The United States has launched an investigation into trade practices in at least 16 of the world’s economies to determine whether they “burden or restrict” American trade. The investigation was announced by US Trade Representative Jamison Greer, who said it would be carried out under Section 301 of the Trade Act focusing on alleged manufacturing overcapacity.
India was among the 16 economies included in the Trump administration’s announcement. Full list of countries under the US scanner:
- Singapore
- Switzerland
- Norway
- Indonesia
- Malaysia
- European Union
- Cambodia
- Thailand
- Korea
- Vietnam
- Taiwan
- Bangladesh
- Mexico
- Japan
- India
When Greer announced the investigation, he said the United States would no longer allow countries that potentially “have export problems with excess capacity and production” to use its industrial base. “Today’s investigations underscore President Trump’s commitment to restoring critical supply chains and creating good-paying jobs for American workers in our manufacturing sectors,” Greer said.
Why is the US investigating 16 economies?
The US Trade Representative linked this step to prioritizing American talent and strengthening supply chains. Greer also said that structural surplus and production capacity in manufacturing sectors in some countries poses a challenge to Trump’s remanufacturing efforts.
In simple terms, the United States believes that some economies are manufacturing more products than they can consume domestically, which would ultimately limit domestic production and the expansion of investment in the United States.
“In many sectors, the United States has lost significant domestic production capacity or fallen alarmingly behind foreign competitors,” Greer said.
However, the announcement is also seen as an attempt by the Trump administration to rebuild the tariff wall, which was recently struck down by the US Supreme Court.
According to a Bloomberg report, Donald Trump needs this investigation to unilaterally impose tariffs on imports from countries seen as using unfair trade practices. The investigation is expected to take months to complete.
“Our view is that major trading partners have developed production capacity that is truly unconstrained by market incentives for domestic and global demand,” Greer said.
Investigation in India months after business hack
India is among the 16 economies set to be investigated by the US over its trade practices despite the two countries recently concluding an interim trade deal, under which tariffs on Indian imports to the US were reduced to 18% from 50%.
Earlier this month, the US also granted a waiver to India on the purchase of Russian oil amid fears of a supply crunch caused by the ongoing conflict in West Asia, sparked by US-Israeli strikes on Iran.
He is still awaiting an official response from India regarding the trade practices investigation announced by the United States.
