The Donald Trump administration has launched a fresh round of trade investigation targeting India and 15 other economies such as the EU, China and Mexico, setting the stage for a new set of tariffs after Washington’s earlier strategy was outlawed by the Supreme Court.
US trade representative Jamieson Greer announced that his office would begin a probe under Section 301 of the Trade Act focused on alleged excess manufacturing capacity, escalating trade uncertainty again. The probe covers sectors such as steel, aluminium, automobiles, batteries, electronics, chemicals, machinery, semiconductors and solar modules.
The US investigation identified several sectors in India where structural excess capacity or export surpluses may exist. They include solar modules, petrochemicals, steel, textiles, health-related goods, construction materials and automotive products.
According to the US notice, India’s solar-module manufacturing capacity is nearly three times domestic demand, suggesting the possibility of export-driven production surpluses. Similar concerns are raised about expanding capacity in petrochemicals and steel.
The investigations, which typically take months to complete, are required for the President to unilaterally place duties on imports from specific countries deemed to employ unfair trading practices.
The investigation will follow a defined process. Public dockets for written submissions will open on March 17, allowing companies, trade groups and governments to submit comments. Written submissions and requests to participate in hearings must be filed by April 15.
Hearings will take place from May 5 to May 8 at the US International Trade Commission in Washington. Rebuttal submissions must be filed within seven days after the hearings conclude. In effect, new tariffs can be slapped from May.
“Key trading partners have developed production capacity that is really untethered from the market incentives of domestic and global demand,” Greer said during a telephone briefing for reporters, a Bloomberg report said.
The move marks the formal kick-off of the administration’s efforts to rebuild Trump’s tariff wall after the Supreme Court decision against his global duties last month. Tariffs have been a core plank of Trump’s economic policy, and he had used his ability to unilaterally impose them to wield leverage against foreign countries.
Within hours of the ruling, Washington imposed a uniform 10 per cent tariff under Section 122 of the Trade Act of 1974. However, the shift created a new dilemma for the US. Several countries had already negotiated trade arrangements with Washington under the earlier tariff framework. India had signed a joint statement with the US on February 6, committing to reduce tariffs, purchase more than $500 billion of US products over five years, ease digital regulations affecting American tech firms and relax certain regulatory barriers for US exports.