New Section 301 Investigations on Countries Regarding Manufacturing Overcapacity and Forced-Labor Enforcement

The Trump Administration has launched two sweeping Section 301 investigations that could subject multiple countries to new tariffs. Public reporting suggests that these investigations are just the start of several new Section 301 actions the Administration intends to take to reimpose tariffs under different legal authorities than the recently struck-down use of International Emergency Economic Powers Act (IEEPA).

This announcement follows the Supreme Court's invalidation of President Donald Trump’s attempt to implement tariffs under IEEPA, and USTR indicated it would initiate Section 301 investigations to alternatively “address many of the issues at the heart of the President’s reciprocal tariff program.” Ambassador Jamieson Greer has indicated that he hopes to conclude these investigations, including proposed remedies, before the temporary tariffs imposed in late February under another tariff law addressing balance of payment issues (referred to as Section 122 tariffs) expire in July.

Structural Excess Capacity and Manufacturing Production

Background

On the evening of March 11, 2026, the United States Trade Representative (USTR) issued a Federal Register notice announcing the first of these new Section 301 actions, an investigation into structural excess capacity and production in certain manufacturing sectors. This investigation will examine whether the acts, policies, and practices of various economies relating to manufacturing overcapacity are unreasonable or discriminatory and burden or restrict US commerce. The following countries and economic blocs are subject to the investigation:

• China
• European Union
• Singapore
• Switzerland
• Norway
• Indonesia
• Malaysia
• Cambodia
• Thailand
• South Korea
• Vietnam
• Taiwan
• Bangladesh
• Mexico
• Japan
• India

Many of the countries targeted in the overcapacity investigation were among the list of countries and regions that were the focus of initial efforts on the “reciprocal” tariffs: China, the European Union, Switzerland, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Mexico, Japan, and India. 

Notably absent from this Section 301 investigation, but included on the full list, are Canada and South Africa.

Basis for the Investigation

USTR identified these countries as exhibiting structural excess capacity based on their bilateral trade surpluses with the United States or underutilized production capacity in various manufacturing sectors. According to the Federal Register notice, key trading partners have developed production capacity “untethered from the incentives of domestic and global demand,” leading to overproduction, large or persistent trade surpluses, and underutilized or unused capacity in manufacturing sectors.

USTR suggests, as part of its rationale for initiating this action, that countries producing more than they consume are “disregarding market-based policies.” The Federal Register notice further explains that exports from excess capacity countries to third countries may displace US exports to those markets, and that unused foreign capacity can chill production and new investments in the United States.

The investigation will examine the extent of any overcapacity and the causes of such overcapacity, which may include:

• Subsidies, especially export promotion subsidies;
• Wage suppression;
• Non-commercial activities of state-owned or state-controlled enterprises;
• Sustained market access barriers;
• Lax or inadequate environmental or labor protection or inadequate social safety nets;
• Subsidized lending; and
• Financial repression and currency practices.

Targeted Sectors

The sectors specifically identified in the Federal Register notice as “plagued by excess capacity and production” include:

• Aluminum
• Automobiles (including EVs)
• Batteries
• Cement
• Chemicals
• Electronics
• Energy goods
• Glass
• Machine tools
• Machinery
• Nonferrous metals
• Paper
• Plastics
• Processed food and beverages
• Robotics
• Satellites
• Semiconductors
• Ships
• Solar modules
• Steel
• Transportation equipment

The Federal Register notice states that in many of these sectors, the United States has lost “substantial domestic production capacity” or has “fallen worryingly behind foreign competitors.”

Key Dates

The following deadlines and dates apply to this investigation:

• March 11, 2026: USTR initiated the investigation.
• March 17, 2026: Beginning of public comment period and deadline to request to appear at hearing; USTR will open dockets for submission of written comments and requests to appear.
• April 15, 2026 (11:59 p.m. EST): Deadline for submission of written comments, requests to appear at the hearings, and summaries of hearing testimony.
• May 5, 2026: Public hearing to be held at the US International Trade Commission building, 500 E Street SW, Washington, DC, beginning at 10 a.m.
• May 8, 2026: Potential last day, if necessary, of public hearings.
• Seven calendar days after last hearing day: Deadline for submission of any post-hearing rebuttal comments.

Written comments, hearing appearance requests, summaries of testimony, and post-hearing rebuttal comments must be submitted through the online USTR portal under Docket No. USTR-2026-0067 (for public comments) and USTR-2026-0068 (for hearing appearance requests).

Enforcement of the Prohibition on Forced Labor

Background

The day after USTR launched the investigation into excess capacity, USTR announced another investigation that will examine the extent to which various identified trading partners’ policies result in the “failure to impose and effectively enforce a prohibition on importation of goods produced with forced labor.”

Under US statutory law, forced labor means “work or service which is exacted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself voluntarily.” 19 U.S.C. 1307. US law gives US Customs and Border Protection (CBP) the authority to prohibit the importation of goods produced with forced labor.

USTR’s Federal Register notice announcing the new investigation cited statistics from the International Labour Organisation showing that use of forced labor has increased from 2016–2021. The Federal Register notice emphasized that use of forced labor lowers production costs and results in the sale of goods at lower prices, resulting in unfair trade.

All countries subject to the overcapacity investigation are also subject to the investigation of forced-labor enforcement.

Basis for the Investigation

USTR noted that Canada, Mexico and the European Union have adopted measures intended to stop the importation of goods produced using forced labor. Recent trade agreements negotiated by the Administration with other countries have also included similar commitments. However, USTR maintains that no country has effectively adopted and enforced such measures yet.

USTR highlighted particular goods and industries with supply chains that often involve forced labor. USTR cited the Department of Labor’s 2024 List of Goods Produced by Child Labor or Forced Labor (the “TVPRA List”), which includes 134 items produced with forced labor in particular countries. The TVPRA List includes 34 downstream goods in particular countries that are made with inputs that are produced with forced labor. These inputs include: cotton used to produce textiles and thread; critical minerals used to produce solar products or auto parts; fish products; and palm fruit used to produce kernel or palm oil.

As such, USTR requests comments to address the following:

• Whether any economy subject to these investigations maintains or is in the process of establishing a forced-labor import prohibition, and whether any such import prohibition is being effectively enforced;
• The extent to which the failure to implement or enforce results in discrimination against US goods;
• The extent to which the failure to establish or enforce has negatively affected US commerce; and
• What action, if any, should be taken to address these issues, including the imposition of duties or other import restrictions on imports from those countries.

Targeted Countries

In Annex A to the Federal Register notice, USTR lists 60 countries subject to the forced-labor investigation. While some of these countries have had companies subject to a CBP forced-labor finding in recent years, several of these economies—such as Australia, Canada, the European Union, Israel, Japan, Norway, South Korea, Switzerland, and the United Kingdom—have not faced serious allegations of forced labor by US authorities. The inclusion of such a wide range of developed and developing countries, with a diversity of labor practices and enforcement, underscores the Administration’s likely goal to use these new Section 301 investigations to reimpose the recently struck-down IEEPA tariffs under different legal authorities.

Key Dates

The following deadlines and dates apply to these investigations:

• March 12, 2026: USTR initiated the investigation.
• April 15, 2026: Deadline for submission of written comments, requests to appear at the hearings, and summaries of hearing testimony.
• April 28, 2026: Public hearing to be held at the US International Trade Commission building, 500 E Street SW, Washington, DC, beginning at 10 a.m.
• May 1, 2026: Potential last day, if necessary, of public hearings.
• Seven calendar days after last hearing day: Deadline for submission of any post-hearing rebuttal comments.

Looking Ahead

These investigations are expected to result in country-specific tariffs and exemptions that are close, if not identical to, the IEEPA tariffs previously deemed unlawful. Public reporting suggests that these investigations are just the first of several new Section 301 actions the Administration intends to take that will effectively reimpose the recently struck-down IEEPA tariffs under different legal authorities.

Mayer Brown has successfully advised and assisted clients in prior Section 301 investigations. These new investigations present important opportunities for stakeholders to inform and influence the Administration’s policymaking. The public comment and hearing process provides an important opportunity for stakeholders to establish a factual record with regard to trade policy imposed by the selected trading partners in the selected industries. This factual record can be used to educate and influence future policymaking, including advocating for exemptions that companies may find necessary to conduct their business.

Further, for many of the identified countries in this investigation, trade negotiations remain ongoing and this investigation provides an opportunity for stakeholders to advocate for specific outcomes of these negotiations. For instance, the Section 301 comment-and-hearing process allows stakeholders an audience with USTR to advance their proposals regarding the scope and application of Annex II tariff exemptions as well as the scope of potential tariff exemptions identified under Annex III that may be granted post-Section 301 investigation and upon completion of ongoing trade negotiations. Thus, each Section 301 investigation provides stakeholders a targeted opportunity to educate and influence policymakers across the Administration and will inform future trade policy actions.

The full Federal Register notice can be found at USTR 301 FRN Industrial Excess Capacity 3-11-26.pdf.