The Strategic Pivot from IEEPA to Section 301
On March 11, 2026, a few weeks after the United States Supreme Court canceled emergency tariff authority imposed under the International Emergency Economic Powers Act (IEEPA), the United States Trade Representative, Jamieson Greer, responded by initiating action research on policies and practices based on Section 301 against 16 major partner countries, including six countries from Southeast Asia that have economic and trade cooperation relations with the United States.
This step opens a new level in the strategic transition from a reactive policy to a “Trade Policy Plan B” that targets overproduction in the manufacturing sectors of 16 partner countries. The investigations range from semiconductors to steel, long the leading products of Indo-Pacific countries. Washington’s strategy has successfully re-legitimized tariffs that are difficult to challenge judicially.
Instruments Section 301 is not just about protecting the United States’ domestic economy but also about rebuilding a strong “tariff wall.” For Southeast Asia, this poses an existential threat to the region’s geopolitical stability. Washington is indirectly punishing its trading partners, with whom it previously partnered through the tariff scheme of friend-shoring. This actually creates the risk of cracks, “strategic ambiguity,” and autonomy, which have been the main strengths in maintaining the balance of power in the region.
The “Excess Capacity” Narrative
Washington constructed a new rhetoric, “Structural Excess Capacity,” to justify initiating the investigation. Jamieson Greer argues that state intervention through subsidies, loans, and massive domestic wage cuts for domestic products has led to overproduction, despite global market demand. This rhetoric targets 16 countries, particularly Thailand, Vietnam, Malaysia, Singapore, Cambodia, and Indonesia, that could potentially threaten the United States’ reindustrialization due to their key roles in global supply chains for electronics, steel, and other commodities.
However, this accusation is inaccurate because the data are contradictory. The most prominent example is Singapore, which the USTR has accused of being a country that enjoys a trade surplus with the United States of $27 billion in 2024. From Singapore, through the Ministry of Trade and Industry (MTI), object to the accusations by citing data from the United States Bureau of Economic Analysis (BEA). In contrast, Singapore experienced a trade deficit with the United States of $27 billion in the same year.
The discrepancy between the accusations and the facts suggests a strong internal political motive in Washington. In the run-up to the 2026 US House of Representatives elections, the Trump administration is seeking to demonstrate a tough stance toward foreign trading partners as a show of its “America First” agenda and to gain support in the Rust Belt industrial region.
Section 301, as used by the Trump administration, is more of a political tool to gain sympathy in the election than an objective market-correction tool. In Southeast Asia, Washington’s accusations against Singapore underscore that economics can be sacrificed for the sake of sovereignty on the political stage of a major power.
Southeast Asia in the Crosshairs
Section 301, the policies imposed by Washington, has created the biggest paradox in the United States’ trade architecture in 2026. Over the past decade, Southeast Asia has been a potential region for trade policy friend-shoring. The United States is moving its existing production in China to partner countries deemed geopolitically “safe.” However, the investigation Section 301 Washington’s measures actually targets the most cooperative partners in the de-risking process. For example, Vietnam and Malaysia, which have successfully attracted large investments from U.S. manufacturing, are now considered structural threats by the USTR.
In 2025, Vietnam’s trade surplus with the United States surged to $178.2 billion, up from $158.8 billion in 2024. However, Washington accused this growth of being driven by deliberate overcapacity rather than by organic global market demand. Data from the United States support this. Cement production in Vietnam accounts for nearly 100 percent of domestic demand, raising suspicions that Vietnam has become a transit point for repackaged Chinese products to avoid tariffs.
Meanwhile, Malaysia’s steel and electronics sectors face similar pressures. The manufacturing sector is projected to run a trade surplus in 2024. Bilateral trade in steel, particularly electronics and machinery, valued at $16 billion, is currently under USTR scrutiny. This is due to Malaysia’s steel sector’s production capacity growing by 22 percent from 2018 to 2022, despite a 25 percent decline in domestic demand in 2022. The USTR suspects government policy interference and a potential flooding of the US market.
The investigations into vital sectors (semiconductors and electronics), which are Southeast Asia’s leading exports, have raised concerns that dependence on the US market poses a high risk of political unrest. This suggests that Washington is not only raising costs in global supply chains but also undermining the ideals of economic cooperation it promotes in the Indo-Pacific.
Geopolitical Fallout
One-sided investigation: Section 301 Washington’s actions have created turmoil in global trade. This is because they affect 16 of the United States’ major trading partners, six of whom are major actors in Southeast Asia. ASEAN Outlook on the Indo-Pacific (AOIP) has been a principle. The region’s main objective is to prevent the dominance of a single power and maintain inclusion. Actions targeting several member states through United States domestic law have successfully created divisions in regional solidarity.
In the meeting, ASEAN Economic Ministers voiced concern over “increasing unilateralism” that could shift the legitimacy of the World Trade Organization (WTO) as the epicenter of global trade regulation and control. This weakening of centrality is forcing Southeast Asian countries to reassess the relevance of their traditional hedging strategies to protect national interests from the fluctuations of “America First” policies.
Beijing will see this as an opportunity to strengthen its bargaining position in Southeast Asia. The “China Factor” will no longer be seen as merely an alternative market but will become a key market to be contested when access to the United States market is fraught with unexpected tariff barriers. By 2026, ASEAN member states had expressed interest in BRICS as a pragmatic measure to diversify their finances and maintain stable supply chains, undisturbed by unilateral tariffs and geopolitical sanctions. Washington’s protectionist actions against domestic manufacturing industries actually risk shifting Southeast Asia’s economic appeal to China and its allies.
Toward a More Resilient Strategic Autonomy
In March 2026, the United States’ decisive engagement in Southeast Asia began, following a Section 301 trade investigation. Washington has created a new “tariff wall” that risks fracturing strategic relationships with trading partners in the Indo-Pacific. Instead of punishing partner countries engaging in unfair trade practices, Washington will lose diplomatic legitimacy due to its own domestic political agenda.
ASEAN must strengthen its “strategy of ambiguity” to maintain its maneuverability amid great-power competition. Furthermore, strengthening transparency and synchronization of regional trade data is a key prerequisite for deconstructing the “structural excess capacity” narrative politicized by Washington. The existence of a multilaterally verified database creates a bargaining position for ASEAN in demanding a fair trading system. Ultimately, Southeast Asia’s strategic autonomy depends heavily on the region’s ability to transform its production base into a robust ecosystem resilient to external policy shocks.
