WASHINGTON – US President Donald Trump’s administration started the first of several sweeping trade investigations that set the stage for new tariffs, the centrepiece of a push to replace levies struck down by the US Supreme Court.
US Trade Representative Jamieson Greer announced on March 11 that his office would begin a probe into more than a dozen major economies under Section 301 of the Trade Act focused on alleged excess manufacturing capacity.
The investigations, which typically take months to complete, are required for the President to unilaterally place duties on imports from specific countries deemed to employ unfair trading practices.
Economies that will be subject to the inquiry include some of the US’ largest trading partners: China, the European Union, Mexico, India, Japan, South Korea and Taiwan.
Switzerland, Norway, Indonesia, Singapore, Thailand, Malaysia, Cambodia, Vietnam and Bangladesh will also be investigated.
“Our view is that key trading partners have developed production capacity that is really untethered from the market incentives of domestic and global demand,” Mr Greer said during a telephone briefing for reporters.
The move marks the formal kick-off of the administration’s effort to rebuild Mr Trump’s tariff wall after the landmark Supreme Court decision against his global duties in February.
Tariffs have been a core plank of the President’s economic policy, and he had used his ability to unilaterally impose them to wield leverage against foreign countries.
While Mr Trump and his team argue that they simply want continuity in their trade policy, the administration’s rush to respond to the court defeat has yet again roiled global trading relations.
Launching a new trade investigation risks stirring up tensions with Beijing just weeks before a planned summit between Mr Trump and Chinese President Xi Jinping.
Targeting Mexico could further damage the already strained efforts to renegotiate the US-Mexico-Canada Trade Agreement that Mr Trump signed during his first term.
Canada was not among the initial batch of targeted countries.
Mr Greer signalled that the administration has no intention of slowing down. The Office of the US Trade Representative plans to hold a public hearing around May 5 following an open comment period on the probe. After that, it can propose corrective actions, including tariffs.
As early as March 12the Trump administration also plans to open a separate investigation related to a ban on imports made with forced labour that cover at least 60 countries.
Other inquires are expected to follow, Mr Greer said. He did not specify what industries or countries could be affected, though he suggested they could target countries over digital-services taxes, pharmaceutical pricing and other concerns.
“The policy remains the same. The tools may change, depending on the vagaries of courts and other things, but the policy remains the same,” Mr Greer told reporters.
After the justices ruled that Mr Trump’s tariffs violated the law, the President immediately announced tariffs of 10 per cent under a different authority as a stopgap for 150 days, while signalling plans to impose levies under different powers, including Section 301 and Section 232.
He later said he would raise the temporary baseline rate to 15 per cent, though he has so far held off on actually imposing the increase.
Mr Greer said he would seek to conclude the investigations before the Section 122 levies expire, which would allow any new levies to quickly replace them.
Mr Trump has groused that those provisions lack the same flexibility as the emergency law he had used, though the Section 301 and Section 232 avenues are widely seen as more legally sound. He has already used them to impose tariffs on autos, metals, and certain imports from China and Brazil.
Mr Greer said in a Feb 20 statement that the administration expects fresh investigations to cover most major trading partners.
At the time, he said other issues the US could look into include discrimination against US technology companies, digital taxes and regulations, and environmental practices in the seafood and rice industries.
On March 11Mr Greer referred back to that statement while saying he expected additional investigations.
“I think there are a handful of these that will come out. I don’t want to give a specific number, because I think that there’s a little bit of decisions to be made on what to put out when, but these are important issues to address,” he said.
Mr Greer said in February that the administration would “continue” ongoing Section 301 investigations into Brazil and China as well as “maintain” current levies under Section 232 and “conclude ongoing negotiations”.
He downplayed a fresh wave of probes into specific industries under Section 232.
“I don’t think we’re going to see that in the next few weeks, right, but I think we have three years left to go in this presidency,” he said.
The March 11 announcement was expected to be the first of several as the administration tries to reassemble the tariffs that Mr Trump previously imposed using emergency powers. It is not clear exactly how specifically the administration will apply potential new levies to reconstruct its previous tariff regime.
Mr Trump has repeatedly boasted about the money brought in through his tariffs, and losing that revenue stream is a key concern for the White House.
The administration has sought to delay steps towards issuing tariff refunds to importers, but a federal appeals court recently rejected the government’s request to maintain a pause for as long as four months. BLOOMBERG