US starts ‘unfair trade’ probe against India, 15 others economies

This move by the Trump administration comes as a bid to rebuild tariff pressure after the SCOTUS struck down the centrepiece of its global trade agenda.

The US will launch a trade investigation into alleged unfair manufacturing practices by India and 15 other major economies, the office of the US Trade Representative announced on Wednesday — the latest move by the Trump administration to rebuild tariff pressure after the Supreme Court struck down the centrepiece of its global trade agenda last month.

The MEA has rebuked the US president's claim and said no such conversation took place. between Trump and Modi regarding India's purchase of Russian oil. (REUTERS)

The action, formally known as a Section 301 investigation under the Trade Act of 1974, can give the US government the power to impose new tariffs, restrict imports and suspend trade agreement concessions against economies found to engage in unfair trade practices. The probe will focus on structural excess industrial capacity — where state-supported manufacturing output exceeds domestic demand and floods global markets, displacing American production.

“The investigations will determine whether those acts, policies, and practices are unreasonable or discriminatory and burden or restrict US commerce,” the USTR said in a statement. The 16 economies named are China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan and India. Canada, the second-largest US trading partner, was notably absent from the list.

Trade representative Jamieson Greer framed the investigation as central to restoring America’s industrial base. “The United States will no longer sacrifice its industrial base to other countries that may be exporting their problems with excess capacity and production to us. Today’s investigations underscore President Trump’s commitment to reshore critical supply chains and create good-paying jobs for American workers across our manufacturing sectors,” he said. The US had lost “substantial domestic production capacity” in many sectors or had “fallen worryingly behind foreign competitors,” Greer added.

The investigation comes five weeks after the US Supreme Court on February 20 struck down Trump’s sweeping global tariffs, imposed under the International Emergency Economic Powers Act, as exceeding his statutory authority.

The administration subsequently invoked Section 122 of the Trade Act of 1974 to impose a temporary 10% global tariff, valid for 150 days and set to expire in July. Trump later raised the tariff rate to the statutory limit of 15%.

According to Reuters, Greer said he hoped to conclude the Section 301 investigations — including proposed remedies — before the Section 122 tariffs expire in July, underscoring the urgency behind the swift timeline. The Section 301 probes — legally more robust, having withstood court challenges during Trump’s first term — are widely seen as the administration’s primary vehicle to rebuild a credible and durable tariff threat ahead of that deadline.

Unlike Section 122, Section 301 carries no cap on tariff levels and no time limit, though it requires a formal investigative process including public hearings. It has previously been used most extensively against China — the 25% tariffs on Chinese goods from Trump’s first term were backed by a Section 301 probe — and separate Section 301 investigations targeting China and Brazil are already under way.

Greer said the new probes had been long telegraphed by the administration and should come as no surprise to trading partners. He added that they should stick to their existing deals, though he stopped short of saying compliance would make them immune to all new Section 301 tariffs.

India and the US had been working toward an interim bilateral trade agreement based on a February 6 joint statement, under which Washington had committed to reducing additional tariffs on Indian goods to 18% in exchange for preferential market access.

Those talks were thrown into uncertainty after the Supreme Court ruling, with India’s chief negotiator postponing a scheduled Washington visit and both sides saying they needed time to evaluate the ruling’s implications.

On Thursday, Greer said he would initiate a separate Section 301 investigation targeting goods produced with forced labour, covering more than 60 countries – this investigation and the countries it will target are yet to be named.

The US has already restricted solar panel imports and other goods from China’s Xinjiang region under the Uyghur Forced Labor Protection Act, and the new probe could expand such actions to other countries.

The probes also come as Trump officials led by Treasury Secretary Scott Bessent prepare to meet Chinese counterparts in Paris this week, ahead of an expected Trump-Xi meeting in Beijing at the end of March. The Supreme Court ruling had effectively cut US tariffs on Chinese goods by 10 percentage points, reducing Washington’s leverage — and the Section 301 investigations are in part aimed at restoring it.

The USTR said the excess capacity investigation would open for public comment and consultations next week, with a public hearing scheduled for May 5.