess Capacity Probe

The probe into excess industrial capacity covers 16 trading partners, including India, China, the European Union, Japan, South Korea and Mexico.

Other economies under review include Taiwan, Vietnam, Thailand, Malaysia, Cambodia, Singapore, Indonesia, Bangladesh, Switzerland and Norway.

According to the Office of the United States Trade Representative, the investigation will focus on economies that appear to demonstrate structural excess production capacity in manufacturing sectors.

The regulator’s notice cited examples such as the automotive sector in China and Japan, where manufacturing capacity and production levels are considered higher than market demand in some segments.

The investigation will examine factors such as persistent trade surpluses, underutilised production capacity, government subsidies, state-owned enterprise activity and lending practices that could influence global trade competitiveness.

Separate Investigation On Forced Labour Imports

In addition to the excess capacity probe, the U.S. government will also launch another investigation into imports allegedly produced using forced labour.

The investigation, also conducted under Section 301 of the Trade Act of 1974, is expected to cover goods from more than 60 countries.

The U.S. has previously restricted imports linked to forced labour under the Uyghur Forced Labor Protection Act, which placed limits on certain products originating from Xinjiang in China.

Officials said the new probe could examine whether similar measures should be expanded to cover imports from other countries if forced labour practices are identified.

Timeline For Investigation And Potential Tariffs

According to the U.S. Trade Representative’s office, public comments on the excess capacity investigation will be accepted until April 15. A public hearing related to the probe is scheduled for around May 5.

The administration aims to conclude the investigation and determine potential remedies before the temporary tariffs imposed earlier this year expire in July.

Those temporary tariffs were introduced after the U.S. Supreme Court struck down earlier tariff measures under emergency economic powers legislation in February.

The investigations are expected to provide the U.S. government with a legal framework to impose additional tariffs if unfair trade practices are established during the review process.

Officials said the findings from the probes will determine whether further trade measures are required to address concerns related to global manufacturing capacity and labour standards.