USTR Opens New Section 301 Investigations Relating to Trade

Article

March 20, 2026

United States Trade Representative (USTR) Jamieson Greer announced a series of trade investigations pursuant to Section 301 of the Trade Act of 1974 (Trade Act). The investigations will address potential instances of excess manufacturing capacity and failure to enforce prohibition on forced labor.

Background

The Trump administration has undertaken new trade actions in the wake of the Supreme Court’s ruling that the tariffs imposed per President Trump’s claimed authority under the International Emergency Economic Powers Act of 1977 (IEEPA) were unconstitutional.

On February 20, 2026, the administration announced temporary tariffs pursuant to Section 122 of the Trade Act. Per the statute, Section 122 tariffs can last a maximum of 150 days. The levies took effect on February 24, 2026, and will expire on July 24, 2026. While 24 states have chosen to challenge the constitutionality of these Section 122 tariffs in the Court of International Trade (CIT), the case is pending and the tariffs currently remain in place, despite ongoing legal challenges in the CIT.

Most recently, the administration opened two trade investigations pursuant to Section 301 of the 1974 Act. The implementation of Section 301 tariffs are seen as a possible permanent replacement for the IEEPA tariffs. Accordingly, the new investigations appear poised to be completed before the Section 122 tariffs’ July expiration date. Section 301 investigations are not novel: both former President Biden and President Trump Section 301 investigations between 2017 and 2024.

Tariffs are a key component of President Trump’s broader economic agenda, and the administration has been open about their intent to continue their use. Greer has signaled additional investigations are likely forthcoming.

Meanwhile, Treasury Secretary Scott Bessent predicted tariffs would quickly return to where they stood before the Supreme Court ruling. “It’s my strong belief that the tariff rates will be back to their old rate within five months,” he said.

Recent Section 301 Investigations Announced

President Trump laid the framework for these investigations in his February 20, 2026, pronouncement following the U.S. Supreme Court’s ruling that the IEEPA tariffs were unconstitutional. The administration stated:

In addition to today’s actions, the President has directed the Office of the States Trade Representative to use its section 301 authority to investigate certain unreasonable and discriminatory acts, policies, and practices that burden or restrict U.S. commerce.

In line with that pronouncement, the USTR has opened two separate trade investigations:

On March 11, 2026, a trade investigation related to certain countries developed excess production capacity in manufacturing sectors; and
On March 12, 2026, a trade investigation related to certain countries’ failure to impose and enforce prohibition on the importation of goods produced with forced labor.

March 11 Trade Investigation: Excess Capacity in Manufacturing

The March 11 investigation targets 16 countries — Bangladesh, Cambodia, China, European Union, India, Indonesia, Japan, Malaysia, Mexico, Norway, Singapore, South Korea, Switzerland, Taiwan, Thailand and Vietnam.

The USTR’s notice of investigation (March 11 USTR Notice) alleges “[k]ey trading partners have developed production capacity untethered from the incentives of domestic and global demand.” It goes on to point out that this excess capacity results in “over production and large or persistent trade surpluses, as well as underutilized and unused capacity, in manufacturing sectors.”

The argument is that the excess production in outside markets results in more goods (i.e., the surplus) being sent to the United States, thereby displacing domestic U.S. production. Even if domestic U.S. production is not displaced, at least the desire for additional investment in U.S. production capabilities is lessened by the surplus.

The March 11 USTR Notice points to such excess global capacity in 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.

In drawing a comparison with other large manufacturing economies, the March 11 USTR Notice points to manufacturing’s contribution as a percentage of GDP, nothing the U.S. is well below other nations:

U.S.: 10.5%
China: 28.1%
German: 22.7%
Japan: 21.7%

The worldwide average for manufacturing is 17.1% of value added to a nation’s GDP.

The USTR has requested consultations with the respective governments of the investigated economies. On March 17, 2026, a docket for comments will be opened. All submissions should be submitted no later than April 15, 2026. An initial hearing on the matter is scheduled to be held on May 5, 2026.

March 12 Trade Investigation: Imported Goods Produced With Forced Labor

Sixty of the United States’ largest trading partners are being investigated pursuant to the investigation announced on March 12. The countries listed included all of those in the March 11 Section 301 trade investigation plus an additional 44 countries — including the United Kingdom, a key ally.

The USTR’s notice of investigation (March 12 USTR Notice) states that despite the majority of trading partners having prohibited forced labor practices by letter of the law “in the absence of forced labor import prohibition that is effectively enforced, firms can continue to source, use, and profit from imported products produced with forced labor, even if the forced labor is prohibited domestically.”

The March 12 USTR Notice states that firms that use forced labor benefit from unnaturally lower costs that allow them to sell such produced goods at a lower price than market labor costs would permit. Citing the International Labor Organization (ILO), it states that in 2024 forced labor accounted for an estimated $63.9 billion of profits in the global private economy. Further ILO data shared provided that in 2021 approximately 28 million people globally are in forced labor (that is 3.5 out of every 1,000 people).

The USTR has requested consultations with the respective governments of the investigated economies. On March 12, 2026, a docket for comments was opened. All submissions should be submitted no later than April 15, 2026. An initial hearing on the matter is scheduled to be held on April 28, 2026.

Next Steps

If the findings of the investigations support action, the expectation is that the U.S. will seek to impose tariffs on certain countries and goods from with negative findings. While Section 301 investigations can take months or years to complete, we expect faster-than-normal findings to be reported, as evidenced by the comment periods and hearing schedules.

Your Guide Forward

Cherry Bekaert’s cross-functional teams of tax, accounting and assurance professionals will continue to monitor the Section 301 investigations and provide updates as developments occur. Please reach out to an advisor with any questions as you navigate potential tariff changes.

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