Half of U.S. Section 301 Investigations Ended Without Tariffs; Additional Duties Now Hing on Talks Over 'Overcapacity'

[Financial News] An analysis of U.S. Trade Act Section 301 cases found that half of the investigations completed over the past 10 years did not lead to actual tariff imposition. With a 12.5% tariff on forced labor-related goods recently finalized for South Korea, preventing additional duties through negotiations in the ongoing 'overcapacity' probe has emerged as a key task.
According to the Institute for International Trade and Commerce at the Korea International Trade Association (KITA) on the 26th, the Office of the United States Trade Representative (USTR) has launched 14 Section 301 investigations since the start of the first Donald Trump administration. Of those, four cases, including the overcapacity probe, are still under way. Among the 10 completed cases, retaliatory tariffs were actually imposed in only five. The other five were resolved through bilateral talks or international agreements, with tariff action delayed or the process closed after policy changes.
Section 301 allows the United States to take retaliatory measures against unfair or discriminatory foreign trade practices. In practice, however, it has often been used as leverage to force negotiations.
A representative example is China’s shipbuilding and shipping sector. The United States launched a Section 301 investigation in 2024, citing subsidies for China’s shipbuilding industry and its shipping market policies. It decided to impose port fees on Chinese-built vessels, but implementation was postponed until November this year following an agreement between the U.S. and Chinese leaders.
Vietnam was also investigated under Section 301 over its exchange-rate policy and illegal timber imports, but both cases were shifted to a monitoring regime without tariffs after negotiations. A dispute over the Digital Services Tax involving 11 countries, including France, India and Italy, also ended without actual enforcement, despite a tariff decision, as progress was made in OECD international tax talks. Tariff enforcement in the Airbus subsidy dispute involving the European Union (EU) and the United Kingdom was also suspended for a long period through negotiations.
By contrast, countries such as China, Brazil and Nicaragua, where tensions with the United States are high or room for negotiation is limited, were hit with actual retaliatory tariffs.
South Korea recently received a finalized 12.5% tariff outcome in a Section 301 case related to forced labor. After launching investigations in March into 60 economies, including South Korea, USTR set tariffs of 10% to 12.5% for each country following a public comment process. The targeted countries, including South Korea, requested tariff relief and delays, but most of those requests were rejected.
Still, some say the ongoing Section 301 investigation into overcapacity, which covers 16 economies including South Korea, could produce a different result. The forced labor tariff was driven by Washington’s urgent need to quickly replace an existing tariff framework, while the overcapacity probe may leave more room for negotiation.
The government’s agreement last year with the United States to lower reciprocal tariffs from 25% to 15% in exchange for a $350 billion investment pledge in the U.S. could also serve as a bargaining chip. If the overcapacity probe leads to additional tariffs and pushes the rate above 15%, Seoul could argue that such a move runs counter to the spirit of the existing agreement. As a result, experts say South Korea should actively use its U.S. investment plans and the Korea-U.S. shipbuilding cooperation project, MASGA, or Make American Shipbuilding Great Again.
Jeon Yoon-sik, senior researcher at KITA, said, "The announcement of the forced labor tariff was followed by expectations that the overcapacity probe results will be released soon." He added, "Since many Section 301 cases during the first Trump administration were also converted into tariff delays or monitoring after negotiations, there is still a strong chance of blocking additional tariffs through active talks."
[email protected] Jeong Sang-hee Reporter