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Congressional Research Servkc
Informling helegisIative deate sin ce 1914
Section 301 of the Trade Act of 1
Section 301 of the Trade Act of 1974 grants the Office of
the United States 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 establishment of the
World Trade Organization (WTO) in 1995, the United
States used Section 301 authorities primarily to build cases
and pursue dispute settlement at the WTO. Former
President Trump was more willing than previous officials to
act unilaterally under these authorities.
The Trump Administration attributed this shift in policy to
its determination to close a persistent gap between U.S. and
foreign government practices that it said disadvantaged
U.S. firms. In addition, it justified many of its tariff
actions-particularly those against China-by pointing to
alleged weaknesses in WTO dispute settlement procedures
and the inadequacy or nonexistence of WTO rules to
address certain Chinese trade practices. It also cited the
failure of past trade negotiations and agreements to enhance
reciprocal market access for U.S. firms and workers.
The recent use of Section 301 has been the subject of
congressional and broader international debate. In 2021, the
Biden Administration took a number of steps to eliminate
certain foreign practices and policies that were the subject
of Section 301 investigations. The Administration continues
to review its strategy for China, and so far, it has extended
and reinstated certain tariff exclusions and is conducting a
review of all Section 301 actions against China.
Overview of Section 301
Title III 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 that are unjustifiable or unreasonable and burden
U.S. commerce. Prior to 1995, the United States used
Section 301 extensively to pressure other countries to
eliminate trade barriers and open their markets to U.S.
exports. The creation of an enforceable dispute settlement
mechanism in the WTO, strongly supported by the United
States, significantly reduced U.S. use of Section 301. While
the United States retains the flexibility to seek recourse for
foreign unfair trade practices in the WTO or under Section
301, a determination to bypass WTO dispute settlement and
impose retaliatory measures (if any) in response to a
Section 301 investigation may be challenged at the WTO.
Section 30 I nvestigations
While the law does not limit the scope of investigations, it
cites several types of foreign government conduct subject to
Section 301 action, including (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 or discriminatory action that burdens or
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Updated September 22, 2023
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restricts U.S. commerce. The statute defines commerce
to include goods, services, and investment.
Procedures for Section 301 Action
Sections 302 through 309 describe the procedural
requirements and limitations for Section 301 actions.
Administration. Section 301 investigations are conducted
by a Section 301 Committee-a subordinate, staff-level
body of the USTR-led, interagency Trade Policy Staff
Committee (TPSC). The Section 301 Committee reviews
Section 301 petitions, conducts public hearings, and makes
recommendations to the TPSC regarding potential actions
under Section 301. The USTR then bases its final decision
on the recommendations provided by the TPSC.
Initiation. The USTR may 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 agency must review the
allegations and determine whether to initiate an
investigation. In the absence of a petition, the USTR can
also investigate any matter, but only after consulting with
appropriate stakeholders. In addition, the USTR is generally
required to initiate an investigation of any country-within
30 days-after identifying it as a Special 301 Priority
Foreign Country. (Rules for intellectual property rights
[IPR] cases initiated through Special 301 differ somewhat
from those that govern standard Section 301 investigations.)
Consutations Upon initiating an investigation, the
USTR must request consultations with the targeted foreign
government regarding the issues raised. If the investigation
involves a trade agreement and a mutually acceptable
resolution is not reached, the USTR must request formal
dispute settlement proceedings under the governing trade
agreement (WTO or potential U.S. free trade agreement). In
the past, with regard to investigations that do not involve an
agreement, the USTR has initiated investigations while
simultaneously requesting consultations with the foreign
government and seeking information and advice from
appropriate trade advisory committees. If an investigation
includes mixed issues, some of which are covered by an
agreement and some of which are not, the USTR generally
pursues consultations within the agreement framework and
through bilateral negotiations.
Determinations and Implementation. Following
consultations, the USTR begins its investigation to
determine if the alleged conduct is unfair or violates U.S.
rights under trade agreements. If the USTR's determination
is affirmative, it then decides what action, if any, to take
(subject to the direction of the President, if any). Section
301 divides such actions into mandatory and discretionary
categories. Mandatory action is required if the USTR
concludes that there is a trade agreement violation or that an
act, policy, or practice of a foreign government is
unjustifiable and burdens or restricts U.S. commerce. If](ViewImageLocal?handle=hein.crs/govemxu0001&div=1&collection=&method=preview&ext=.png&size=3)
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