Section 301 of the Trade Act of 1974



Updated August 31, 2020
Section 301 of the Trade Act of 1974
Section 301 of the Trade Act of 1974 (19 U.S.C. §2411)
discretion. However, the USTR’s decision to bypass WTO
grants the U.S. Trade Representative (USTR) a range of
dispute settlement and impose retaliatory measures (if any),
responsibilities and authorities to investigate and take
may be challenged at the WTO.
action to enforce U.S. rights under trade agreements and
Section 301 Investigations
respond to certain foreign trade practices. Prior to the
While the law does not limit the scope of investigations, it
Trump Administration and since the conclusion of the
cites three types of foreign government conduct subject to
Uruguay Round of multilateral trade negotiations in 1995,
Section 301 action: (1) a violation that denies U.S. rights
which established the World Trade Organization (WTO),
under a trade agreement, (2) an “unjustifiable” action that
the United States has used Section 301 authorities primarily
“burdens or restricts” U.S. commerce, and (3) an
to build cases and pursue dispute settlement at the WTO.
“unreasonable” or “discriminatory” action that “burdens or
However, President Trump has been more willing to act
restricts” U.S. commerce. The statute defines “commerce”
unilaterally under these authorities to promote what the
to include goods, services, and investment.
Administration considers to be “free,” “fair,” and
“reciprocal” trade. The Trump Administration’s use of
Procedures for Section 301 Action
Section 301 has been the subject of congressional and
Sections 302 through 309 describe the procedural
broader international debate.
requirements and limitations for Section 301 actions.
The Administration has attributed this shift in policy to a
Administration. Section 301 investigations are conducted
large and persistent gap between U.S. and foreign
by a “Section 301 Committee”—a subordinate, staff-level
government practices that may disadvantage or discriminate
body of the USTR-led, interagency Trade Policy Staff
against U.S. firms. In addition, the Administration has
Committee (TPSC). The Section 301 Committee reviews
justified many of its recent tariff actions—particularly those
Section 301 petitions, conducts public hearings, and makes
against China—by pointing to alleged weaknesses in WTO
recommendations to the TPSC regarding potential actions
dispute settlement procedures and the inadequacy or
under Section 301. The USTR then bases its final decision
nonexistence of WTO rules to address certain Chinese trade
on the recommendations provided by the TPSC.
practices. It has also cited the failure of past trade
Initiation. The USTR may initiate a Section 301 case as a
negotiations and agreements to enhance reciprocal market
result of a petition or can “self-initiate” a case. Any
access for U.S. firms and workers.
interested person may file a petition with the USTR
Overview of Section 301
requesting that the agency take action under Section 301.
Title III of the Trade Act of 1974 (Sections 301 through
Within 45 days of the receipt, the USTR must review the
310, 19 U.S.C. §§2411-2420), titled “Relief from Unfair
allegations and determine whether to initiate an
Trade Practices,” is often collectively referred to as
investigation. Section 301 also provides two means by
“Section 301.” Section 301 provides a statutory means by
which the USTR may initiate an investigation in the
which the United States imposes trade sanctions on foreign
absence of a petition. It can investigate any matter, but only
countries that violate U.S. trade agreements or engage in
after consulting with appropriate stakeholders. In addition,
acts that are “unjustifiable” or “unreasonable” and burden
the USTR is generally required to initiate a Section 301
U.S. commerce. Prior to 1995, the United States used
investigation of any country—within 30 days—after
Section 301 extensively to pressure other countries to
identifying it as a “Special 301” “Priority Foreign
eliminate trade barriers and open their markets to U.S.
Country.” In its annual Special 301 report, the USTR
exports. The creation of an enforceable dispute settlement
identifies countries that do not provide adequate intellectual
mechanism in the WTO, strongly advocated by the United
property rights (IPR) protection and enforcement. (Rules
States, significantly reduced U.S. use of Section 301.
for IPR cases initiated through Special 301 differ somewhat
from those that govern standard Section 301 investigations.)
The United States retains the flexibility to determine
whether to seek recourse for foreign unfair trade practices
Consultations. Upon initiating an investigation, the
in the WTO and/or act unilaterally. The Statement of
USTR must request consultations with the targeted foreign
Administrative Action (SAA)—which explained how U.S.
government regarding the issues raised. If the investigation
agencies would implement the Uruguay Round Agreements
involves a trade agreement and a mutually acceptable
Act (URAA or “WTO Agreements”)—states that the USTR
resolution is not reached, the USTR must request formal
will invoke the dispute settlement procedures of the WTO
dispute settlement proceedings under the governing trade
Dispute Settlement Understanding (DSU) for investigations
agreement (WTO or potential U.S. free trade agreement). In
that involve an alleged violation of (or the impairment of
the past, with regard to investigations that do not involve an
U.S. benefits under) WTO Agreements. At the same time,
agreement, the USTR has initiated investigations while
the SAA makes clear that “[n]either section 301, nor the
simultaneously requesting consultations with the foreign
DSU will require the” USTR to do so if it “does not
government and seeking information and advice from
consider that a matter involves” WTO Agreements. Such a
appropriate trade advisory committees. If an investigation
determination appears to be solely at the USTR’s
includes “mixed” issues, some of which are covered by an
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Section 301 of the Trade Act of 1974
agreement and some of which are not, the URAA SAA
U.S-Canadian understanding, the USTR suspended the
states that the USTR will pursue consultations within the
tariffs in 2010. Under President Trump, the USTR has
agreement framework and through bilateral negotiations.
initiated three new investigations.
Determinations and Implementation. Following
Recent Section 301 Investigations
consultations, the USTR begins its investigation to

China
determine if the alleged conduct is unfair or violates U.S.
Date of Initiation. August 2017.
rights under trade agreements. If the USTR’s determination
Issue. Technology transfer, IP, and innovation policies/practices.
Finding. Four Chinese IPR-related practices are unreasonable (or
is affirmative, it then decides what action, if any, to take
discriminatory) and burden (or restrict) U.S. commerce and justified U.S.
(subject to the direction of the President, if any). Section
action: (1) forced technology transfer requirements, (2) cyber-enabled
301 divides such actions into mandatory and discretionary
theft of U.S. IP and trade secrets, (3) discriminatory licensing practices, and
categories. Mandatory action is required if the USTR
(4) state-funded strategic acquisition of U.S. assets.
Action Taken. Five major tariff actions since May 2018. Approximately
concludes that there is a trade agreement violation or that an
two-thirds of U.S. imports from China are subject to increased Section 301
act, policy, or practice of a foreign government is
tariffs, ranging from 7.5% to 25%. (As part of the U.S.-China Phase One
“unjustifiable” and “burdens or restricts” U.S. commerce. If
Trade Agreement, the USTR announced reductions for certain tariff rates
an investigation involves an alleged violation of a trade
effective February 2020.)
WTO Procedures. Panel established to review China’s technology
agreement, the USTR must make its final determinations 30
licensing requirements (November 2018); proceedings suspended at the
days after the date on which the dispute settlement
request of the United States (June 2019). (Since April 2018, China has filed
procedure concludes. Generally, in cases not involving
three WTO cases chal enging Section 301 tariffs.)

trade agreements, the USTR must make its determinations
European Union
within 12 months after an investigation begins.
Date of Initiation. April 2019.
Issue. EU subsidies on large civil aircraft; violation of U.S. rights under the
Upon making an affirmative determination to take
WTO Agreement; EU’s failure to implement WTO Dispute Settlement
retaliatory action, the USTR must implement that action
(DS) panel recommendations concerning certain subsidies to the EU large
civil aircraft industry.
within 30 days. Waivers are allowed for mandatory actions
Finding. EU and certain member states have denied U.S. rights under the
and implementing timelines.
WTO Agreement and have failed to bring WTO-inconsistent subsidies
Retaliatory Action.
into compliance with WTO rules.
To remedy a foreign trade practice,
Action Taken. Additional tariffs of 15% or 25% on $7.5 bil ion worth of
Section 301 authorizes the USTR to (1) impose duties or
EU imports—consistent with the WTO arbitrator’s finding on the
other import restrictions, (2) withdraw or suspend trade
appropriate level of countermeasures. The USTR initial y imposed the
agreement concessions, or (3) enter into a binding
tariffs in October 2019; since then, it has revised the action twice (in
February and August 2020).
agreement with the foreign government to either eliminate
WTO Procedures. For an overview, see WTO Case “DS316.”
the conduct in question (or the burden to U.S. commerce) or

France
compensate the United States with satisfactory trade
Date of Initiation. July 2019.
benefits. The USTR must give preference to duties (i.e.,
Issue. France’s new digital services tax (DST).
Finding. DST discriminates against major U.S. digital companies and is
tariffs), if action is taken in the form of import restrictions.
inconsistent with prevailing international tax policy principles.
The level of mandatory action under Section 301 should
Action Taken. Suspended. Additional tariffs of 25% on $1.3 bil ion worth
“affect goods or services of the foreign country in an
of French imports, but their application was suspended until January 2021.
amount equivalent in value to the burden or restriction
(The United States is also participating in ongoing OECD negotiations to
being imposed by that country on” U.S. commerce.
reach a compromise on international digital taxation.)

WTO Procedures. None (as of August 2020).
Subsequent Actions.

Sections 306 and 307 specify the
Foreign Digital Services Taxes
requirements for monitoring, modifying, and terminating
Date of Initiation. July 2020.
Issue. The DSTs adopted or under consideration by Austria, Brazil, the
any action taken under Section 301. Notably, foreign
Czech Republic, the EU, India, Indonesia, Italy, Spain, Turkey, and the UK.
noncompliance with a measure or agreement undertaken as
Investigation. Ongoing. The USTR requested consultations with the
a result of a Section 301 investigation is considered a
foreign governments involved and sought public comments (June 2020).
violation of an agreement under Section 301 and subject to
Action Taken. None (as of August 2020).
WTO Procedures. None (as of August 2020).
mandatory retaliatory action. Section 301 actions terminate
automatically after four years, unless the USTR receives a
Issues for Congress
request for continuation and conducts a review of the case.
Since 1995, the United States has addressed most trade
In addition, in some cases the USTR may reinstate a
disputes bilaterally and multilaterally, including through the
previously terminated Section 301 action.
WTO. While some Members applaud the Administration’s
Section 301 Cases
Section 301 actions or call for more active use of trade
There have been 128 cases under Section 301 since the
authorities, others have decried such unilateral actions as an
law’s enactment in 1974, of which 33 have been initiated
undesirable shift in U.S. trade policy. Congress could
since the WTO’s establishment in 1995. These cases have
consider amending Section 301 to require greater
primarily targeted the European Union (EU), concerning
consultation or approval before a president takes new trade
mostly agricultural trade. The EU is followed by Canada,
actions, or to establish a formal product exclusion process.
Japan, and South Korea. Prior to 2017, the last Section 301
Congress could also request an economic impact study of
investigation took place in 2013 and involved Ukraine’s
how such actions may affect the U.S. economy, global
practices regarding IPR. Given the political situation in
supply chains, and the multilateral trade system.
Ukraine, the USTR determined that no action was
appropriate at the time. The last investigation prior to the
Andres B. Schwarzenberg, Analyst in International Trade
Trump Administration resulting in retaliation (i.e., tariffs)
and Finance
took place in 2009 and involved Canada’s compliance with
the 2006 U.S.-Canada Softwood Lumber Agreement. Per a
IF11346
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Section 301 of the Trade Act of 1974


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