Multiple parties oppose the new round of US trade investigation: 'overcapacity' is a false proposition, without factual basis and contrary to economic logic

On the 11th local time, the Office of the United States Trade Representative announced that it will launch a new round of "301 investigations" on 16 major trading partners, including China, the European Union, Mexico, India, Japan, South Korea, and Thailand, regarding the issue of "excess industrial capacity". Bloomberg stated that this move aims to pave the way for the introduction of new tariff measures to replace the "equivalent tariffs" that have been overturned by the US Supreme Court. The unilateral approach of the United States, which violates international trade rules, has been questioned and opposed by many countries. Chinese Foreign Ministry spokesperson Guo Jiakun stated on the 12th that China's position on handling Sino US economic and trade issues is consistent and clear, and opposes all forms of unilateral tariff measures. He said that tariff wars and trade wars do not serve the interests of either party, and both sides should negotiate and resolve relevant issues on the basis of equality, respect, and mutual benefit. The so-called 'overcapacity' is a false proposition, and China opposes using it as an excuse for political manipulation.

Regarding the "301 investigation", US Trade Representative Greer stated on the 11th that the above-mentioned countries have flooded the global market with low-priced goods through subsidies, which has harmed the interests of US producers. According to US media analysis, the investigation is likely to lead to the United States imposing higher tariffs on dozens of countries.

Due to the previous ruling by the US Supreme Court that "equivalent tariffs" were unconstitutional, the US government plans to use measures based on Section 301 of the 1974 Trade Act as an alternative. Currently, the United States has imposed an additional tariff of 10% on countries for a period of 150 days under Section 122 of the law as a transitional measure during the "301 investigation" period. The Wall Street Journal reported that the "301 investigation" usually takes months or even years, but Greer said that his team will strive to complete the investigation before the temporary tariffs expire in mid July, and the final tariff rate will be determined after the investigation is completed.

Faced with the US move, multiple trading partners have responded one after another. European Parliament Trade Committee Chairman Lang stated on the 12th that the EU only accepts a new round of tariff measures that "reproduce" the trade agreement reached between the two sides in Scotland last year, and any deviation is "unacceptable".

According to Nikkei Chinese website, for Japan and South Korea that have already reached a trade agreement with the United States, Greer stated that if both sides wish to maintain the agreement, relevant factors will be considered, but there is no guarantee of tariff exemptions. Japan has made a request to the United States, hoping that the new measures will not be more unfavorable than the 2025 Japan US agreement. But some argue that the US investigation is equivalent to a trial with predetermined conclusions.

On the 12th, the South Korean Blue House responded that the US intends to restore the original relevant tax levels through the "301 investigation". The South Korean side will actively negotiate with the US to ensure that the balance of interests in the existing South Korean US tariff agreement is not disrupted, and strive to obtain treatment no less favorable than other major countries.

But several South Korean media criticized the US trade policy for showing a clear tendency of "political logic overwhelming economic logic". According to the Korean Economy, the US blames its trade deficit and manufacturing decline on other countries' "overcapacity", which has no factual basis and goes against economic logic. In fact, the US trade deficit stems from its own consumption and fiscal structure, but is used as an excuse to impose tariffs. According to experts cited by Yonhap News Agency, the essence of this "301 investigation" is to pave the way for restarting the "equivalent tariffs" that were rejected by the court. In the future, it may become a tool for imposing tariffs on products such as automobiles and semiconductors, and there is a suspicion of "drawing conclusions first and finding evidence later".

The Thai Ministry of Commerce quickly established a working group to respond to the "301 investigation". Alada, Director General of the Foreign Trade Department of the Thai Ministry of Commerce, told Reuters on the 12th that the Thai side will initiate negotiations as soon as possible, prepare relevant documents in detail, and ensure sufficient response to the investigation.

The 301 tariff measures cannot solve the problems of the US trade deficit and manufacturing outflow, but will instead undermine the stability of the global supply chain and trade order, causing serious negative impacts on the global economy. Huo Jianguo, Vice President of the China World Trade Organization Research Association, told Global Times reporters on the 12th that international trade is based on the comparative advantages of various countries to form division of labor and cooperation, and to allocate resources according to market rules. The outflow of US manufacturing and trade imbalance stem from its own industrial upgrading and the rise of production factor costs. It should seek the root cause of the problem from itself. The unilateral imposition of tariffs on trade protectionism is harmful to others and not beneficial to oneself, and will inevitably be widely opposed by all countries.

Gao Lingyun, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, said that "overcapacity" itself is a false proposition, and the global industrial division of labor determines that countries have different manufacturing and consumption priorities, which is a normal feature of market economy and global division of labor system. On the one hand, the United States enjoys high-quality and affordable products from other countries, while on the other hand, it complains about "overcapacity", which is contradictory; Forcing businesses to relocate back to the United States through administrative means and political pressure will only increase production costs and ultimately harm the interests of American consumers.