Trade Alert: U.S. Launches Section 301 Investigations Into Global Manufacturing Overcapacity

The United States Trade Representative (USTR) has announced the initiation of new investigations under Section 301 of the Trade Act of 1974 targeting structural excess capacity and production in global manufacturing sectors.

The investigations will examine whether the policies and practices of several major trading partners are unfairly contributing to overproduction that burdens or restricts U.S. commerce.

The economies subject to investigation include China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India.

According to USTR, many of these economies are producing more goods than they can consume domestically. The concern is that excess production is being exported to the United States at levels that may undermine domestic manufacturing capacity or discourage investment in U.S. industry.

What Is a Section 301 Investigation?

Section 301 of the Trade Act of 1974 allows the United States to investigate and respond to foreign government actions that are considered unreasonable, discriminatory, or harmful to U.S. commerce.

If USTR determines that foreign practices violate these standards, the United States can impose trade remedies. These measures can include tariffs, quotas, or other restrictions designed to offset the impact of the foreign policies.

Many companies are familiar with Section 301 because it was the legal authority used to impose tariffs on hundreds of billions of dollars of imports from China beginning in 2018.

What Happens Next?

The investigation process includes several steps before any action is taken.

USTR has requested consultations with the governments involved. A public comment docket will open on March 17, 2026, allowing companies and industry groups to submit feedback. Written comments and requests to testify must be submitted by April 15, 2026. Public hearings related to the investigations are scheduled to begin on May 5, 2026.

Following the review process, USTR may determine that trade remedies are necessary.

What This Could Mean for Importers and Exporters

Although no tariffs have been announced, investigations like these often lead to new trade restrictions. If tariffs are implemented, companies importing goods from the economies under review could face increased duty costs.

For companies that both import and export goods, these developments may also create opportunities to recover duties through duty drawback.

Duty drawback allows eligible companies to recover up to 99 percent of duties paid on imported goods that are later exported or destroyed. When new tariffs are introduced, many companies discover that duty drawback can significantly reduce the financial impact of those duties.

Preparing for Potential Tariff Changes

While the investigation process is still in its early stages, companies should begin evaluating potential exposure now. Importers should review supply chains, product classifications, and sourcing strategies to understand how potential tariffs could affect operations.

Businesses that export products incorporating imported materials should also assess whether they may qualify for duty drawback refunds.

J.M. Rodgers has more than 70 years of experience helping companies navigate changing trade policies. Our duty drawback specialists help businesses identify opportunities to recover duties and manage the financial impact of tariffs.

As the investigation progresses, J.M. Rodgers will continue monitoring developments and providing updates for importers and exporters navigating evolving trade policy.