(Yahoo! Finance) - The Trump administration unveiled two new trade investigations on Wednesday, spanning 60 countries, that could result in more tariffs or other remedies if the US finds fair trade practices were violated.
The investigations — formal probes by government agencies to determine whether certain imports are harming domestic industries or national security — are being initiated under Section 301 of the Trade Act of 1974, which allows the president to levy tariffs against nations that discriminate against US firms or commerce. The probes, run by the US trade representative's office, examine whether the exporting countries employ excess capacity and production in manufacturing sectors and whether other trading partners ban imports of goods made with forced labor, as the US does.
"We expect that this investigation will uncover a variety of unfair trading practices related to excess capacity and production in manufacturing," US Trade Representative Jamieson Greer told reporters. "The topics that we're investigating have been concerns for a very, very long time."
The investigations come after the Supreme Court struck down President Trump's use of emergency economic powers to impose tariffs. The president has initiated a 10% global tariff — and has vowed to raise it to 15% — under Section 122 that stands for 150 days. Greer intends to wrap up the new investigations before the Section 122 tariffs expire, though he said the president has the option to reissue them.
"We expect that this investigation will uncover a variety of unfair trading practices related to excess capacity and production in manufacturing," US Trade Representative Jamieson Greer told reporters. "The topics that we're investigating have been concerns for a very, very long time."
The investigations come after the Supreme Court struck down President Trump's use of emergency economic powers to impose tariffs. The president has initiated a 10% global tariff — and has vowed to raise it to 15% — under Section 122 that stands for 150 days. Greer intends to wrap up the new investigations before the Section 122 tariffs expire, though he said the president has the option to reissue them.
"Our view is that key trading partners have developed production capacity that is really untethered from the market incentives of domestic and global demand," Greer said.
Greer would not pre-judge the outcome of the investigation, but pointed to the Section 301 investigation of China during Trump's first term, where the reprimands were not just tariffs, but also included the Commerce Department working to strengthen export controls and the Treasury bolstering the committee that reviews foreign investments and mergers in US businesses to assess risks to national security.
The second Section 301 investigation — on banning forced labor — is expected to roll out Thursday afternoon and will cover roughly 60 countries.
About 10 years ago, Congress tightened this law, and the US government has beefed up enforcement over the past seven or eight years across administrations.
"This is not about domestic conditions of particular countries," Greer said. "It's really about whether countries have implemented external-facing laws to prohibit the import of goods made with forced labor."
The first investigation into excess production capacity is expected to be submitted to the docket for open hearings later this month. The deadline for comments is April 15, with public hearings convening on May 5. By late May or early June, the US trade representative should have findings and analysis and may prescribe actions that could include tariffs and other remedies.
"Our sense is that these are two fairly systemic issues that are afflicting the global economy," Greer said. "And so these are a good starting place to get at some of the unfair trading practices (and) the challenges we face in the global trading system."
These investigations are independent of trade deals negotiated last year. Greer said those deals stand on their own.
"The countries we're dealing with, they've all expressed an interest in maintaining those deals and holding them," Greer said.
Further investigations under Section 301 are forthcoming.
By Jennifer Schonberger - Senior Reporter
