USTR has launched 2 investigations under Section 301 of the Trade Act of 1974 to examine manufacturing overcapacity and forced labor practices affecting US industries
The overcapacity probe covers sectors such as solar modules, batteries, semiconductors, and glass, where the US says excess production abroad is exported and increases competition for domestic manufacturers
Several economies are part of the investigation, including China, the European Union, India, Vietnam, Japan, and Mexico
A separate probe will assess whether trading partners are effectively enforcing bans on goods made with forced labor, particularly in supply chains linked to solar products and materials
The United States Trade Representative (USTR) announced 2 new investigations under Section 301 of the Trade Act of 1974 on March 11 and 12, 2026. One of these investigations relates to structural manufacturing overcapacity and trade practices across industries, including solar, linked to major US trading partners and other economies, which impacts US businesses. The other investigation concerns forced labor.
In simple terms, the US says its trading partners are producing more goods than they can consume domestically. Extra capacity is then exported to other countries, including the US, thus creating strong competition for the US manufacturers. While this discourages local US manufacturers from expanding their capacity, it also allows foreign competitors to move ahead.
According to the USTR, a wide range of industries face excess capacity and overproduction, including solar modules, batteries, energy goods, glass, and semiconductors. In several of these sectors, the United States has lost significant domestic production capacity or has fallen behind foreign competitors.
Among the economies that are subject to these investigations are China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India.
The new Section 301 investigations will determine whether the acts, policies, and practices of various economies are ‘unreasonable or discriminatory’ and whether they ‘burden or restrict’ US commerce, explains the USTR.
The USTR notice, published in the Federal Register, singles out India, where it says evidence of structural excess capacity and production exists. “For example, evidence suggests the solar module sector is plagued by excess capacity, including that India's current module manufacturing is nearly triple annual domestic demand. India also has created significant excess capacity in petrochemicals, steel, and other industries,” reads the notice.
“The United States will no longer sacrifice its industrial base to other countries that may be exporting their problems with excess capacity and production to us. Today’s investigations underscore President Trump’s commitment to reshore critical supply chains and create good-paying jobs for American workers across our manufacturing sectors,” said United States Trade Representative Jamieson Greer.
India’s solar module production capacity had reached nearly 144 GW, according to The Energy and Resources Institute (TERI), as shared by the team at TaiyangNews Solar Technology Conference India 2026 (STC.I 2026) in February this year. It must use this capacity to expand its export presence beyond the US, added TERI’s Alekhya Datta and Aniket Tiwari (see STC.I 2026: Continuing India’s Solar PV Manufacturing Momentum).
The other USTR investigation under Section 301 relates to the failure of countries tio effectively enforce a ban on the import of goods produced with forced labor that burdens or restricts US industries. The list includes 60 of the US’s largest trading partners, comprising 34 downstream goods produced with forced labor, including solar products.
He added, “These investigations will determine whether foreign governments have taken sufficient steps to prohibit the importation of goods produced with forced labor and how the failure to eradicate these abhorrent practices impacts U.S. workers and businesses.”
The US has banned imports of goods mined, produced, or manufactured in China’s Xinjiang region under the Uyghur Forced Labor Prevention Act (UFLPA), citing concerns over forced labor. Since Xinjiang is a major polysilicon production hub, the US requires importers to ensure they do not import any goods with a trace of forced labor (see UFLPA Comes Into Force In The US).
China’s Ministry of Commerce, in a media briefing, commented on the new US investigation against China regarding forced labor.
“By initiating Section 301 investigations against China and other relevant economies at this juncture—in an attempt to construct trade barriers—the U.S. side is engaging in conduct that is highly unilateral, arbitrary, and discriminatory; this constitutes a textbook example of protectionism,” stated the Chinese Commerce Ministry Spokesperson.
Depending on the results of these investigations, solar imports into the US could face heightened scrutiny or lead to other trade restrictions in the future.
The US President Donald Trump-led administration launched these new investigations following the country’s Supreme Court quashing its global tariffs imposed on various countries through the course of 2025. Trump imposed a global 10% import tariff following the court’s ruling. It will remain in effect for up to 150 days unless extended by Congress.
The US already has Section 301 tariffs in place, blocking certain Chinese imports into the US, with some exclusions (see US Extends Section 301 Tariff Exclusions For Solar PV).