Updated December 6, 2021
Section 301 of the Trade Act of 1974
Section 301 of the Trade Act of 1974 grants the Office of
restricts” U.S. commerce. The statute defines “commerce”
the United States Trade Representative (USTR) a range of
to include goods, services, and investment.
responsibilities and authorities to investigate and take
Procedures for Section 301 Action
action to enforce U.S. rights under trade agreements and
Sections 302 through 309 describe the procedural
respond to certain foreign trade practices. Prior to the
requirements and limitations for Section 301 actions.
Trump Administration and since the establishment of the
World Trade Organization (WTO) in 1995, the United
Administration. Section 301 investigations are conducted
States used Section 301 authorities primarily to build cases
by a “Section 301 Committee”—a subordinate, staff-level
and pursue dispute settlement at the WTO. Former
body of the USTR-led, interagency Trade Policy Staff
President Trump was more willing to act unilaterally under
Committee (TPSC). The Section 301 Committee reviews
these authorities.
Section 301 petitions, conducts public hearings, and makes
recommendations to the TPSC regarding potential actions
The Trump Administration attributed this shift in policy to
under Section 301. The USTR then bases its final decision
its determination to close a persistent gap between U.S. and
on the recommendations provided by the TPSC.
foreign government practices that it said disadvantaged
U.S. firms. In addition, it justified many of its tariff
Initiation. The USTR may initiate a Section 301 case as a
actions—particularly those against China—by pointing to
result of a petition or can “self-initiate” a case. Any
alleged weaknesses in WTO dispute settlement procedures
interested person may file a petition with the USTR
and the inadequacy or nonexistence of WTO rules to
requesting that the agency take action under Section 301.
address certain Chinese trade practices. It also cited the
Within 45 days of the receipt, the USTR must review the
failure of past trade negotiations and agreements to enhance
allegations and determine whether to initiate an
reciprocal market access for U.S. firms and workers.
investigation. Section 301 also provides two means by
which the USTR may initiate an investigation in the
The recent use of Section 301 has been the subject of
absence of a petition. It can investigate any matter, but only
congressional and broader international debate. In 2021, the
after consulting with appropriate stakeholders. (Rules for
Biden Administration took a number of steps to eliminate
intellectual property rights [IPR] cases initiated through
certain foreign practices and policies that were the subject
“Special 301” differ somewhat from those that govern
of Section 301 investigations. The Administration continues
standard Section 301 investigations.)
to review U.S. trade actions against China, and so far, it has
announced the potential reinstatement of certain Section
Consultations. Upon initiating an investigation, the
301 tariff exclusions on U.S. imports from China.
USTR must request consultations with the targeted foreign
Overview of Section 301
government regarding the issues raised. If the investigation
involves a trade agreement and a mutually acceptable
Title III of the Trade Act of 1974 (Sections 301 through
resolution is not reached, the USTR mus t request formal
310, 19 U.S.C. §§2411-2420), titled “Relief from Unfair
Trade Practices,” is often collectively referred to as
dispute settlement proceedings under the governing trade
“Section 301.” Section 301 provides a statutory means by
agreement (WTO or potential U.S. free trade agreement). In
the past, with regard to investigations that do not involve an
which the United States imposes trade sanctions on foreign
agreement, the USTR has initiated investigations while
countries that violate U.S. trade agreements or engage in
acts that are “unjustifiable” or “unreasonable” and burden
simultaneously requesting consultations with the foreign
government and seeking information and advice from
U.S. commerce. Prior to 1995, the United States used
appropriate trade advisory committees. If an investigation
Section 301 extensively to pressure other countries to
includes “mixed” issues, some of which are covered by an
eliminate trade barriers and open their markets to U.S.
agreement and some of which are not, the USTR generally
exports. The creation of an enforceable dispute settlement
pursues consultations within the agreement framework and
mechanism in the WTO, strongly supported by the United
through bilateral negotiations.
States, significantly reduced U.S. use of Section 301. While
the United States retains the flexibility to seek recourse for
Determinations and Implementation. Following
foreign unfair trade practices in the WTO or under Section
consultations, the USTR begins its investigation to
301, a determination to bypass WTO dispute settlement and
determine if the alleged conduct is unfair or violates U.S.
impose retaliatory measures (if any) in response to a
rights under trade agreements. If the USTR’s determination
Section 301 investigation may be challenged at the WTO.
is affirmative, it then decides what action, if any, to take
Section 301 Investigations
(subject to the direction of the President, if any). Section
301 divides such actions into mandatory and discretionary
While the law does not limit the scope of investigations, it
categories. Mandatory action is required if the USTR
cites several types of foreign government conduct subject to
concludes that there is a trade agreement violation or that an
Section 301 action, including (1) a violation that denies
act, policy, or practice of a foreign government is
U.S. rights under a trade agreement, (2) an “unjustifiable”
action that “burdens or restricts” U.S. commerce, and (3) an
“unjustifiable” and “burdens or restricts” U.S. commerce. If
“unreasonable” or “discriminatory” action that “burdens or
an investigation involves an alleged violation of a trade
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Section 301 of the Trade Act of 1974
agreement, the USTR must make its final determinations 30
example, S. 1260). Congress could also request an
days after the date on which the dispute settlement
economic impact study of how such actions may affect the
procedure concludes. Generally, in cases not involving
U.S. economy, supply chains, and the multilateral trade
trade agreements, the USTR must make its determinations
system.
within 12 months after an investigation begins.
Upon making an affirmative determination to take
Recent Section 301 Investigations

retaliatory action, the USTR must implement that action
China
within 30 days. Waivers are allowed for mandatory actions
Date of Initiation. August 2017.
Issue. China’s technology transfer, IP, and innovation policies/practices.
and implementing timelines.
Finding. Four Chinese IPR-related practices are unreasonable (or
Retaliatory Action. To remedy a foreign trade practice,
discriminatory) and burden (or restrict) U.S. commerce.
Action Taken. Additional tarif s, ranging from 7.5% to 25%, on
Section 301 authorizes the USTR to (1) impose duties or
approximately $370 bil ion worth of U.S. imports from China.
other import restrictions, (2) withdraw or suspend trade
WTO Procedures. WTO case DS542. (See also DS543 / DS565 / DS587.)
agreement concessions, or (3) enter into a binding

European Union
agreement with the foreign government to either eliminate
Date of Initiation. April 2019.
the conduct in question (or the burden to U.S. commerce) or
Issue. EU (including the UK) subsidies on large civil aircraft; violation of
U.S. rights under the WTO Agreement; and EU’s failure to implement
compensate the United States with satisfactory trade
WTO Dispute Settlement (DS) panel recommendations concerning
benefits. The USTR must give preference to duties (i.e.,
certain subsidies to the EU large civil aircraft industry.
tariffs), if action is taken in the form of import restrictions.
Finding. EU and certain member states have denied U.S. rights under the
The level of mandatory action under Section 301 should
WTO Agreement and have failed to bring WTO-inconsistent subsidies
“affect goods or services of the foreign country in an
into compliance with WTO rules.
Action Taken. Suspended (March 2021). Additional tarif s of 15% or 25%
amount equivalent in value to the burden or restriction
on $7.5 bil ion worth of U.S. imports from the EU.
being imposed by that country on” U.S. commerce.
WTO Procedures. WTO case DS316. (See also DS353.)
Latest Development. Agreements reached with the EU and UK, as part
Subsequent Actions. Sections 306 and 307 specify the
of which the action wil be suspended for five years (July 2021).
requirements for monitoring, modifying, and terminating

France
any action taken under Section 301. Notably, foreign
Date of Initiation. July 2019.
noncompliance with a measure or agreement undertaken as
Issue. France’s digital services tax (DST).
Finding. The DST discriminates against major U.S. digital companies and is
a result of a Section 301 investigation is considered a
inconsistent with prevailing international tax policy principles.
violation of an agreement under Section 301 and subject to
Action Taken. Suspended (July 2020). Additional tarif s of 25% on $1.3
mandatory retaliatory action. Section 301 actions terminate
bil ion worth of U.S. imports from France.
Latest Development. Action terminated (November 2021). Political
automatically after four years, unless the USTR receives a
compromise reached on a transitional approach to France’s DST while
request for continuation and conducts a review of the case.
implementing Pil ar 1 of the OECD/G20 Inclusive Framework on Base
In addition, in some cases, the USTR may reinstate a
Erosion and Profit Shifting (“OECD/G20 Framework”).

previously terminated Section 301 action.
Foreign Digital Services Taxes
Section 301 Cases
Date of Initiation. July 2020.
Issue. The DSTs adopted or under consideration by Austria, Brazil, the
There have been 130 cases under Section 301 since the
Czech Republic, the EU, India, Indonesia, Italy, Spain, Turkey, and the UK.
law’s enactment in 1974, of which 35 have been initiated
Findings. Investigations with respect to four jurisdictions (Brazil, the
since the WTO’s establishment in 1995. These cases have
Czech Republic, the EU, and Indonesia) were terminated because their
DSTs either had not been adopted or not implemented (March 2021).The
primarily targeted the European Union (EU), Canada,
DSTs of six countries (Austria, India, Italy, Spain, Turkey, and the UK)
Japan, and South Korea. Prior to 2017, the last Section 301
discriminate against major U.S. digital companies and are inconsistent with
investigation took place in 2013 and involved Ukraine’s
prevailing international tax policy principles (January 2021).
practices regarding IPR. Given the political situation in
Action Taken. Suspended (June 2021). Additional tarif s of 25% on
approximately $2.1 bil ion worth of U.S. imports from the six countries.
Ukraine, the USTR determined that no action was
Latest Development. Action terminated (November 2021). Political
appropriate at the time. The last investigation prior to the
compromise reached on a transitional approach to the six countries’ DSTs
Trump Administration resulting in retaliation (i.e., tariffs)
while implementing Pil ar 1 of the OECD/G20 Framework.

took place in 2009 and involved Canada’s compliance with
Vietnam
the 2006 U.S.-Canada Softwood Lumber Agreement.
Date of Initiation. October 2020.
Issue. Vietnam’s policies/practices related to the valuation of its currency.
During the Trump Administration, the USTR initiated six
Finding. Vietnam’s investigated policies/practices, including excessiv e
new investigations (see text box). Two investigations
foreign exchange market interventions, taken in their totality, are
resulted in the imposition of tariffs: on U.S. imports from
unreasonable and burden or restrict U.S. commerce.
Action Taken. None. The USTR determined that the agreement reached
China and the EU. The U.S. action against the EU—unlike
by the U.S. Department of the Treasury and the State Bank of Vietna m
that against China—was based on a WTO dispute in which
provides a satisfactory resolution to the matter subject to the investigation
the USTR anticipated being allowed to retaliate.
and that no action is currently warranted (July 2021).
Vietnam
Issues for Congress
Date of Initiation. October 2020.
Since 1995, the United States has addressed most trade
Issue. Vietnam’s policies/practices related to the import and use of timber
disputes bilaterally and multilaterally, including through the
that is il egal y harvested or traded.
Action Taken. None. The USTR determined that the investigated
WTO. While some Members support recent Section 301
policies/practices are not actionable in light of the Vietnam-U.S. Agreemen t
actions or call for more active use of trade authorities,
on Il egal Logging and Timber Trade and that no action is currently
others have decried such unilateral actions as an undesirable
warranted (October 2021).
shift in U.S. trade policy. Congress could consider

amending Section 301 to require greater consultation or
Andres B. Schwarzenberg, Analyst in International Trade
approval before a President takes new trade actions, or to
establish a formal product exclusion process (see, for
and Finance
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Section 301 of the Trade Act of 1974

IF11346


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https://crsreports.congress.gov | IF11346 · VERSION 13 · UPDATED

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