Tariffs Return Through The Front Door: USTR Launches New Section 301 Probes

On March 11, 2026, the Office of the United States Trade Representative (USTR) initiated new investigations under Section 301 of the Trade Act of 1974 to examine whether the acts, policies, or practices of several major trading partners relating to structural excess capacity and production in manufacturing sectors burden or restrict U.S. commerce. The investigations will examine whether government policies in certain economies promote industrial production capacity untethered from domestic or global demand, resulting in overproduction, persistent trade surpluses, and the displacement of U.S. manufacturing.

USTR identified 16 economies whose policies or practices are subject to these excess capacity investigations: China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India. The U.S. government will consult with each respective economy to discuss negotiated trade solutions. If negotiated solutions are not found, and if USTR determines that the excess capacity practices are unreasonable or discriminatory and burden U.S. commerce, the investigations would likely lead to tariffs or other trade measures affecting imports from these economies.

Background: Structural Excess Capacity in Global Manufacturing

According to USTR, global manufacturing output has continued to expand, yet overall capacity utilization remains below levels generally considered healthy for industrial sectors. These conditions may indicate that global manufacturing capacity has grown beyond underlying demand, creating production surpluses that must be absorbed through exports.

The notice explains that these conditions may arise when government policies sustain or encourage manufacturing capacity that would not otherwise exist under market conditions. Such policies may include subsidies, industrial policies promoting export-oriented production, activities of state-owned enterprises, market access barriers that suppress domestic demand, or other forms of government intervention that enable firms to continue operating or expanding capacity despite weak profitability.

USTR further states that persistent production surpluses in some economies can have broader effects on global trade patterns. Economies with manufacturing sectors that produce significantly more than they consume domestically may rely on exports to sustain industrial output, contributing to sustained trade surpluses in certain sectors and corresponding deficits in others. According to USTR, sectors that may exhibit excess capacity and production include aluminum, automobiles, batteries, cement, chemicals, electronics, energy goods, glass, machine tools, machinery, non-ferrous metals, paper, plastics, processed food and beverages, robotics, satellites, semiconductors, ships, solar modules, steel, and transportation equipment.

The investigations will evaluate whether the acts, policies, or practices of the identified economies contribute to these conditions and, if so, whether they burden or restrict U.S. commerce within the meaning of Section 301.

Initiation of the Investigations

Section 301 of the Trade Act of 1974 authorizes the U.S. Trade Representative to initiate an investigation to determine whether an act, policy, or practice of a foreign country is unreasonable or discriminatory and burdens or restricts U.S. commerce. If USTR makes an affirmative determination, the agency must decide whether action is appropriate and what measures should be taken. Potential remedies may include negotiated agreements, additional tariffs, or other trade restrictions.

Comment Process and Hearing Schedule

USTR is requesting public comments on a range of issues related to the investigations, including:

• Whether the identified policies contribute to structural excess capacity or production
• Whether such policies are unreasonable or discriminatory
• Whether they burden or restrict U.S. commerce
• What trade actions, if any, would be appropriate to address the issue

The Section 301 Committee will accept written comments and conduct public hearings according to the following schedule:

Submissions must be filed through the USTR electronic comments portal.

Broader Trade Policy Context

These investigations arrive at a moment of sharp transition in U.S. tariff policy. Following recent litigation invalidating tariffs imposed under the International Emergency Economic Powers Act (IEEPA), and the administration's subsequent turn to Section 122 of the Trade Act of 1974 for temporary global tariffs, the executive branch has been reassessing the tools available to address perceived trade imbalances and industrial policy concerns.

At the same time, petitioners in the long-running China Section 301 litigation on Feb. 27, 2026 petitioned the U.S. Supreme Court to review the Federal Circuit's decision upholding USTR's authority to expand the original China Section 301 action through Lists 3 and 4A. The petition raises a broader question with significance well beyond that case: whether USTR's authority to "modify" an existing Section 301 action has meaningful limits, or whether it can be used to impose tariffs on a far broader scale without restarting the statutory process. In that setting, these new investigations suggest that Section 301 will remain a central instrument for targeting specific policies, sectors, and trading partners through a more formal, and potentially more durable, tariff process.

In this environment, Section 301 investigations may serve as an additional mechanism for addressing structural issues in global manufacturing, allowing the United States with leverage during trade negotiations, and the ability to target specific policies, sectors, or trading partners through more tailored trade measures.

Implications for Companies

Because these investigations address structural manufacturing capacity across multiple economies and industries, any resulting trade actions could affect a wide range of manufactured products and global supply chains. Companies with exposure to the identified economies should consider monitoring the proceedings closely, evaluating product-and-country-level exposure, and assessing whether participation in the comment process, hearing, or related advocacy efforts may be warranted. In some cases, companies may also wish to conduct supply-chain tracing and scenario planning now, before any tariff measures are announced.

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