U.S. Trade Investigations Against India and Other Economies
The U.S. government has initiated two investigations targeting India and several other countries to identify actions or policies that may be deemed “unreasonable or discriminatory” and that burden or restrict U.S. commerce. These investigations could lead to the re-implementation of tariffs.
Context and Background
- The investigations follow the U.S. Supreme Court's ruling against former President Donald Trump's use of the International Emergency Economic Powers Act (IEEPA) for imposing tariffs.
- Trump had previously imposed a 10% tariff on all imports for 150 days under Section 122 of the Trade Act of 1974, threatening to raise this to 15%.
Investigations Under Section 301(b) of the Trade Act
- The U.S. Trade Representative's (USTR) office initiated investigations against 16 economies, including India, to determine if these countries are exporting products in a way that harms American businesses.
- India was noted for having a bilateral trade surplus of $58 billion with the U.S. in 2025, though Indian data shows a $42.2 billion surplus.
- Concerns were raised about India's excess manufacturing capacity, particularly in petrochemicals, steel, and the solar module sector.
New Investigation on Forced Labor
- A second investigation was launched to examine whether 60 countries, including India, have taken sufficient measures to prohibit the import of goods produced with forced labor.
- This investigation also falls under Section 301(b) and evaluates the impact on U.S. workers and businesses.
Reactions and Implications
- Trade experts suggest these investigations may lead to new tariffs once the current 10% tariff period expires.
- The European Union has expressed concern, seeking clarity on how this investigation aligns with previous EU-U.S. agreements.
- Indian industry representatives highlight the ongoing uncertainty in sectors like textiles and apparel, exacerbated by these developments.
- However, experts caution against panic, noting the lengthy nature of these investigations.
