US Trade Probe Targets India and 15 Nations Over Unfair Practices

Introduction: US Renews Tariff Pressure with New Probes

The Trump administration has initiated new trade investigations into 16 major trading partners, including India, China, and the European Union, signaling a renewed effort to exert tariff pressure. Announced on March 11, 2026, by US Trade Representative (USTR) Jamieson Greer, the probes will operate under Section 301 of the Trade Act of 1974. This move follows a US Supreme Court decision in February that struck down the administration's previous global tariff program, prompting a search for alternative legal avenues to address what it deems unfair trade practices.

The Scope of the Investigations

The USTR has launched two distinct but related investigations. The primary probe focuses on "structural excess capacity" in the manufacturing sectors of 16 economies. The list of targeted partners includes India, China, the European Union, Japan, South Korea, Mexico, Taiwan, Vietnam, Thailand, Malaysia, Cambodia, Singapore, Indonesia, Bangladesh, Switzerland, and Norway. Notably, Canada, the second-largest trading partner of the US, was not included in this investigation.

A second, broader investigation will examine the importation of goods produced with forced labor, covering more than 60 countries. This initiative aims to expand upon existing measures, such as the Uyghur Forced Labor Protection Act, which has already restricted certain imports from China's Xinjiang region.

Rationale for the Excess Capacity Probe

According to USTR Jamieson Greer, the investigation targets economies that exhibit signs of producing goods far beyond what their domestic markets can absorb. This overproduction, described as "untethered to market demand," allegedly leads to persistent trade surpluses and displaces US domestic manufacturing. The USTR's official notice specifically cited the automotive sectors in China and Japan as areas of concern.

The probe will scrutinize a range of practices believed to contribute to this imbalance, including:

• Large global current account surpluses
• Government subsidies and subsidized lending
• Suppressed domestic wages
• Noncommercial activities of state-owned enterprises
• Inadequate environmental and labor standards
• Currency manipulation

Rebuilding Tariff Authority After Court Setback

The timing of these investigations is critical. They provide the Trump administration with a legal mechanism to rebuild a credible tariff threat after the Supreme Court invalidated its use of a national emergencies law for imposing global tariffs on February 20. In response to the ruling, President Trump imposed a temporary 10% tariff for 150 days under Section 122 of the Trade Act of 1974. The new Section 301 probes are expected to conclude before these temporary measures expire in July, potentially paving the way for new, more targeted tariffs.

An Accelerated Timeline

The administration has laid out a swift timeline for the excess capacity investigation. Public comments are being accepted through April 15, with a public hearing scheduled for approximately May 5. This expedited process is designed to deliver findings and potential remedies by summer, aligning with the expiration of the temporary tariffs. Greer stated that the administration is determined to "find a way to deal with unfair trading practices" and protect US manufacturing.

Key Details of the US Trade Probe

Implications for India

India's inclusion in the probe comes amid ongoing trade discussions with the US. While some analysts, like Ajay Srivastava of GTRI, see the revival of Section 301 as a new phase in US trade policy, others believe India's situation is distinct. Amit Maheshwari, Managing Partner at AKM Global, argued that Indian manufacturing is primarily driven by its large domestic demand, unlike the export-oriented surplus capacity seen in other nations. He suggested that if these facts are presented effectively, the investigation is unlikely to have a significant adverse effect on the Indian economy.

This is not India's first encounter with a Section 301 investigation. A previous probe in 2020-2021 targeted India's Equalisation Levy, which the USTR claimed discriminated against American tech companies. That investigation ultimately contributed to the levy's abolition in 2024, demonstrating that these proceedings can lead to tangible policy changes.

Broader Market Impact

The investigations introduce a new layer of uncertainty into global trade. For the targeted economies, the primary risk is the imposition of new tariffs on exports to the US, which could disrupt supply chains and impact key industries. The move signals that the Trump administration remains committed to using trade restrictions as a central tool of its economic policy. Greer emphasized that trading partners should not be surprised by the probes and should adhere to existing trade agreements, though he did not rule out new tariffs even for compliant nations.

Conclusion and Forward Outlook

The launch of these Section 301 investigations marks a significant step by the US to re-establish its authority to impose tariffs and address long-standing trade grievances. By targeting excess industrial capacity and forced labor, the administration is addressing core issues it believes harm American workers and industries. The coming months will be crucial, as public hearings and the subsequent USTR report will determine whether new tariffs are imposed. For India and the other 15 economies under scrutiny, the immediate challenge is to engage with the process and present evidence to counter the allegations of unfair trade practices.