Asia Responds to Trump’s Broad Trade Probes, Potentially Leading to New Tariffs

After the U.S. Supreme Court invalidated a large part of President Donald Trump’s tariff regime in February, he threatened to utilize other legal powers to re – impose import duties on the rest of the world. Last week, the world got the first sign of how far – reaching those measures would be when the U.S. initiated two trade investigations into dozens of countries. Collectively, the two Section 301 probes – the first focusing on “excess manufacturing capacity” and the second on insufficient efforts to halt the import of goods made with forced labor – cover 60 different economies, including major trading partners such as China, India, Mexico, and the European Union.

On Monday, the Chinese commerce ministry denounced the investigations as “extremely unilateral, arbitrary, and discriminatory, and a typical protectionist act.”

“The U.S. has once again misused the 301 investigation process to place domestic law above international rules,” a Chinese spokesperson stated. “We urge the U.S. to immediately correct its wrong actions and meet China halfway.”

U.S. and Chinese officials are currently meeting in Paris to work out the agenda for a meeting between Trump and Chinese President Xi Jinping in early April. Meanwhile, Trump said in an interview with the Financial Times that he might postpone his visit and demanded that Beijing assist in protecting ships passing through the closed Strait of Hormuz.

Other Asian governments are gradually formulating their responses to the new trade investigations.

Singapore’s Ministry of Trade and Industry (MTI) said in a media statement that it would “engage with the USTR” regarding the new Section 301 investigations and contested the claim that it maintained a large trade surplus with the U.S.

Taiwan, which was included in both probes, said it remained “confident” that the investigation would not affect the terms of its U.S. trade deal, which was agreed upon last month.

“It is the government’s long – standing goal to align labor standards with international norms,” Taiwan’s cabinet wrote in a press statement released on Friday.

Awkwardly, South Korea’s government approved $350 billion in new U.S. investments on March 12, after the U.S. launched its investigation into the country’s “excess manufacturing capacity.” The investment pledge was part of the East Asian country’s trade deal with the U.S. announced last year.

Other countries are adopting a more forceful stance. On March 15, Malaysia’s minister of Investment, Trade and Industry, Datuk Seri Johari Abdul Ghani, declared the country’s trade deal with the U.S. “null and void.”

“It is not on hold; it no longer exists,” Datuk Seri told Malaysian reporters at the New Straits Times. “If [the U.S. claims] it is due to a trade surplus, they must specify the relevant industry. They cannot impose tariffs across the board.”

Who in Asia was hit by the Section 301 probes?

Asia has been particularly hard – hit by Trump’s far – reaching trade investigations.

The first investigation, announced on March 11, accused 16 global economies of maintaining “excess manufacturing capacity.” The majority of the targeted countries are in Asia, including regional powerhouses like Japan and China, and Southeast Asian nations such as Singapore, Vietnam, Thailand, Malaysia, and Cambodia.

“Asian governments are extremely interested in how this latest trade initiative develops,” Deborah Elms, head of trade policy at the Hinrich Foundation, said. “Most of the named Asian governments have a trade agreement with the Trump administration and will want to know how a Section 301 case determination might impact them.”

Many of the economies under scrutiny are export – led, relying on foreign demand to support manufacturing and jobs. “Much of Asia has been very successful in selling to the U.S.,” Elms said. “But this leads to high goods trade imbalances, especially if the domestic market is smaller or less prosperous than the U.S. and imports less from them.”

Just one day later, the U.S. followed up with a second investigation, now covering 60 countries and accusing them of failing to ban the import of goods made with forced labor. The list encompasses every major region, naming Central and South American nations such as Chile, Colombia, Costa Rica, El Salvador, Guatemala, and Venezuela, as well as U.S. allies including Canada and Israel.

“American workers and firms have been forced to compete against foreign producers who may have an artificial cost advantage due to the use of forced labor,” U.S. Trade Representative Jamieson Greer said in a press statement. The investigations will determine whether foreign governments have taken sufficient steps to prohibit the import of goods produced with forced labor and how this could affect U.S. firms.

Section 301 enables the USTR to investigate and penalize foreign countries for “unjustifiable, unreasonable, or discriminatory” trade practices. The law has a more strict regulatory period, meaning the procedures must be open for public comment. Previous 301 investigations have taken nearly a year to complete, yet Greer has stated that new tariffs could be imposed within five months.

Since the Supreme Court’s ruling, Trump has imposed a flat 10% tariff on U.S. imports using Section 122, which allows the president to impose tariffs without Congressional approval for up to 150 days.