Updated May 13, 2024
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 than previous officials to
Committee (TPSC). The Section 301 Committee reviews
act unilaterally under 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 receipt, the agency 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. In the absence of a petition, the USTR can
also investigate any matter, but only after consulting with
The recent use of Section 301 has been the subject of
appropriate stakeholders. In addition, the USTR is generally
congressional and broader international debate. In 2021, the
required to initiate an investigation of any country—within
Biden Administration took a number of steps to eliminate
30 days—after identifying it as a “Special 301” “Priority
certain foreign practices and policies that were the subject
Foreign Country.” (Rules for intellectual property rights
of Section 301 investigations. The Administration continues
[IPR] cases initiated through “Special 301” differ somewhat
to review its strategy for China, and so far, it has extended
from those that govern standard Section 301 investigations.)
and reinstated certain tariff exclusions and is conducting a
review of all Section 301 actions against China.
Consultations. Upon initiating an investigation, the
Overview of Section 301
USTR must request consultations with the targeted foreign
government regarding the issues raised. If the investigation
Title III of the Trade Act of 1974 (Sections 301-310, 19
involves a trade agreement and a mutually acceptable
U.S.C. §§2411-2420), titled “Relief from Unfair Trade
Practices,” is often collectively referred to as “Section 301.”
resolution is not reached, the USTR must request formal
dispute settlement proceedings under the governing trade
Section 301 provides a statutory means by which the United
agreement (WTO or potential U.S. free trade agreement). In
States imposes trade sanctions on foreign countries that
the past, with regard to investigations that do not involve an
violate U.S. trade agreements or engage in acts that are
“unjustifiable” or “unreasonable” and burden U.S.
agreement, the USTR has initiated investigations while
simultaneously requesting consultations with the foreign
commerce. Prior to 1995, the United States used Section
government and seeking information and advice from
301 extensively to pressure other countries to eliminate
appropriate trade advisory committees. If an investigation
trade barriers and open their markets to U.S. exports. The
includes “mixed” issues, some of which are covered by an
creation of an enforceable dispute settlement mechanism in
agreement and some of which are not, the USTR generally
the WTO, strongly supported by the United States,
pursues consultations within the agreement framework and
significantly reduced U.S. use of Section 301. While the
through bilateral negotiations.
United States retains the flexibility to seek recourse for
foreign unfair trade practices in the WTO or under Section
Determinations and Implementation. Following
301, a determination to bypass WTO dispute settlement and
consultations, the USTR begins its investigation to
impose retaliatory measures (if any) in response to a
determine if the alleged conduct is unfair or violates U.S.
Section 301 investigation may be challenged at the WTO.
rights under trade agreements. If the USTR’s determination
Section 301 Investigations
is affirmative, it then decides what action, if any, to take
(subject to the direction of the President, if any). Section
While the law does not limit the scope of investigations, it
301 divides such actions into mandatory and discretionary
cites several types of foreign government conduct subject to
categories. Mandatory action is required if the USTR
Section 301 action, including (1) a violation that denies
concludes that there is a trade agreement violation or that an
U.S. rights under a trade agreement, (2) an “unjustifiable”
action that “burdens or restricts” U.S. commerce, and (3) an
act, policy, or practice of a foreign government is
“unjustifiable” and “burdens or restricts” U.S. commerce.
“unreasonable” or “discriminatory” action that “burdens or
If
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Section 301 of the Trade Act of 1974
an investigation involves an alleged violation of a trade
Members may review and use the results of that
agreement, the USTR must make its final determinations 30
investigation, released in 2023, to inform oversight of trade
days after the date on which the dispute settlement
policy and potential legislative changes to Section 301.
procedure concludes. Generally, in cases not involving
trade agreements, the USTR must make its determinations
Recent Section 301 Investigations
within 12 months after an investigation begins.
China
Date of Initiation. August 2017.
Upon making an affirmative determination to take
Issue. China’s technology transfer, IP, and innovation policies/practices.
retaliatory action, the USTR must implement that action
Finding. Four Chinese IPR-related practices are unreasonable (or
within 30 days. Waivers are allowed for mandatory actions
discriminatory) and burden (or restrict) U.S. commerce.
and implementing timelines.
Action Taken. Additional tariffs, ranging from 7.5% to 25%, on
approximately $370 billion worth of U.S. imports from China.
Retaliatory Action. To remedy a foreign trade practice,
WTO Procedures. WTO case DS542. (See also DS543 | DS565 | DS587.)
Section 301 authorizes the USTR to (1) impose duties or
European Union
other import restrictions, (2) withdraw or suspend trade
Date of Initiation. April 2019.
Issue. EU (including the UK) subsidies on large civil aircraft; violation of
agreement concessions, or (3) enter into a binding
U.S. rights under the WTO agreement; and EU’s failure to implement
agreement with the foreign government to either eliminate
WTO dispute settlement panel recommendations concerning certain
the conduct in question (or the burden to U.S. commerce) or
subsidies to the EU large civil aircraft industry.
Finding. EU and certain member states have denied U.S. rights under the
compensate the United States with satisfactory trade
WTO agreement and have failed to bring WTO-inconsistent subsidies into
benefits. The USTR must give preference to duties (i.e.,
compliance with WTO rules.
tariffs) if action is taken in the form of import restrictions.
Action Taken. Suspended (March 2021). Additional tariffs of 15% or 25%
The level of mandatory action under Section 301 should
on $7.5 billion worth of U.S. imports from the EU.
“affect goods or services of the foreign country in an
WTO Procedures. WTO case DS316. (See also DS353.)
Latest Development. Agreements reached with the EU and UK, as part
amount equivalent in value to the burden or restriction
of which the action will be suspended for five years (July 2021).
being imposed by that country on” U.S. commerce.
France
Subsequent Actions.
Date of Initiation. July 2019.
Sections 306 and 307 specify the
Issue. France’s digital services tax (DST).
requirements for monitoring, modifying, and terminating
Finding. The DST discriminates against major U.S. digital companies and is
any action taken under Section 301. Notably, foreign
inconsistent with prevailing international tax policy principles.
noncompliance with a measure or agreement undertaken as
Action Taken. Suspended (July 2020). Additional tariffs of 25% on $1.3
billion worth of U.S. imports from France.
a result of a Section 301 investigation is considered a
Latest Development. Action terminated (November 2021). Political
violation of an agreement under Section 301 and subject to
compromise reached on a transitional approach to France’s DST while
mandatory retaliatory action. Section 301 actions terminate
implementing Pillar 1 of the OECD/G20 Inclusive Framework on Base
automatically after four years, unless the USTR receives a
Erosion and Profit Shifting (“OECD/G20 Framework”).
request for continuation and conducts a review of the case.
Foreign Digital Services Taxes
Date of Initiation. July 2020.
In addition, in some instances, the USTR may reinstate a
Issue. The DSTs adopted or under consideration by Austria, Brazil, the
previously terminated Section 301 action.
Czech Republic, the EU, India, Indonesia, Italy, Spain, Turkey, and the UK.
Section 301 Cases
Findings. Investigations with respect to four jurisdictions (Brazil, the
Czech Republic, EU, and Indonesia) were terminated because their DSTs
There have been 130 cases under Section 301 since the
had not been either adopted or implemented (March 2021).The DSTs of
law’s enactment in 1974, of which 35 have been initiated
six countries (Austria, India, Italy, Spain, Turkey, and UK) discriminate
since the WTO’s establishment in 1995. These cases have
against major U.S. digital companies and are inconsistent with prevailing
international tax policy principles (January 2021).
primarily targeted the European Union (EU), Canada,
Action Taken. Suspended (June 2021). Additional tariffs of 25% on
Japan, and South Korea. Prior to 2017, the last Section 301
approximately $2.1 billion worth of U.S. imports from the six countries.
investigation took place in 2013 and involved Ukraine’s
Latest Development. Action terminated (November 2021). Political
practices regarding IPR. Given the political situation in
compromise reached on a transitional approach to the six countries’ DSTs
while implementing Pillar 1 of the OECD/G20 Framework.
Ukraine, the USTR determined that no action was
Vietnam
appropriate at the time. The last investigation prior to the
Date of Initiation. October 2020.
Trump Administration resulting in retaliation (i.e., tariffs)
Issue. Vietnam’s policies/practices related to the valuation of its currency.
took place in 2009 and involved Canada’s compliance with
Finding. Vietnam’s investigated policies/practices, including excessive
the 2006 U.S.-Canada Softwood Lumber Agreement.
foreign exchange market interventions, taken in their totality, are
unreasonable and burden or restrict U.S. commerce.
During the Trump Administration, the USTR initiated six
Action Taken. None. The USTR determined that the agreement reached
new investigations (see text box). Two investigations
by the U.S. Department of the Treasury and the State Bank of Vietnam
resulted in the imposition of tariffs: on U.S. imports from
provides a satisfactory resolution to the matter subject to the investigation
and that no action is currently warranted (July 2021).
China and the EU. The U.S. action against the EU—unlike
Vietnam
that against China—was based on a WTO dispute in which
Date of Initiation. October 2020.
the USTR anticipated being allowed to retaliate.
Issue. Vietnam’s policies/practices related to the import and use of timber
Issues for Congress
that is illegally harvested or traded.
Action Taken. None. The USTR determined that the investigated
While some Members support recent Section 301 actions,
policies/practices are not actionable in light of the Vietnam-U.S. Agreement
others have decried them as an undesirable shift in U.S.
on Illegal Logging and Timber Trade and that no action is currently
trade policy. Congress could consider amending Section
warranted (October 2021).
301 to require greater consultation or approval before a
President takes new trade actions or to establish a formal
Andres B. Schwarzenberg, Specialist in International
product exclusion process (e.g., S. 1260). In 2022, Congress
Trade and Finance
directed the U.S. International Trade Commission to
investigate the economic impact of Section 301 tariffs.
IF11346
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Section 301 of the Trade Act of 1974
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