March 18, 2026 | 10:17 pm
TEMPO.CO, Jakarta - The United States government has launched a Section 301 investigation into trade practices across 16 economies, including Indonesia, over allegations of industrial overcapacity and unfair trade measures. The move has drawn attention after the U.S. Supreme Court struck down a retaliatory tariff policy.
Section 301 of the Trade Act of 1974 authorizes the Office of the United States Trade Representative (USTR) to investigate and potentially impose sanctions on foreign governments deemed to engage in unfair trade practices that harm U.S. interests.
"The investigations will determine whether those acts, policies, and practices are unreasonable or discriminatory and burden or restrict U.S. commerce," according to a White House release published on March 11, 2026.
The economies under investigation are China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India.
According to the Institute for Economic and Social Research at the Faculty of Economics and Business, University of Indonesia (LPEM FEB UI), in its publication Trade and Industry Brief, a Section 301 investigation could allow the United States to use measures such as tariffs, the withdrawal of trade concessions, or binding agreements requiring the targeted countries to halt certain practices or compensate the U.S.
In its document, the USTR claims there is evidence of structural overcapacity in Indonesia, reflected in what it describes as a significant or sustained trade surplus in goods. It also argues that Indonesia has maintained persistent oversupply due to an imbalance between domestic production and demand.
However, LPEM FEB UI argues that Indonesia’s share of the U.S. market remains relatively small, accounting for only about 4.2 percent of total global exports covered by the Section 301 review, “thus not significant enough to be considered a primary source of pressure on the U.S. industry,” the institute’s research team said.
The institute also said the U.S. allegations do not clearly establish a direct causal link, as they do not specifically explain how Indonesia’s policies have harmed American industry, either through trade volumes or market displacement.
LPEM FEB UI further argued that the Section 301 approach may be inconsistent with the principles of the rules-based trading system.
"As it is conducted unilaterally without recourse to the dispute settlement mechanisms of the WTO (World Trade Organization)."
The Indonesian government said it has prepared evidence and arguments in response to the investigation. Haryo Limanseto, spokesperson for the Coordinating Ministry for Economic Affairs, said the government has coordinated with business associations and stressed the need to establish a task force to follow up on the process and hold consultation sessions with the USTR.
The USTR said interested parties may submit written comments, requests to participate in the hearing, and summaries of testimony no later than April 15, 2026. A hearing on the investigation is scheduled to begin on May 5, 2026.
Read: Indonesia Gathers Evidence for US Trade Investigation
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