Following the US Supreme Court striking down the sweeping tariffs imposed by President Donald Trump, his administration has initiated an investigation into the trade policies of several countries to find potential grounds to reimpose higher tariffs. Washington has revived a lesser-known, pre-WTO legal provision used to identify and address foreign trade practices that the US deems unjustifiable, unreasonable, or discriminatory against American commerce. Section 301 of the Trade Act of 1974 was frequently utilised before the 1990s; now, the United States has returned to such pre-WTO unilateral actions. India is among the 16 nations being subjected to this probe.
In hindsight, the initial self-congratulatory exhilaration over trade negotiation progress —specifically reaching a framework for an Interim Agreement on reciprocal trade as a stepping stone to broader US-India Bilateral Trade Agreement (BTA) negotiations — appears premature. Now, contrary to official claims on both sides, it remains to be seen if India will use this opportunity to bide its time, seeking further details while navigating the probe process.
Section 301 targets “overcapacity” or structural excess capacity in production that significantly outpaces domestic and global demand. The US argument posits that these excess products are dumped into the American market, adversely affecting local industry through falling prices, the closure of industrial units, and job losses.
To protect domestic industry and employment, the US could then impose retaliatory tariffs. Indian sectors such as solar modules, steel, textiles, and automotive goods are particularly vulnerable to this probe, which is expected to be completed within the next five months to coincide with the expiry of current tariffs.
The other regulatory weapon in the US arsenal is the allegation of “forced labour” in production. This is the trade equivalent of “human rights” in geopolitics. Such a stance is somewhat hypocritical coming from the US, whose corporations have been notorious for sourcing goods from thirdworld sweatshops that employ forced labour and, in many instances, child labour.
The industries typically accused of these practices include garments, cotton, fishing, sugarcane, and cattle. India, along with other developing nations, figures prominently in these US reports.
The Trump administration intends to use these investigations to intimidate partners and coerce them into accepting its terms and conditions. As it stands, India has been criticised for failing to be assertive during negotiations — meekly accepting tariff rates, agreeing to open critical agricultural markets, and following US diktats regarding the cessation of Russian oil purchases.
Moreover, there is a clear mismatch between perceived supplication at the diplomatic level and the rhetorical bluster aimed at domestic audiences. In the coming days, such tactics will begin — if they have not already — to yield diminishing returns. The United States continues to exhibit contempt and disdain for organisations like the United Nations and the WTO, choosing instead to act unilaterally in both trade and geopolitics. The question, therefore, is whether India, with its global aspirations, truly wants to play a leadership role in mobilising the Global South as a force to be reckoned with — one that works toward the restoration of a rules-based order in international relations.