Impact of President Trump’s Section 301 investigation on trade tariffs

A quick guide to Section 301 from CNBC is a quick guide to what Section 301 is, why the White House decided to use it, and what President Donald Trump’s administration hopes to accomplish.

Simply put, Section 301 of the Trade Act of 1974 allows us to investigate trade practices that appear to be unfair to determine “whether the acts, policies, or practices of a foreign state are unreasonable or discriminatory and burden or restrict United States commerce.”

U.S. Trade Representative Jamison Greer on Wednesday announced a new series of investigations targeting 16 trading partners, from Singapore and Switzerland to India and Norway. The complete list can be found here.

Section 301 investigations are not new, with several ongoing investigations into Brazil and China. The first Trump administration conducted six investigations into foreign trade practices under Section 301, two of which resulted in tariffs against China and the European Union. Former President Joe Biden’s administration also conducted a Section 301 investigation.

The latest study will examine whether these laws, policies, and practices burden or restrict U.S. commerce and, if so, what actions should be taken.

If the investigation reveals unfavorable conditions for the economy in question, the USTR has the authority to impose new tariffs and other import restrictions, which could be implemented as early as the summer.

Trade officials could also withdraw or suspend concessions in trade agreements or enter into agreements with the economies in question if they agree to “cease the conduct in question or compensate the United States,” the USTR said.

The report added that retaliatory measures should “affect foreign goods and services in an amount comparable to the burdens or restrictions that the foreign country imposes on U.S. commerce.”

The Section 301 investigation follows the U.S. Supreme Court’s ruling that the Trump administration’s “reciprocal” tariffs imposed on numerous trading partners in April 2025 under the International Emergency Economic Powers Act of 1977 are illegal.

This led the administration to look for other ways to reimpose the repealed obligations.

The White House initially responded to the Supreme Court’s decision by using Section 122 of the Trade Act of 1974 to impose a temporary 10% “universal” tariff on all imports (and hint at a 15% increase that could come soon).

But these tariffs are only temporary, and President Trump has made no secret that he wants to find a way to reinstate the disallowed tariffs.

The latest Section 301 investigation relates specifically to “structural overcapacity and production in the manufacturing industry,” amid claims that competing countries are “dumping” excess production into the U.S. market and threatening domestic manufacturing.

The USTR said Wednesday that these practices pose a “significant challenge” to President Trump’s reindustrialization efforts, making it difficult to “re-strengthen critical supply chains and create good-paying jobs for American workers.”

The United States blames these dynamics for persistent trade deficits with trading partners and hindering growth.

“The United States will no longer sacrifice its industrial base to other countries that may be exporting their overcapacity and overcapacity problems to the United States,” Greer said Wednesday.

Discussions will now be held with economies whose trade practices are in the spotlight. Starting on the 5th, the USTR will hold public hearings for each economy under investigation.

“After all is said and done, USTR, we will have our findings and analysis and recommend any countermeasures as appropriate,” Greer said. “Responsive measures could take many forms. It could be tariffs, it could be service charges, it could be other things,” he said.

China and the European Union are among the countries pushing back against the investigation, warning that it could jeopardize trade deals reached with the United States over the past year.

Greer is scheduled to announce on Thursday a new Section 301 investigation into imported goods made using forced labor.

Analysts say the timing of the latest trade probe is interesting given the White House’s focus on the ongoing military campaign against Iran. The invocation of Section 301 is seen as a blatant attempt to revive President Trump’s global tariff strategy, which is currently time-limited, with interim tariffs set to expire in July.

“The timing is interesting. You’d think the administration would have their hands full right now, but apparently that’s not the case,” John Woods, chief investment officer for Asia at Lombard Odier, told CNBC on Thursday.

He said Section 301 “essentially stands in for trade tariffs previously imposed but subsequently suspended by the Supreme Court,” adding that the U.S. would use the investigation as a lever in further negotiations over trade deals.

Goldman Sachs’ Tim Moe said it’s not surprising that the Trump administration is seeking to use Sections 122 and 301 to target trading partners in the wake of the Supreme Court decision.

“It shouldn’t come as a complete surprise that this was announced. Of course, the timing is always unexpected, but I don’t think it should be a total surprise. That’s the first thing. The second thing is that Section 301 requires a process. There has to be an investigation, there has to be an evolution of the facts… (so) it’s going to take some time for this to play out.”