By Amanda Lee and Sherry Qin
Washington's latest trade probes target excess industrial capacity in several economies in Asia, causing concern that higher tariffs are on the way.
The Trump administration opened the investigations this week under Section 301 of the Trade Act of 1974, which allows for tariffs against nations that discriminate against U.S. companies or commerce.
The move is the administration's "Plan B" after the Supreme Court struck down previous levies under the International Emergency Economic Powers Act, said DBS strategist Philip Wee.
"By pivoting to Section 301, the USTR [United States Trade Representative office] aims to establish a more durable legal basis for tariffs before the temporary Section 122 global 10% rate expires in July," he wrote in a note.
Asian economies including China, Singapore and Thailand were named in the probe, which the trade office said will focus on economies that seem to "exhibit structural excess capacity and production in various manufacturing sectors, such as through large or persistent trade surpluses or underutilized or unused capacity."
The U.S. will hold consultations with foreign governments and provide opportunities for comment before the levies can be imposed.
Several governments in Asia have already issued statements responding to the investigations.
Late on Thursday, Singapore said that its industrial space occupancy rates are "very healthy," contrary to the USTR notice's suggestion that the city-state has continued to expand manufacturing capacity despite declining industrial occupancy.
Singapore's trade ministry said the notice flagged the city-state as having a goods and services trade surplus of $27 billion with the U.S. in 2024, but that U.S. Bureau of Economic Analysis data show that it actually ran a trade deficit of $27 billion.
The ministry went on to say that it has provided the USTR with that information and will seek clarification on the trade data and investigations.
Thailand also raised issues with the notice.
Thai officials said that a significant portion of its $51 billion trade surplus with the U.S. reflects exports by American companies that have manufacturing bases in Thailand, with profits ultimately repatriated to parent companies and shareholders, said CIMB economists in a note.
Taiwan, which was also named in the probes, said it will safeguard its interests based on the agreement it already reached with the U.S.
Taiwan's cabinet said officials have been in close contact with the USTR and the U.S. Department of Commerce, and that both sides have expressed a desire to consolidate the results of previous negotiations.
Last month, Taipei finalized a trade agreement with Washington to lower tariffs on Taiwanese goods. As part of the deal, Taiwanese semiconductor companies committed to invest at least $250 billion in the U.S. to build advanced chips.
Write to Amanda Lee at amanda.lee@wsj.com and Sherry Qin at sherry.qin @wsj.com
(END) Dow Jones Newswires
03-13-26 0051ET
