US launches Special 301 investigation against 16 trade partners, including India, solar, steel industry under scanner
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On March 11, the US Trade Representative (USTR) launched a fresh round of Section 301 trade investigations targeting the policies and industrial practices of 16 economies, including India.
The U.S. investigation identifies several sectors in India where structural excess capacity or export surpluses may exist. These include solar modules, petrochemicals, steel, textiles, health-related goods, construction materials and automotive products.
Under the US law, actionable matters under section 301 include acts, policies, and practices of a foreign country that are seen to be unreasonable or discriminatory and burden or restrict U.S. commerce. It says that an act, policy, or practice is unreasonable if, while not necessarily in violation of, or inconsistent with, the international legal rights of the United States, it is otherwise unfair and inequitable.
If such practices are confirmed, Washington may impose retaliatory trade measures, including additional tariffs, quantitative restrictions or other trade barriers.
According to the U.S. notice, India’s solar-module manufacturing capacity is already 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 revival of Section 301 investigations signals that U.S. trade policy is entering a new phase following the court ruling that curtailed Washington’s tariff powers. With its earlier tariff strategy effectively dismantled, the United States appears to be turning to trade investigations and targeted measures to maintain leverage in negotiations with trading partners”, says Ajay Srivastava, founder, Global Trade Research Initiative (GTRI), a Delhi based think tank on international trade.
In addition to India, countries like China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Bangladesh, Mexico, and Japan have also come under the purview of USTR’s Special 301 investigations.
The probe covers sectors including steel, aluminium, automobiles, batteries, electronics, chemicals, machinery, semiconductors, and solar modules.
The investigations will examine whether policies such as industrial subsidies, state-supported manufacturing expansion, activities of state-owned enterprises, market-access barriers, currency practices or suppressed domestic demand have contributed to global manufacturing overcapacity that burdens U.S. commerce.
GTRI notes that while Section 301 remains an important U.S. trade tool, it is slower and more legally constrained than the reciprocal tariff system invalidated by the Supreme Court. Section 301 investigations require evidence of harm and must be tied to specific trade practices.