PROTECTING U.S. MANUFACTURING SECTORS AND JOBS: Today, the United States Trade Representative, Ambassador Jamieson Greer, launched Section 301 investigations into acts, policies, and practices of various economies relating to structural excess capacity and production in manufacturing sectors.
- Structural excess capacity and production in foreign economies’ manufacturing sectors presents a serious challenge to the Trump Administration’s reindustrialization efforts, making it harder to re-shore critical supply chains and create good-paying jobs for American workers.
- In contrast with cyclical excess capacity, foreign structural excess capacity and production lead to, among other issues, large or persistent trade surpluses in certain manufacturing sectors, as well as underutilized and unused capacity.
- Several sectors are plagued by excess capacity and production. In many of these sectors, the United States has lost substantial domestic production capacity or has fallen worryingly behind foreign competitors.
- An illustrative list of sectors plagued by excess capacity and production includes: aluminum, automobiles, batteries, cement, chemicals, electronics, energy goods, glass, machine tools, machinery, paper, plastics, processed food and beverages, robotics, satellites, semiconductors, ships, solar modules, steel, and transportation equipment.
- The creation or maintenance of structural excess capacity may result from interventions by trading partners that increase their domestic capacity and production while suppressing their domestic demand.
- Such interventions may include: (1) promoting production and export untethered from economic drivers of supply, demand, and investment, including through subsidies; (2) suppressing domestic wages; (3) non-commercial activities of state-owned or -controlled enterprises; (4) sustained market access barriers; (5) lax or inadequate environmental or labor protection or social safety net; (6) subsidized lending; (7) financial repression and currency practices; and others.
- These investigations will focus on economies that appear to exhibit structural excess capacity and production in various manufacturing sectors, which can manifest as large or persistent trade surpluses or underutilized or unused capacity: China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India.
- These investigations will examine whether these acts, policies, or practices burden or restrict U.S. commerce, and what action, if any, should be taken.
ELIMINATING UNFAIR FOREIGN PRACTICES: Ambassador Greer is taking today’s action pursuant to Section 301 of the Trade Act of 1974, as amended (Trade Act), which designed to address unfair foreign practices affecting U.S. commerce.
- Section 301 may be used to respond to unjustifiable, unreasonable, or discriminatory foreign government acts, policies, or practices that burden or restrict U.S. commerce.
- Under Section 302(b) of the Trade Act, the U.S. Trade Representative may self-initiate an investigation under Section 301.
- Upon initiation of these investigations, the U.S. Trade Representative must seek consultations with the economies whose acts, policies, or practices are under investigation. The Office of the U.S. Trade Representative (USTR) has requested consultations with the governments of the investigated economies: China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India.
- As explained in a formal notice, USTR is inviting public comments and will hold a public hearing covering each investigated economy starting on May 5.
