United States Investigates 16 Countries on Trade Issues
The United States government has initiated a Section 301 investigation into 16 economic regions. This probe covers allegations of excess production capacity in those countries, including Indonesia. This policy has drawn attention following the US Supreme Court’s decision to overturn the reciprocal tariff policy.
Section 301 under the Trade Act of 1974 is a provision that authorises the United States Trade Representative (USTR) to investigate and impose sanctions on foreign governments deemed to engage in unfair trade practices against the US.
“This investigation will determine whether such actions, policies, and practices are unreasonable or discriminatory and burden or restrict US commerce,” states a White House release issued on 11 March 2026.
The countries subject to this investigation are China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India.
According to the Institute for Economic and Social Research at the Faculty of Economics and Business, University of Indonesia (LPEM FEB UI), in a publication titled ‘Trade and Industry Brief’, a Section 301 investigation could enable the US to apply instruments such as tariffs and the withdrawal of trade concessions. It could also impose binding agreements requiring countries to cease such practices or provide compensation to the US.
In its document, the USTR claims evidence of structural excess capacity and production in Indonesia, reflected in large or sustained trade surpluses in goods. Additionally, the US cites continuous oversupply due to significant imbalances between domestic production and demand.
However, LPEM UI states that Indonesia’s coverage of the US market is relatively small, at only around 4.2 percent of the total exports falling under the Section 301 scope. “Thus, it is not significant enough to be considered a primary source of pressure on US industries,” writes the LPEM UI research team.
Furthermore, the US allegations are seen as failing to demonstrate a clear causal relationship, as they do not specifically identify how those policies directly harm US industries, either in terms of trade volume or market displacement.
LPEM FEB UI also notes that the Section 301 approach could be inconsistent with the rule-based system. “Because it is conducted unilaterally without going through the WTO (World Trade Organization) dispute settlement mechanism.”
The Indonesian government has prepared evidence and arguments to face this investigation. Spokesperson for the Coordinating Ministry for the Economy, Haryo Limanseto, stated that the government, along with business associations, has conducted consolidation. He further assessed that a coordination team needs to be formed to follow up on the investigation process and also to hold consultation sessions with the USTR.
The USTR states that interested parties are requested to submit written comments, requests to appear at hearings, along with summaries of testimony, no later than 15 April 2026. The USTR will hold hearings on this investigation starting from 5 May 2026.