US Trade Representative Jamieson Greer said Monday that a Section 301 investigation into "structural overcapacity" under US trade law is in its final stages and could lead to additional tariffs. [Getty Images]
US Trade Representative Jamieson Greer said Monday that a Section 301 investigation into "structural overcapacity" under US trade law is in its final stages and could lead to additional tariffs. [Getty Images]

US Trade Representative Jamieson Greer said Monday that a probe into "overcapacity" under Section 301 of US trade law is nearing completion and could result in additional tariffs.

Appearing on Fox News that day, Greer said the USTR is conducting a Section 301 investigation into "structural overcapacity." South Korea is among the countries under scrutiny.

"Countries like Vietnam and China pursue industrial policies that subsidize their companies, meaning those companies don't need to turn a profit and can dump manufactured products into the United States," Greer said, adding that the USTR plans to "wrap up the overcapacity investigation soon and put forward proposals." Once the probe concludes, the USTR is expected to allege unfair trade practices stemming from structural overcapacity and impose tariffs or other measures on the targeted countries. "This investigation could lead to additional tariffs," Greer said.

On Thursday, the USTR investigated whether to ban imports of goods produced with forced labor under Section 301 and, on that basis, imposed tariffs of 10 to 12.5 percent on 60 countries. South Korea was hit with a 12.5 percent tariff.

On the Section 301 investigations, Greer said the USTR is "trying to target and eliminate these problems one by one, for each country's unfair trade practice, and create a level playing field."

Greer also said the tariffs imposed over inadequate enforcement against imports of forced-labor goods would have "absolutely no impact" on domestic prices in the United States or on the likelihood of an interest rate increase.

The Federal Reserve is set to hold its Federal Open Market Committee (FOMC) meeting Tuesday through Wednesday, with a benchmark interest rate decision due Wednesday.

A rate hold is the broadly prevailing expectation heading into the FOMC meeting, though analysts note that the probability of a rate increase has edged up somewhat as international oil prices have risen following a renewed exchange of hostilities between the United States and Iran. The Fox News host also asked whether adding tariff measures on top of already-rising inflationary pressure could increase the likelihood of a rate hike.

In response, Greer said the earlier tariffs "applied to the whole world," whereas "now there are a set of tariffs that apply to a narrower range — not the whole world." His point was that while the blanket 10 percent global tariff carried the potential to push up prices, the Section 301 tariffs are not universally applied to all countries and therefore do not exert upward pressure on inflation.

He added that because "tariff rates are mostly similar," there would be "no different economic impact from what we've experienced so far."


kate01@heraldcorp.com