On March 11, 2026, the United States Trade Representative (USTR) initiated a series of investigations under Section 301 of the Trade Act of 1974 (Section 301) targeting alleged structural excess capacity and overproduction in manufacturing sectors across a wide range of U.S. trading partners (the “Overcapacity Investigations”). Concurrently the USTR announced a separate set of investigations under Section 301 into whether certain trading partners have failed to take action to prevent trading in goods produced by forced labor (the “Forced Labor Investigations”). The Overcapacity Investigations and Forced Labor Investigations are intended to assess whether foreign government acts, policies, or practices are unreasonable or discriminatory and burden or restrict U.S. commerce, potentially laying the groundwork for new trade actions, including imposing tariffs and non‑tariff measures. The USTR has also suggested that further Section 301 investigations may be announced in the coming weeks.
Scope of Overcapacity Investigations
The Overcapacity Investigations will address 16 U.S. trading partners: China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India. According to the USTR, these economies exhibit indicators of structural excess capacity, including large or persistent trade surpluses, underutilized or unused production capacity, and sustained overproduction.
The USTR identifies a broad range of affected sectors, including aluminum, automobiles, batteries, cement, chemicals, electronics, energy goods, glass, machinery, non‑ferrous metals, paper, plastics, processed food and beverages, robotics, semiconductors, ships, solar modules, steel, and transportation equipment.
The Federal Register notice of the investigation outlines that structural excess capacity may be found where a trading partner uses policy interventions to increase domestic capacity and suppress demand, such as through: promoting production and export unrelated to market drivers; suppressing domestic wages; non-commercial activities of state entities; barriers to market access; lax environmental or labor protection; subsidized lending; or currency practices.
Process and Potential Measures
The USTR has requested consultations with each investigated economy and established a public participation process. The public docket will open on March 17, 2026 and written comments and requests to appear at hearings must be submitted by April 15, 2026. Public hearings will commence on May 5 before the inter‑agency Section 301 Committee. Post‑hearing rebuttal comments will be accepted seven days after the conclusion of the hearings.
While the investigations are widely regarded as a stand-in for tariffs the President imposed under International Emergency Economic Powers Act, which the Supreme Court recently ruled were unlawful, a number of potential actions may be taken under Section 301 once the investigations are completed. In addition to tariffs, Section 301 authorizes the imposition of fees, or other trade restrictions, and authorizes USTR to pursue negotiations or other policy actions. Although the announcement does not provide a timeframe for the conclusion of the Overcapacity Investigations, it is expected that the USTR will aim to complete the investigation by July, to coincide with the expiration of tariffs under Section 122 of the Trade Act of 1974 that President Trump announced in the wake of the Supreme Court decision.
Additional Investigation into Forced Labor
A day after the announcement of the Overcapacity Investigations, the USTR also initiated further Section 301 investigations targeting the trade in goods produced with forced labor (the “Forced Labor Investigations”). The Forced Labor Investigations address whether 60 countries have taken adequate measures to prevent and prohibit the trade in goods produced in whole or in part with forced labor.
According to the Federal Register notice, the deadline for comments and hearing requests for the Forced Labor Investigations is also April 15, 2026, with hearings scheduled for April 28 to May 1, 2026. Post-hearing comments are due within 7 days of the close of the hearings.
Takeaways
The announcements of the Overcapacity and Forced Labor Investigations signal a significant pivot toward Section 301 as a potential lever to advance the Trump administration’s trade agenda. Companies with exposure to the covered sectors or economies should closely monitor developments, assess supply chain and pricing impacts, and consider participating in the comment process to shape the administrative record and potential remedies.
