Trump starts trade probes on Mexico, China as tariff fight intensifies

White House investigation into manufacturing overcapacity targets 16 countries

A new U.S. trade investigation into foreign manufacturing overcapacity could lead to more tariffs affecting global supply chains. (Photo: Jim Allen/FreightWaves)

The Trump administration has opened a new set of trade investigations targeting 16 trading partners — including Mexico and China — over alleged unfair trade practices and industrial overcapacity that the White House says is undermining American manufacturing.

The investigations, announced by the Office of the United States Trade Representative (USTR) on Wednesday, are being conducted under Section 301 of the Trade Act of 1974, a law that allows the U.S. government to impose tariffs or other trade penalties if foreign policies are found to harm domestic commerce.

The probe will examine whether the targeted economies are producing more goods than their domestic markets can absorb and exporting the surplus to the U.S. — potentially suppressing wages, distorting prices and discouraging investment in U.S. factories.

Countries under investigation include:

  • China
  • European Union
  • Mexico
  • Switzerland
  • Norway
  • Indonesia
  • Malaysia
  • Cambodia
  • Thailand
  • South Korea
  • Vietnam
  • Taiwan
  • Bangladesh
  • Singapore
  • Japan
  • India

U.S. Trade Representative Jamieson Greer said the investigations will determine whether policies such as government subsidies, state-owned enterprises or labor practices create unfair advantages for foreign producers.

Mexico faces scrutiny despite USMCA trade pact

Mexico’s inclusion in the probe could complicate trade relations within the United States-Mexico-Canada Agreement (USMCA).

U.S. officials say the investigation will examine whether certain industries in Mexico are producing more goods than domestic demand can absorb and exporting excess supply into the U.S. market. 

The move comes just days before the scheduled start of the USMCA’s formal review process, highlighting growing tensions between Washington and its largest trading partner.

Mexico has become the top U.S. trading partner, with commerce between the two countries increasing 3.9% year over year to $872.83 billion in 2025. But U.S. officials argue that manufacturing overcapacity in some sectors could still distort trade flows.

China remains central target

The U.S. has long accused China of subsidizing key industries, creating large manufacturing surpluses that flood global markets. These concerns have driven years of tariffs and trade disputes between the two countries.

Section 301 tariffs imposed during Trump’s first administration — and largely maintained by subsequent administrations — remain in place today and cover hundreds of billions of dollars in Chinese imports.

The new investigation could lead to additional tariffs or expanded restrictions on Chinese goods.

Tariffs tied to Supreme Court ruling

The investigations follow a recent Supreme Court decision striking down some tariffs imposed by Trump under emergency economic powers.

After the ruling, the Trump administration imposed new temporary trade penalties on U.S. trading partners under Section 301. The temporary tariffs are scheduled to expire after about 150 days unless extended.

USTR will open a public comment period on Tuesday, with hearings scheduled to begin May 5 on the new probe. Officials expect the investigations to conclude within roughly 150 days.

Below are the approximate current tariff rates applied by the U.S. on imports from the economies targeted in the probe.

Country / EconomyCurrent U.S. Tariff Rate
China~25% on many goods (Section 301 tariffs)
European Union~10% temporary tariff
Singapore~10%
Switzerland~10%
Norway~10%
Indonesia~10%
Malaysia~10%
Cambodia~10%
Thailand~10%
South Korea~10%
Vietnam~10%
Taiwan~10%
Bangladesh~10%
Mexico~10%
Japan~10%
India~10%
The current tariff rates on imports from the largest U.S. trading partners.
Upcoming FreightWaves Events
Fraud & Security

Freight Fraud Symposium

Double brokering. AI deepfakes. Identity theft. Freight fraud is an existential threat to the industry. Get ahead of it.

May 20, 2026
Rock & Roll Hall of Fame • Cleveland, OH
Register Now
AI & Technology

Supply Chain AI Symposium

Past the hype. Join operators, founders, and enterprise leaders figuring out how to deploy AI in supply chain.

July 15, 2026
The Old Post Office • Chicago, IL
Register Now
Rail & Policy

Future of Rail Symposium

Reshoring is rewriting freight demand. Join shippers, rail executives, and government officials to shape the next decade.

July 28, 2026
The Signal at Chattanooga Choo Choo • Chattanooga, TN
Register Now
Fraud & Security Freight Fraud Symposium May 20 • Cleveland, OH

Double brokering. AI deepfakes. Identity theft. Freight fraud is an existential threat to the industry. Get ahead of it.

Rock & Roll Hall of Fame • Cleveland, OH Register Now
AI & Technology Supply Chain AI Symposium Jul 15 • Chicago, IL

Past the hype. Join operators, founders, and enterprise leaders figuring out how to deploy AI in supply chain.

The Old Post Office • Chicago, IL Register Now
Rail & Policy Future of Rail Symposium Jul 28 • Chattanooga, TN

Reshoring is rewriting freight demand. Join shippers, rail executives, and government officials to shape the next decade.

The Signal at Chattanooga Choo Choo • Chattanooga, TN Register Now

Noi Mahoney

Noi Mahoney is a Texas-based journalist who covers cross-border trade, logistics and supply chains for FreightWaves. He graduated from the University of Texas at Austin with a degree in English in 1998. Mahoney has more than 20 years experience as a journalist, working for newspapers in Maryland and Texas. Contact nmahoney@freightwaves.com