United States Begins Trade Investigation Targeting India, China and Other Economies

The Office of the United States Trade Representative (USTR) has launched a new round of trade investigations under Section 301 of the Trade Act of 1974, targeting the policies and industrial activities of 16 economies, including India and China. The investigation was announced on March 11 and signals increased scrutiny of global trade practices affecting American manufacturing. The move comes after the Supreme Court of the United States struck down broad tariffs introduced earlier by the administration of Donald Trump. Following the court’s ruling, Trump announced a temporary 10 percent tariff on imports from all countries for a period of 150 days starting February 24. Purpose of the Investigation According to the USTR, the investigation aims to identify and address foreign policies and industrial activities that may unfairly harm US manufacturing. The probe covers a wide range of sectors, including steel, aluminium, automobiles, batteries, electronics, chemicals, machinery, semiconductors and solar modules. The investigation is directed at 16 economies, including 15 countries and the 27-member European Union bloc. Countries named in the probe include China, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan and India. Why the Probe Was Initiated After the court invalidated certain tariffs imposed by the Trump administration, the US government sought alternative measures to address concerns about global trade practices. On February 20, President Trump signed a proclamation imposing a temporary 10 percent import duty on goods from all countries. The White House stated that the president had directed the USTR to use Section 301 to investigate policies that may place an unfair burden on US trade and industry. Investigation Process Under Section 301 of the 1974 Trade Act, the US government can examine whether foreign trade practices are unreasonable or discriminatory. According to the think tank Global Trade Research Initiative (GTRI), the probe will assess whether factors such as industrial subsidies, state-supported manufacturing expansion, activities of state-owned enterprises, or currency manipulation have contributed to excess manufacturing capacity globally. If such practices are confirmed, the United States may respond with measures such as additional tariffs or trade restrictions. Written submissions in the investigation process will begin on March 17, and public hearings are scheduled to be held in Washington from May 5 to May 8. Implications for India The GTRI has indicated that the US investigation has identified several sectors in India where production capacity may exceed domestic demand. These sectors include solar modules, petrochemicals, steel, textiles and automotive products. India’s solar module manufacturing capacity, for instance, is reported to be nearly three times higher than domestic demand, suggesting potential export surpluses. However, the Federation of Indian Export Organisations (FIEO) stated that India’s export growth is largely driven by global demand, and there is no immediate cause for concern. The organisation added that the situation will continue to be closely monitored. Laws Used by the US to Impose Tariffs Several US laws allow the government to impose tariffs or trade measures. These include the International Emergency Economic Powers Act (IEEPA) of 1977, which was used by the Trump administration in February 2025 but later struck down by the court. Another law is Section 122 of the Trade Act of 1974, which was used on February 20, 2026, to impose a temporary 10 percent tariff for 150 days, with the possibility of increasing it to 15 percent. The Section 232 of the Trade Expansion Act of 1962 allows tariffs to be imposed on specific sectors such as steel and aluminium on national security grounds. Meanwhile, Section 301 of the Trade Act of 1974 is designed to address unfair foreign trade practices. Under Section 302(b), the USTR can independently initiate investigations into such activities.