Section 301 of the Trade Act of 1974 is the law behind some of the most aggressive U.S. tariff actions of the past quarter century. It lets the president take “all appropriate action” against a foreign government whose policies break a trade agreement or are unjustified, unreasonable or discriminatory, and that hold back American commerce. The tools include tariffs and measures that have nothing to do with duties.
Who starts a case matters. The U.S. Trade Representative can open one on its own. A company or an industry group can also file a petition and force the question.
Once an investigation is open, the USTR has to try for a deal first, either by getting the foreign country to drop the barrier or by arranging compensation. Where a trade agreement is involved, the office must ask for the formal dispute process that agreement provides.
No waiting on Geneva
The statute does not make Washington hold off until the World Trade Organization signs off. In practice the U.S. has also pledged to take disputes under WTO agreements through the WTO’s own settlement system, which runs on its own timetable. A WTO panel looked at Sections 301-310 in the 1990s after a challenge from other members. The challenge was rejected, but the panel said that acting against a WTO member without first securing approval under the dispute rules would itself break the WTO Agreement.
Intellectual property gets its own track. Each year the USTR issues a Special 301 Report that names countries with weak protection for rights holders. A country placed on the watchlist for breaking a trade agreement can face dispute proceedings at the WTO or under a free trade agreement. The U.S. can also impose unilateral sanctions.
Super 301
Congress added a tougher version through the Omnibus Foreign Trade and Competitiveness Act. For 1989 and 1990 it told the USTR to name priority countries and the practices that most limited U.S. exports, then open a Section 301 case against each. The original provisions expired in 1991.
President Bill Clinton revived them by executive order for 1994 and 1995, and a later order carried them through 1997. They were idle in 1998. On March 31, 1999, an order reinstated Super 301 for three years in revised form, requiring the USTR to issue its report by April 30 and to start cases if no agreement came within 90 days.
The results were thin. The April 1999 and April 2000 reports named no priority practices, though the USTR said it would open cases against trade practices in several countries. In April 2001 it again made no designations but reported that consultations had been requested with Mexico over live swine imports, with Belgium over rice restrictions and with the European Union over surcharges on corn gluten feed.
How it has been used
On December 20, 2001, the U.S. imposed sanctions on Ukraine under Section 301, including tariffs on metals, footwear and other imports. The USTR had concluded that Ukraine was failing to enforce copyright on music CDs and their export.
In March 2018 the Trump administration used the law against China, which set off the 2018 China-United States trade dispute.
