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Section 301 of the Trade Act of 1974
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Updated April 20,2020
Section 301 of the Trade Act of 1974 (19 U.S.C. §2411)
grants the U.S. Trade Representative (USTR) a range of
responsibilities and authorities to investigate and take
action to enforce U.S. rights under trade agreements and
respond to certain foreign trade practices. Prior to the
Trump Administration and since the conclusion of the
Uruguay Round ofmultilateral trade negotiations in 1995,
which established the World Trade Organization (WTO),
the United States has used Section 301 authorities primarily
to build cases andpursue dispute settlement at the WTO.
However, President Trump has been more willing to act
unilaterally under these authorities to promote what the
Adminis tration considers to be free, fair, and
reciprocar' trade. The Trump Administration's use of
Section 301 has been the subject of congressional and
broader international debate.
The Administrationhas attributed this shift in policy to a
large and persistent gap between U.S. and foreign
government practices thatmay disadvantageor discriminate
against U.S. firms. In addition, the Administrationhas
justified many of its recent tariff actions-particularly those
against China-by pointingto allegedweaknesses in WTO
dispute settlement procedures and theinadequacy or
nonexistenceofWTOrules to address certain Chinese trade
practices. It has also cited the failure ofp as t trade
negotiations and agreements to enhance reciprocal market
access for U.S. firms and workers.
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Title Ill of the Trade Act of 1974 (Sections 301 through
310, 19 U.S.C. § §2411-2420), titled Relief from Unfair
Trade Practices, is often collectively referred to as
Section 301. Section 301 provides a statutory means by
which the United States imposes trade sanctions on foreign
countries that violate U.S. trade agreements or engage in
acts thatare unjustifiable or unreasonable andburden
U.S. comnerce. Prior to 1995, the United States used
Section 301 extensively to pressure other countries to
eliminate trade barriers andopen their markets to U.S.
exports. The creation of an enforceable dispute settlement
mechanismin the WTO, strongly advocatedby the United
States, significantly reducedU.S. use of Section 301.
The United States retains the flexibility to determine
whether to s eekrecourse for foreign unfair trade practices
in the WTO and/or act unilaterally. The Statement of
Administrative Action (SAA)-which explainedhow U.S.
agencies would implement the Uruguay Round Agreements
Act (URAA or WTO Agreements)-states that theUSTR
will invoke the dispute settlement procedures of the WTO
Dispute Settlement Understanding (DSU) for investigations
that involve an alleged violation of (or the impairment of
U.S. benefits under) WTO Agreements. At the s ame time,
the SAA makes clear that [n]either section 301, nor the
DSU will require the USTRto do so if it does not
consider that a matter involves WTO Agreements. Such a
determination appears to be solely at the USTR's
discretion. However, the USTR's decision to bypass WTO
disputes ettlement and impose retaliatory measures (if any),
may be challenged at the WTO.
While the law does not limit the scope of investigations, it
cites three types of foreign government conduct subject to
Section 301 action: (1) a violation that denies U.S. rights
under a trade agreement, (2) an unjustifiable action that
burdens or restricts U.S. commerce, and (3) an
unreasonable ordiscriminatory actionthatburdens or
restricts U.S. commerce. The statute defines commerce
to include goods, services, and investment.
Sections 302 through 309 describe theprocedural
requirements and limitations for Section 301 actions.
Ad n', ,, , Section 301 investigations are conducted
by a Section 301 Committee-a subordinate, staff-level
body of the USTR-led, interagency TradePolicy Staff
Committee (TPSC). The Section 301 Committee reviews
Section 301 petitions, conducts public hearings, and makes
recomnendations to theTPSCregarding potential actions
under Section 301. The USTR then bases its fmaldecision
on the recommendations provided by the TPSC.
tiaI,., TheUSTRmay initiate a Section 301 case as a
result of a petition or can self-initiate a case. Any
interested person may file a petition with the USTR
requesting that the agency take action under Section 301.
Within 45 days of the receipt, the USTRmust review the
allegations and determine whether to initiate an
investigation. Section 301 also provides two means by
which the USTRmay initiate an investigationin the
absence of a petition. It can investigate any matter, but only
after consulting with appropriate stakeholders. In addition,
the USTRis generally requiredto initiate a Section301
investigation of any country -within 30 days-after
identifying it as aSpecial301 Priority Foreign
Country. In its annual Special 301 report, the USTR
identifies countries thatdo not provide adequate intellectual
property rights (IPR)protection and enforcement. (Rules
for IPR cases initiated through Special301 differ somewhat
fromthose that govern standardSection 301 investigations.)
C ons Upon initiating an investigation, the
USTR must request consultations with the targeted foreign
government regarding theis sues raised. If the investigation
involves a trade agreement and a mutually acceptable
resolutionis not reached, theUSTRmust request formal
dispute settlement proceedings under the governing trade
agreement (WTO orpotential U.S. free trade agreement). In
the past, with regard to investigations that do notinvolve an
agreement, the USTRhas initiated investigations while
simultaneously requesting consultations with the foreign
government and seeking information and advice from
appropriate trade advisory committees. If an investigation
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