U.S. 301 Trade Probe: A New Version of ‘Reciprocal Tariff’

China and the United States have reached new consensus on a number of issues on tariff arrangement, trade, and more after candid, constructive and in-depth exchanges during the sixth round of economic and trade consultation held in Paris on March 15-16. Both sides have agreed to keep talks.

However, there is a new obstacle to recovering global trade order. Trump administration recently announced to initiate Section 301 investigation on 16 major trading partners and probe on “forced labor” on 60 trading partners, both including China, aiming at a new sweeping tariff. The two announcements were made on March 11 and 13 respectively, on the eve of the China-U.S. consultation in Paris.

So it is a curious paradox that Washington simply doesn’t want to talk with China, or simply want to create new difficulties on the bilateral trade relationship, which, ironically, it has claimed to improve.

In fact, the latest Section 301 tariff is a continuation of the killed IEEPA tariff by other means, the underlying logic is not trade, but Trump’s political agenda which could not survive without tariff tool. Trump uses tariff to comfort his constituency base, especially before the mid-term election. It also shows that the White House regards China as a major target of its tool pit.

Immediately after the U.S. Supreme Court struck down Trump’s worldwide “reciprocal tariff” (global average at 17 percent) under IEEPA on February 20, Trump announced a first substitute — 10-15 percent global tariff under Section 122 of 1974 Trade Law which authorizes the President to impose emergency global tariff up to 15 percent for maximum 150 days. Hence, an average of 15 percent globally is kept temporarily, more or less the same as the “reciprocal tariff,” but could survive for only 150 days and more likely, to be killed again by the Federal Court of International Trade after 24 states sued.

Hence the second substitute, Section 301 tariff, which aims at a similar global tariff rate, came out of the White House tool pit. Section 301 of 1974 Trade Law authorizes USTR to investigate foreign governments or corporations if there exist “unreasonable or unfair” practices that damage the U.S. interest. If the finding is affirmative, USTR is authorized to impose tariff or other restrictions on them.

However, Section 301 itself is a blunt violation of WTO rules with unconditional multilateral most favored nation treatment at the core, and tariff levels between WTO members are set through negotiations, not unilaterally. In 2000, Washington launched Section 301 investigation on EU. Then EU sued to WTO and won the case. WTO authorized EU retaliation on billions of dollars of U.S. products, forcing Washington to drop the investigation. In 2018-2019, Trump administration launched Section 301 investigation and imposed tariffs on $370 billion of Chinese exports to the U.S. China, while imposing retaliatory tariff on U.S. products, sued to WTO as well. On September 15, 2020, the WTO panel report found the U.S. Section 301 investigation in violation to the MFN clause and tariff reduction list clause, both of GATT 1994.

Most of the investigation and conclusions of Section 301 have been proved absurd. They were not based on balanced hard facts, but on deliberately selective blindness. In 2018-2019, USTR imposed unilateral tariffs on $370 billion Chinese goods based on 301 investigations, but the investigation did not present hard facts to support. It cited an AmCham member survey which showed that 81 percent of the members had responded that they had no compulsory technology transfer problem, others did not answer, with only a few said yes. However, the investigation took all the remaining 19 percent and concluded nearly 20 percent of them had been forced to transfer technology. The author once attended a meeting in Beijing with Michael Pillsbury, advisor to the President. He showed the Narrow Report, sister report to the Section 301 investigation report. The author checked citations 46, 47, 48, 49 and 50 of the report and found no hard facts support. Michael had nothing to say but kept nodding.

The Section 301 report, during public hearing met blunt opposition by 94 percent of the participants. This overwhelming opposition, however, did not stop the report and the subsequent tariff.

The Section 301 report on Chinese shipbuilding is more ridiculous. It claimed that Chinese shipbuilding industry harms U.S. shipbuilding industry. The Chinese shipbuilding output is 60 times larger than that of the U.S. and there is completely no head-on competition at all. Nevertheless, the investigation concluded that the harm did exist and charge $50 per ton of port fee on Chinese cargo ships.

Likewise, the current Section 301 investigation and “force labor” probe will have a preset conclusion and, logically, a preset tariff. USTR has set a very tight schedule: public opinions submission on March 17; deadline for written opinions and public hearing application on April 15; and public hearing May 5-8. Attention: there are only a few months for USTR to investigate 16 trading partners and probe 60 partners. Apparently, they will not take serious investigation but will give conclusion and announce new tariffs by late July when Section 122 tariff terminates. A real seamless relay!

Unlike “reciprocal tariff” and Section 122 tariff, the Section 301 tariff is domestic law-based and could be valid for at least five years before sunset review. As the 16 U.S. major partners account for over 75 percent of total U.S. merchandise imports, the average Section 301 tariff, if average 15 percent, will mean a global tariff of 11.5 percent for years to come. It will be a significant breaker of the world multilateral trading system and a major headwind in world economy and global supply chain. The rest of the world must join efforts to resolutely oppose and retaliate the new, more dangerous challenge to dispel the shock and safeguard their own economy and trade.

China stands and will continue to stand at the forefront to fight against the Section 301 investigation and tariff. The spokespersons of Ministry of Commerce and Foreign Ministry of China have both expressed firm opposition and will continue to demand total scrap of all the tariffs. Compared with a year earlier when the ‘reciprocal tariff’ stick was raised, Washington has little bargain over China. Its tariff on China did almost zero in damaging China’s foreign trade. During the first two months of 2026, Chinese global export shot up 21.8 percent year-on-year. Its exports to the U.S. fell by 11.0 percent, or a net $8.32 billion, but increased by $124.95 billion to the rest of the world, leaving America’s share at only 10.2 percent. Meanwhile, the U.S. exports to China fell more sharply by 26.7 percent, to $19.40 billion, a meagre 4.4 percent of Chinese total imports.

The only correct pathway for Washington is to work together with China on the base of equality, mutual respect and mutual benefit. Based on the latest Paris consultation, both sides should proceed with candid dialogues and practical cooperation to lay a solid foundation for President Trump’s China visit, as well as for a stable trade relationship in 2026 and beyond.

The article reflects the author’s opinions, and not necessarily the views of China Focus.