The Trump administration unveiled two new trade investigations on Wednesday, spanning 60 countries, that could result in more tariffs or other remedies if the US finds fair trade practices were violated.
The investigations — formal probes by government agencies to determine whether certain imports are harming domestic industries or national security — are being initiated under Section 301 of the Trade Act of 1974, which allows the president to levy tariffs against nations that discriminate against US firms or commerce. The probes, run by the US Trade Representative’s office, examine whether the exporting countries employ excess capacity and production in manufacturing sectors and whether other trading partners ban imports of goods made with forced labor, as the US does.
“We expect that this investigation will uncover a variety of unfair trading practices related to excess capacity and production in manufacturing,” US Trade Representative Jamieson Greer told reporters. “The topics that we’re investigating have been concerns for a very, very long time.”
The investigations come after the Supreme Court struck down President Trump’s use of emergency economic powers to impose tariffs. The president has initiated a 10% global tariff — and has vowed to raise it to 15% — under Section 122 that stands for 150 days. Greer intends to wrap up the new investigations before the Section 122 tariffs expire, though he said the president has the option to reissue them.
Read more: 5 ways to tariff-proof your finances
Excess capacity could mean larger persistent trade surpluses, underused or unused capacity, overproduction, or a trade surplus with the US specifically.
Greer said the US believes there are a variety of reasons why some countries have excess capacity, including promoting production that’s not contingent on the supply of a good or resource, as well as subsidies, suppressed worker wages, subsidized lending, or barriers to market access.
Countries subject to the investigation include China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India.
Read more: What Trump’s tariffs mean for the economy and your wallet
“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 said.
Greer would not pre-judge the outcome of the investigation, but pointed to the Section 301 investigation of China during Trump’s first term, where the reprimands were not just tariffs, but also included the Commerce Department working to strengthen export controls and the Treasury bolstering the committee that reviews foreign investments and mergers in US businesses to assess risks to national security.