The administration of Donald Trump is reopening its global trade offensive by launching sweeping investigations into unfair trade practices and forced labor, in a move widely seen as an attempt to rebuild tariff pressure after a major legal setback.
Last month, the Supreme Court of the United States struck down much of Trump’s sweeping tariff regime that had been imposed under emergency powers. The ruling forced Washington to seek alternative legal pathways if it wanted to continue using tariffs as leverage in trade negotiations.
The new investigations rely on Section 301 of the Trade Act of 1974, a long-standing legal tool that allows the U.S. government to impose tariffs or other penalties on countries deemed to be engaging in unfair trade practices.
According to Jamieson Greer, the probes could lead to new tariffs by this summer against several of the world’s largest economies.
Countries in the Crosshairs
The first investigation targets excess industrial capacity in global manufacturing, which U.S. officials argue distorts markets and undermines American producers.
Sixteen major trading partners are under scrutiny, including:
- China
- European Union
- India
- Japan
- South Korea
- Mexico
Other economies named in the probe include Taiwan, Vietnam, Thailand, Malaysia, Cambodia, Singapore, Indonesia, Bangladesh, Switzerland and Norway.
Notably absent from the list is Canada, the second-largest U.S. trading partner.
U.S. officials say they will examine whether countries maintain large trade surpluses or maintain underused industrial capacity that could flood global markets with cheap exports.
China Rejects “Overcapacity” Accusations
Beijing quickly rejected the U.S. allegations, calling them politically motivated.
China’s foreign ministry dismissed Washington’s claim that Chinese industries suffer from overcapacity, labeling it a “false proposition” and accusing the United States of using tariffs as a political weapon.
The dispute is particularly sharp in sectors such as electric vehicles. The U.S. argues that China’s massive EV production capacity exceeds domestic demand and could overwhelm global markets.
China’s largest EV maker, BYD, has aggressively expanded manufacturing abroad with plants in countries such as Brazil, Hungary, Turkey, Thailand and Uzbekistan.
U.S. officials argue that such expansion risks exporting industrial overcapacity into foreign markets, particularly Europe.
Forced Labor Investigation Expands
Alongside the excess-capacity probe, Washington plans a second investigation focused on goods produced with forced labor.
The probe could affect imports from more than 60 countries, expanding enforcement of existing restrictions such as the Uyghur Forced Labor Protection Act.
That law, signed by former U.S. President Joe Biden, already bans imports linked to alleged forced labor involving Uyghur minorities in China’s Xinjiang region.
Beijing strongly denies accusations that it runs forced labor camps in the region.
If the new investigation leads to additional restrictions, it could broaden trade penalties beyond China to other countries suspected of using forced labor in export industries.
Race Against a July Deadline
The investigations come with a tight timeline.
Temporary tariffs imposed by Trump in February under Section 122 of the Trade Act are scheduled to expire in July. Officials hope to complete the Section 301 investigations before then in order to justify new tariff measures.
Public comments on the excess-capacity probe will be accepted until mid-April, with a hearing expected in early May.
Analysis: Trade War Pressure Returns
The new investigations signal that the Trump administration remains committed to using tariffs as a central tool of economic diplomacy.
After the Supreme Court ruling weakened Washington’s tariff leverage, the Section 301 probes provide a new legal framework for reimposing trade pressure.
The move also comes at a sensitive diplomatic moment. U.S. officials are preparing for talks with Chinese counterparts ahead of a potential meeting between Trump and Chinese President Xi Jinping later this month.
By reopening the possibility of sweeping tariffs, Washington appears to be restoring negotiating leverage in those discussions.
However, the strategy carries risks. New tariffs targeting multiple major economies could reignite global trade tensions at a time when markets are already unsettled by the widening Middle East conflict and volatile energy prices.
For global trade, the message from Washington is clear: even after a legal setback, the era of aggressive tariff diplomacy is far from over.
With information from Reuters.
