Trade War: Trump Seeks Investigation of China and Indonesia by US Authorities

The administration of United States President Donald Trump has formally announced new trade investigations against China, Mexico, the European Union, and more than a dozen other economies including Indonesia. This aggressive step is taken with the primary target of replacing Trump’s reciprocal tariffs, which were recently declared illegal by the US Supreme Court.

The US Trade Representative (USTR), Jamieson Greer, stated to reporters in a telephone call that the investigations will likely expand to more countries. The investigation process will be conducted strictly under Section 301 of the Trade Act of 1974.

The law legally authorises the US to impose tariffs on imported goods from other countries proven to engage in unfair trading practices. Through this Section 301 mechanism, the government hopes to replace at least part of the reciprocal tariffs against most countries in the world that were previously imposed by Trump last year without Congressional authorisation.

“The President’s trade policy remains the same,” said Jamieson Greer. Greer emphasised that the primary focus of this step is to protect jobs for the American people. Additionally, this step is taken to ensure fairness in trade activities with US trading partners.

“Protecting American jobs and to ensure we have fair trade with our trading partners,” said Greer.

Further, Greer explained that the Section 301 investigation would encompass various actions, policies, and practices from certain economies related to “structural overcapacity” and “production in the manufacturing sector.” His office believes the investigation will uncover various “defects in the global trading system.”

“We expect that this investigation will uncover various unfair trading practices related to overcapacity and production in manufacturing,” he said.

“Our view is that major trading partners still have production capacity that is truly unbound from market incentives for domestic and global demand,” Greer stated.

He added that the condition of overproduction has resulted in large and persistent trade surpluses for those countries, which is not good for the US.

In detail, besides Mexico, China, and the European Union, the list of other economies that fall within the scope of this investigation includes Japan, India, Taiwan, Vietnam, South Korea, Singapore, Switzerland, and Norway. Then Indonesia, Malaysia, Cambodia, Bangladesh, and Thailand.

“We expect there will be other Section 301 investigations based on country-specific grounds, or perhaps other tools or investigations that might emerge. I won’t explain in too much detail,” Greer said.

Under Section 301 provisions, the US Trade Representative’s Office will receive written input regarding the investigation and hold hearing sessions. Greer ensured that his office will also maintain communication and consult with trading partners that are subjects of this investigation.

“After all that, USTR, we will have our findings and analysis, and we will propose, if necessary, responsive action. Responsive action can take a number of forms. It could be tariffs, it could be fees on services, it could also be other things,” Greer explained.

Previously, in a 20 February ruling, the US Supreme Court stated that Trump does not have the authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). In response to that legal defeat, Trump within hours signed an executive order imposing new “global tariffs” of 10 per cent under Section 122 of the Trade Act, though those tariffs will expire within 150 days.

Tariffs to Return to Previous Levels

Meanwhile, US Treasury Secretary Scott Bessent predicted that by August, US tariffs will return to the levels in effect before the Supreme Court ruling. Bessent stated that in the coming months, the USTR Office and the Department of Commerce will complete trade studies that allow them to impose more tariffs legally.

“It is my strong belief that tariffs will return to the old levels within five months, and that is very complete authority,” said Scott Bessent.

Bessent believes that the legal basis used this time is far stronger compared to previous attempts. He emphasised that the mechanism used now has been legally tested for decades in the United States.

“They have survived more than 4,000 legal challenges. They move more slowly, but they are stronger,” Bessent concluded.