The Office of the United States Trade Representative (USTR) is signaling an increased focus on the trade practices of major global partners. This escalation involves launching new investigations under Section 301 of the Trade Act of 1974, a legal tool that allows the U.S. to respond to unfair foreign trade practices. The USTR has initiated probes into several key areas, with a particular emphasis on China's adherence to previous trade agreements and its competitive strategies in critical industries. These actions carry significant implications for businesses reliant on international trade, potentially leading to altered market conditions and new tariff structures.
Initiation of Section 301 Investigations
Section 301 of the Trade Act of 1974 serves as the legal basis for the USTR's current investigations. This statute empowers the U.S. Trade Representative to investigate and potentially retaliate against foreign trade practices deemed unfair or inconsistent with international trade agreements. The USTR has a history of utilizing this authority, notably during the previous administration to address trade imbalances with China.
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The following are documented Section 301 investigations and related actions:
Korea: Acts, Policies, and Practices Concerning Coupang (Date initiated: not specified in data).
China:
Implementation of Commitments Under the Phase One Agreement (initiated October 24, 2025). This investigation seeks to determine if China has upheld its commitments made in the Phase One Economic and Trade Agreement.
Targeting the Semiconductor Industry for Dominance (initiated December 23, 2024).
Targeting the Maritime, Logistics, and Shipbuilding Sectors for Dominance (initiated April 17, 2024).
Illicit Fentanyl (withdrawn).
Forced Technology Transfer Policies and Practices (initiated August 24, 2017).
Nicaragua: Labor Rights, Human Rights, and Rule of Law (initiated December 10, 2024).
Vietnam:
Currency (initiated October 2, 2020).
Timber (initiated October 2, 2020).
Digital Services Taxes: In 11 Jurisdictions (initiated July 10, 2019 and June 5, 2020).
EU:
Large Civil Aircraft Dispute (initiated April 12, 2019).
Beef (initiated March 25, 1999).
Recent USTR actions include finalized modifications to existing Section 301 tariffs, with a statutory review leading to determinations on new and increased tariffs. For instance, on September 16, 2024, the USTR announced final modifications to tariff actions related to China's practices concerning technology transfer, intellectual property, and innovation. Additionally, the USTR has been considering temporary exclusions for certain products, such as wafer and cell manufacturing equipment, from Section 301 duties.
Focus on China's Phase One Agreement Compliance
A significant development is the USTR's initiation of an investigation into China's implementation of commitments under the Phase One Agreement, which was struck during the previous administration. This probe, launched on October 24, 2025, questions whether China has met its obligations regarding intellectual property, technology transfer, agriculture, and financial services.
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"The United States has reopened one of its most consequential trade questions of the past decade: Has China kept its promises? Or a recalibration of the U.S. – China trade framework itself?" - Clark Hill PLC
The USTR has stated that China "appears" to have fallen far short of its commitments. This investigation could signal a "new trade war cycle," prompting a re-evaluation of the U.S.-China trade framework. Companies involved in importing from or exporting to China, particularly those utilizing Chinese components or investment partnerships, are likely to be affected. Public input is being sought regarding this investigation.
Targeting Strategic Chinese Industries
Beyond the Phase One Agreement, the USTR is also investigating China's strategies in specific, critical industries. These include:
Semiconductors: An investigation was initiated on December 23, 2024, to examine China's targeting of the semiconductor industry for dominance. Another probe on January 8, 2025, specifically targets "legacy Chinese semiconductors."
Maritime, Logistics, and Shipbuilding: An investigation was launched on April 17, 2024, concerning China's targeting of these sectors for dominance.
These investigations into strategic industries suggest a broader U.S. strategy to counter perceived unfair competitive advantages in sectors deemed vital for national and economic security. Tariffs resulting from such investigations could encompass a wide range of Chinese products, particularly those containing foundational semiconductors or originating from the targeted sectors.
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Broader Implications and Business Impact
The USTR's expanding use of Section 301 investigations indicates a potential broadening of trade scrutiny across major trading partners, though China remains a primary focus.
Tariff Actions: Investigations under Section 301 can lead to the imposition of new tariffs or the modification of existing ones. Such actions could impact the cost of imported goods, including electronics and auto parts, and affect businesses that rely on these imports or use Chinese components.
Retaliation: The possibility of retaliatory measures from targeted countries, such as China, remains a consideration.
Business Advisory: Industries dependent on exports to China or relying on Chinese inputs and investment are particularly advised to monitor these developments. Companies are encouraged to seek professional legal counsel to navigate the complexities of Section 301 duties and exclusions.
Expert Analysis and Observations
Legal and trade experts highlight the significance of Section 301 as a potent tool for trade policy.
"It’s a U.S. law tool allowing the Trade Representative to retaliate against unfair foreign trade practices." - AOL (via CKSaksens.com)
The initiation of multiple investigations, especially concerning China's adherence to agreements and its industrial strategies, suggests a proactive and expansive approach to trade enforcement. The potential for these actions to trigger new tariff cycles or necessitate adjustments in supply chains is a key concern for businesses operating in the global marketplace. The USTR has scheduled hearings, such as one on January 16, to gather information relevant to these proceedings.
Conclusion and Next Steps
The USTR's recent activities underscore a period of heightened trade tension and strategic re-evaluation. The focus on China's compliance with the Phase One Agreement, coupled with investigations into its dominance in key industries like semiconductors, indicates a determined U.S. stance on trade practices. The legal framework of Section 301 provides the USTR with a flexible mechanism to address perceived unfairness, potentially leading to significant adjustments in international trade dynamics.
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Businesses engaged in trade with China and other major partners are advised to remain vigilant. The USTR's process involves public input, hearings, and eventual recommendations that can lead to policy changes, including tariffs. Understanding the specifics of each investigation and its potential impact on supply chains and import/export costs will be crucial for strategic planning.
Sources Used
USTR: Section 301 Investigations. Official government resource detailing initiated and ongoing Section 301 cases.
Link: https://ustr.gov/issue-areas/enforcement/section-301-investigations
Clark Hill PLC: USTR Launches New Section 301 Investigation on China’s Compliance with the Phase One Agreement. Legal analysis of the USTR's investigation into China's Phase One commitments.
Akerman LLP: USTR Initiates New Section 301 Investigation on China’s Implementation of Commitments Under the Phase One Agreement. Legal perspective on the Section 301 investigation into China's Phase One trade deal adherence.
CKSaksens: USTR Launches Section 301 Investigation Into China: What It Means for U.S. Businesses in 2025. Overview of a Section 301 investigation into China and its potential impact on U.S. businesses.
Holland & Knight: USTR Finalizes Action on New and Increased Section 301 Tariffs. Details on the USTR's final decisions regarding Section 301 tariffs, including exclusions.
Lexology: USTR Launches New Section 301 Investigation Into Legacy Chinese Semiconductors. Analysis of a Section 301 probe focused on Chinese semiconductors.
Link: https://www.lexology.com/library/detail.aspx?g=75a66ec7-1780-4c03-9693-428661458480
Cov: Section 301 Tariffs and Proceedings: Recent and Potential Developments. Discussion of current and potential future Section 301 actions, including tariff adjustments and investigations.
InsideTrade.com: USTR outlines plans for new Section 301 probe of China’s phase-one commitments. Reporting on the USTR's planned investigation into China's fulfillment of its Phase One trade deal obligations.
