The US last week launched two Section 301 investigations on several countries, including India. (NYT)With the US Supreme Court scrapping the International Emergency Economic Powers Act (IEEPA) tariffs last month, the Trump administration has imposed 10% global tariffs under Section 122 for five months. But the United States Trade Representative (USTR), amid the turmoil in West Asia, has begun to recreate a new tariff structure that could serve as the basis for its trade agreement.The new tariff structure – already in the works with a new set of Section 301 investigations launched last week – would be crucial for India-US trade deals as well as other trade partners who were willing to give market access to American products in exchange for the easing of reciprocal tariffs.Comparative advantageA Commerce Ministry official explained Monday that any trade deal with the US that India signs would be focused on the upcoming tariff structure or comparative advantage that India gets in the US market, and that USTR is recreating a tariff structure.This is because several US trade partners have begun to express doubts about their trade deals following the IEEPA ruling. While Malaysia on Monday declared its trade deal with the US null and void, citing the collapse of the legal basis for the tariffs that supported it, the European Union had also put the EU-US trade deal on hold.The US last week launched two Section 301 investigations on several countries, including India. While one cites structural excess capacity and overproduction in certain manufacturing sectors, the other cites failure to prohibit imports of goods produced using “forced” labour. But the purpose could be to create a reciprocal tariff- like structure.The fast-track nature of the investigation will mean that USTR will have new legal powers to impose differential tariffs on countries by May. Deborah Elms, Head of Trade Policy at Singapore-based Hinrich Foundation, in a social media post, said this is a “very fast” investigation with a short comment window and the mandated hearing in early May.“The reason for this unusually rapid inquiry is that the statutory authority for existing US tariffs currently set by the Trump administration at 10% globally under a different legal power, Section 122 of the Trade Act of 1974, will expire on 27 July. The USTR’s goal is to replace these Section 122 tariffs with new measures by July,” Elms said.Stronger legal basisStory continues below this adElms said that, unlike other tariff authorities, Section 301 is unlikely to get overturned by the US Courts or involve Congress. “Any penalties that get applied are likely to be long-lasting, particularly since Section 301 empowers the executive branch to modify, adjust, or reopen cases at will in the future,” Elms said.While Indian government officials have said that the final trade deal will take care of the Section 301 tariffs, USTR, in its investigation, has said that India has “structural excess capacity and production”.The top US trade body said that in 2025, India had a bilateral trade surplus with the US of $58 billion, and that India’s global goods trade surplus sectors include textiles, health, construction goods, and automotive goods.“For example, evidence suggests the solar module sector is plagued by excess capacity, including that India’s current module manufacturing is nearly triple the annual domestic demand. India also has created significant excess capacity in petrochemicals, steel, and other industries,” USTR said.Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, specializing in economic policy and financial regulations. With over five years of experience in business journalism, he provides critical coverage of the frameworks that govern India's commercial landscape. Expertise & Focus Areas: Mishra’s reporting concentrates on the intersection of government policy and market operations. His core beats include: Trade & Commerce: Analysis of India's import-export trends, trade agreements, and commercial policies. Banking & Finance: Covering regulatory changes and policy decisions affecting the banking sector. Professional Experience: Prior to joining The Indian Express, Mishra built a robust portfolio working with some of India's leading financial news organizations. His background includes tenures at: Mint CNBC-TV18 This diverse experience across both print and broadcast media has equipped him with a holistic understanding of financial storytelling and news cycles. Find all stories by Ravi Dutta Mishra here ... Read More © The Indian Express Pvt LtdTags:Explained EconomicsExpress Explained