In America, Donald Trump administration has started a new investigation against 16 major trading partner countries including India, China and Bangladesh. This investigation is being conducted under America’s Trade Act Section 301 (Trade Act 1974). Under this law, America can increase tariff i.e. import tax on any country. This step has been taken when last month the US Supreme Court had canceled the tariffs imposed by the Trump administration, calling them illegal. After this, America is again trying to put pressure through a new investigation.

US Trade Representative Jamieson Greer said that if irregularities are found in the investigation, new tariffs could be imposed on many countries. The countries that may be affected include China, European Union, India, Japan, South Korea and Mexico. The purpose of this investigation is to look at those countries which have more production capacity or which continuously sell goods to America with large trade surpluses. America says that in such circumstances the domestic industry may suffer losses.

Which other countries were included?

Other countries included in this investigation include Taiwan, Vietnam, Thailand, Malaysia, Cambodia, Singapore, Indonesia, Bangladesh, Switzerland and Norway. Interestingly, America’s second largest trading partner Canada is not included in this list. The US has also said that it is going to launch a separate investigation, which will look at the possibility of banning the import of products that are made with forced labour. This investigation can cover more than 60 countries.

What action did America take against China?

Even before this, America had taken action on solar panels and other products coming from Xinjiang region of China. This step was taken under the Uyghur Forced Labor Protection Act, which was recognized during the regime of former US President Joe Biden. America alleges that people of the Uyghur Muslim community are forced to work in the Xinjiang region of China. However, China has been denying these allegations. The Trump administration has set a fast deadline for this investigation. Suggestions will be sought from the public till April 15 and a public hearing will be held around May 5. After this, there is a plan to complete the investigation by July. This step is considered to be part of the larger goal of the Trump administration, in which America wants to reduce trade deficit and strengthen domestic manufacturing.

What is section 301?

Section 301 is an important part of the US trade law Trade Act of 1974. It is used when America feels that another country is adopting wrong or unfair methods in trade. Under this law, America can start an investigation against that country and impose tariffs or other trade restrictions if necessary. According to this law, the Office of the United States Trade Representative (USTR), the trade department of the US government, investigates the trade policies of a country.

US Finance Minister Scott Besant has said that the export restrictions imposed by China on rare minerals have proved to be a ‘mistake’ for it. These steps made the world realize how Beijing can use these important resources to exert pressure.

Controversy increases over export control
In October, China had implemented new rules on the export of technologies related to rare metals. This thing is considered very important for defence, automobile, consumer electronics and many industries. Due to these sanctions, tension had increased in trade negotiations between America and China. However, following President Xi Jinping and Donald Trump’s meeting on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in South Korea this week, China announced it would suspend some export restrictions for a year.

‘China has made the world realize the danger’- Besant
Speaking to the Financial Times, Besant said, ‘China has alerted everyone about the danger. He has really made a mistake. According to him, ‘Showing weapons is one thing, but firing bullets in the air is another matter.’

movement in the global market
Control over rare metals had increased volatility in markets around the world and affected supply chains. This area is considered a major means for China to create international influence. Besant says that now it will not be easy for China to take a similar step again, because many countries including America have ‘prepared options’ against it. He said, ‘China’s leadership team was a little nervous about the global reaction.’

China’s President took America to task
Xi Jinping took on Trump on Friday at the ongoing APEC summit in South Korea. He told leaders of the Asia-Pacific region that his country would help defend global free trade at the annual economic regional forum, which US President Donald Trump ignored.