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6 April 2026

US launches Section 301 investigations on unfair trade practices: Towards additional unilateral tariffs and trade disruptions?

By Amanda Carlota, Stella Nalwoga, and Tobias Dolle

On 11 March 2026, the Office of the US Trade Representative (hereinafter, USTR) announced the launch of investigations under Section 301 of the US Trade Act of 1974 into the “acts, policies, and practices of various economies relating to structural excess capacity and production in manufacturing sectors” targeting sixteen economies. On 12 March 2026, the USTR announced the launch of a second broader set of Section 301 investigations into 60 economies focused on alleged “failure to impose and effectively enforce a ban on the importation of goods produced with forced labor”. These investigations could result in the introduction of trade restrictions vis-à-vis the impacted countries and potentially trigger retaliatory actions that could further disrupt global trade.

This article discusses Section 301 of the US Trade Act of 1974, with a focus on the investigations concerning structural excess capacity and production, and examines the legal challenges to these Section 301 actions and the implications for US’ trading partners.

Section 301 of the US Trade Act of 1974

Section 301 of the US Trade Act of 1974 (hereinafter, the Statute), which concerns “relief from unfair trade practices”, is one of the tools in the US’ trade arsenal, in addition to Section 122 of the same Act concerning “large and serious” balance of payments deficits, which serves as the legal basis for the current additional ‘global’ tariff of 10% on all imports into the US.

Section 301 grants the USTR authority to investigate and address “unfair trade practices” by foreign countries and establishes both mandatory and discretionary bases for action. It is mandatory for the USTR to take action where it is determined that “the rights of the United States under any trade agreement are being denied” or that an act, policy, or practice of a foreign country “violates, or is inconsistent with, the provisions of, or otherwise denies benefits to the United States under any trade agreement” or is “unjustifiable and burdens or restricts United States commerce”. By contrast, the USTR has discretion to “take all appropriate and feasible action authorized” where an act, policy, or practice of a foreign country is “unreasonable or discriminatory and burdens or restricts United States Commerce”. 

The Statute provides a few definitions that lead to its broad scope of application. “Commerce” is considered to include “services” and “foreign direct investment” by US persons. The Statute also cites subsidies as measures that may “burden or restrict” US commerce. “Unreasonable” acts, policies, or practices are defined broadly as conduct that, while not necessarily inconsistent with international legal obligations, is nonetheless “unfair or inequitable”. Illustrative examples include measures that deny “fair and equitable” opportunities for the establishment of enterprises, or adequate and effective protection of intellectual property rights.

Procedural safeguards and authorised actions

To invoke Section 301, the USTR must adhere to statutory procedural safeguards. Section 301 investigations may be initiated by the USTR on its own initiative or in response to a complaint. The USTR is required to request consultations with the concerned foreign government(s). If the parties fail to reach a mutually acceptable outcome, the dispute settlement process under the governing trade agreement, if any, would ensue. Consultations are followed by the USTR’s determination as to whether the alleged conduct is unfair within the meaning of the Statute and, if affirmative, on what action is to be taken.

Regarding remedies, Section 301 authorises the USTR to: 1) “suspend, withdraw, or prevent the application” of concessions under a trade agreement; 2) Enter into a binding agreement with the foreign government to either cease the conduct in question or compensate the US; and 3) “impose duties or other import restrictions on the goods of, and, fees or restrictions on the services of such foreign country”. The Statute requires the USTR to seek public comment on proposed actions.

In terms of duration, Section 301 actions automatically terminate after four years, unless extended by the USTR upon review. During US President Donald J. Trump’s first term, the US had imposed Section 301 tariffs of 25% on a wide range of imports from China due to findings related to forced technology transfers and violations of intellectual property rights. These tariffs were reviewed in May 2024 and are still in force.

Structural excess capacity and production in manufacturing sectors

The USTR frames the first set of Section 301 investigations against the backdrop of structural excess capacity and production in manufacturing sectors that pose “a serious challenge to U.S. efforts to re-shore supply chains and provide good-paying jobs for American workers”. The USTR notes that “key trading partners have developed production capacity untethered from the incentives of domestic and global demand”, which has led to, inter alia, “overproduction and large or persistent trade surpluses, as well as underutilized and unused capacity, in manufacturing sectors” that have been sustained through government intervention.

The investigation targets Bangladesh, Cambodia, China, the EU, India, Indonesia, Japan, South Korea, Malaysia, Mexico, Norway, Singapore, Switzerland, Taiwan, Thailand, and Viet Nam. The USTR’s rationale is that these economies exhibit patterns of structural excess capacity and production that warrant further examination under Section 301. For each country, 

evidence of structural excess capacity and production is based mainly on the economies’ bilateral trade surplus with the US and the key export sectors where that surplus is perceived to exist. For example, the USTR cites China’s electronic equipment, machinery, and automobile sectors; the EU’s machinery, pharmaceuticals, and chemicals sectors; and Indonesia’s metals, agricultural products, fuels, and textiles sectors.

The USTR invited public comments on the investigations until 15 April 2026 and will hold public hearings for each investigated country from 5 to 8 May 2026. In parallel, the second set of Section 301 investigations into 60 countries, concerning importation of products made with forced labour, are ongoing. While the Statute requires the USTR to make a determination within 18 months from the date of initiation of the investigation, in cases involving a trade agreement, and within 12 months in other instances, the USTR already signalled an accelerated timeline of five months, to coincide with the termination of the current additional tariff of 10% imposed under Section 122 of the US Trade Act of 1974.

Legal challenges to Section 301 measures

Tariffs imposed pursuant to Section 301 of the US Trade Act of 1974 have already been challenged in US Courts and before the World Trade Organization (hereinafter, WTO). In the US, in a case currently pending before the US Supreme Court, lower Courts affirmed the USTR’s authority under Section 301 to address unfair foreign trade practices through mandatory or discretionary actions, including the authority to modify prior Section 301 actions under specified circumstances. At the WTO level, in 2020, a Panel in the dispute United States — Tariff Measures on Certain Goods from China, found that the additional tariffs imposed under Section 301 were inconsistent with Articles I:1 and II of the WTO General Agreement on Tariffs and Trade (hereinafter, GATT) 1994 because they applied only to products from China contrary to the WTO’s non-discrimination principle and because they were applied in excess of the rates to which the US bound itself in its Schedule of Concessions. 

The Panel also found that the US had not provided an explanation that demonstrated a genuine relationship of ends and means between the imposition of duties on the products and the public morals objective invoked under the general exception of Article XX(a) of the GATT. Additionally, in 1999, the EU had successfully challenged the legality of Section 301 actions before the WTO, arguing that they allowed the US to impose unilateral tariffs in violation of the rules of the WTO Dispute Settlement Understanding regarding the adoption of retaliatory measures. 

Towards additional tariffs and trade disruptions?

Section 301 investigations typically lead to the imposition of trade restrictions in the form of additional tariffs on top of existing most-favoured nation rates and/or fees or restrictions on the provision of services to the US. The new Section 301 investigations are expected to result in country-specific tariffs of the same or very similar magnitude as those previously imposed under the US’ International Emergency Economic Powers Act, which had been ruled illegal by the US Supreme Court. In turn, Section 301 actions could lead to retaliatory trade restrictions against the US. China has already launched investigations into the US for practices and measures that disrupt global supply chains and practices and measures that hinder trade in green products.

Tariff mitigation through trade agreements

While the Section 301 investigations confirm the US Administration’s commitment to imposing unilateral additional tariffs on trading partners, both governments and businesses have an opportunity to engage in the process, as well as in the context of the ongoing bilateral negotiations for reciprocal trade agreements with the US. The USTR has expressly invited public comments and consultations with affected countries, creating a window for engagement to secure tailored relief or exemptions from future Section 301 actions.

For any additional information or legal advice on this matter, please contact Tobias Dolle 

Indonesia overhauls its food safety regulation: “Risk-based” business licensing and institutional realignment under GR No. 1/2026

By Alya Mahira, Imelda Jo Anastasya, and Paolo R. Vergano

In an effort to strengthen its food safety framework, on 5 January 2026 Indonesia issued Government Regulation No. 1 of 2026 (hereinafter, GR No. 1/2026), amending Government Regulation No. 86 of 2019 on Food Safety (hereinafter, GR No. 86/2019). GR No. 1/2026 clarifies the division of authority between Ministries and Indonesia’s National Food Agencyand Food and Drug Supervisory Agency regarding the implementation and supervision of food safety, and, notably, introduces a “risk-based” business licensing system in the food sector, in line with the provisions of Law No. 11 of 2020 on Job Creation, as revoked and replaced by Law No. 6 of 2023 on the Stipulation of Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation as Law (hereinafter, Job Creation Law). 

This article provides an overview of the GR No. 1/2026, with a particular focus on the new “risk-based” business licensing system, and analyses its commercial implications.

Indonesia’s “risk-based” business licensing system

Indonesia’s Job Creation Law, also known as the “Omnibus Law”, amended more than 75 laws in various sectors, including agriculture, fisheries, mining, and energy. To stimulate economic growth and attract foreign investment, the Job Creation Law, as further implemented by Government Regulation No. 28 of 2025 on the Implementation of Risk-Based Business Licensing, introduced a “risk–based” system to business licensing. Under this framework, licenses are granted based on a business’ “level of risk” (i.e., low, medium, or high), which is determined by their potential impact on health, safety, the environment, the utilisation of natural resources, and/or other risks.

Previously, Indonesia had applied a strict licensing system, which required business actors to obtain multiple licenses before commencing commercial operations (see TradePerspectives, Issue No. 14 of 16 July 2021). The new licensing system reduces the licensing requirements for businesses engaged in “low-risk” activities, as they must now only obtain a Business Identification Number, eliminating the need for sectoral permits, as required under the previous regime.

To obtain a “risk-based” business license, businesses must submit an application via the Online Single Submission(OSS) platform. Indonesia’s Ministry of Investment and Downstream Industry then determines the business’ “level of risk”, which dictates the type of licences required: 

Level of riskRequired business licenseExamples
Low-riskBusiness Identification NumberBusiness activities that pose minimal potential harm to public health, safety, or the environment, such as office-based consulting services
Medium-low riskBusiness Identification NumberCertificate of Standards (self-statement)Business activities that pose limited risk and can be managed through standard operational controls, such as warehousing of non-hazardous goods
Medium-highBusiness Identification NumberCertificate of Standards (verified certificate)Business activities that pose moderate potential harm if not properly managed, such as the textile industry
High-riskBusiness Identification NumberPermit (as required by laws and regulations in each covered sector)Business activities that pose significant potential harm to public health, safety, or the environment, such as mining operations

The Government of Indonesia, both at the central and regional levels, supervises all business activities to ensure compliance with the applicable laws and regulations. “High-risk” business activities are subject to more stringent supervision, including periodic reporting and field inspections. 

Stirring the pot: Key changes under GR 1/2026

As the “risk-based” business licensing system was introduced in 2020, earlier legislation, such as GR No. 86/2019, did not yet follow this approach. Within its scope, GR No. 1/2026 seeks to address this gap by aligning Indonesia’s food safety framework with the new business licensing approach, while also introducing additional regulatory changes. 

In accordance with GR No. 1/2026, the “risk-based” business licensing system applies to all commercial activities within the food sector. Previously, GR 86/2019 required domestically produced and imported fresh food of animal or plant origin in labelled packaging to possess a registration number, and fresh fish products to possess a health certificate, each for distribution. GR No. 1/2026 standardises these requirements by requiring all three product types to obtain a business licence from the Ministry of Investment and Downstream Industry, with the specific licence determined by the level of risk associated to the business activity. In this context, businesses distributing fresh products, such as fresh fruits, are often typically classified as “medium-risk” activities. As a result, businesses engaged in such activities are required to obtain both a Business Identification Number and a Certificate of Standards.

By implementing simplified requirements for food businesses engaged in “low-risk” activities, it becomes easier for such businesses to obtain the relevant business licenses. At the same time, food businesses engaged in “high-risk” activities are subject to more stringent requirements to ensure that their food does not pose a risk to consumers. Businesses producing a range of products spanning multiple risk categories, such as “low-risk” and “high-risk”, would only need a single Business Identification Number for the entire value chain, rather than multiple numbers for each product. However, they must also obtain an additional permit to produce food considered “high-risk”, as required by laws and regulations in each covered sector.

In addition to introducing the “risk-based” business licensing system, GR No. 1/2026 also clarifies the allocation of competences among the relevant ministries and agencies responsible for food safety. Under GR No. 86/2019, Indonesia’s Ministry of Agriculture and the Ministry of Marine Affairs and Fisheries were solely responsible for establishing maximum limits for food additives and supervising businesses producing food of animal origin. GR No. 1/2026 now authorises Indonesia’s National Food Agency to establish maximum limits for food additives for fresh food. Furthermore, the Food and Drug Supervisory Agency is now required to coordinate with the Ministry of Marine Affairs and Fisheries to supervise businesses producing food of animal origin. 

Odd one out? A comparison of business licensing requirements with other jurisdictions

While most countries, including those within the EU and other ASEAN Member States, do not adopt a “risk-based” business licensing system, a few countries have introduced similar approaches. For instance, Australia applies such a system in the environmental sector, where activities are categorised into levels “1”, “2”, and “3”, with level “1” subject to less stringent licensing requirements due to its lower risk. Similarly, the UK applies a similar system for sectors such as finance, alcohol, and waste.

Notably, Indonesia’s “risk-based” business licensing system is broader in scope, as it covers a wider range of sectors, such as food, energy and mineral resources, and construction. Under the new system, special permits are required only for “high-risk” activities, making the business licensing process easier for “low-risk” and “medium-risk” activities, which are mainly carried out by micro, small, and medium enterprises.

Overall, the introduction of a “risk-based” business licensing system in the food sector could represent a positive development for trade and investment in Indonesia. By simplifying and streamlining licensing procedures, as well as aligning regulatory requirements with actual risk levels, the new system appears to reduce administrative burdens, particularly for operators dealing with ‘low-risk’ foods. Businesses should check their level of risk by submitting an application through the OSS portal and must obtain the relevant licenses based on the assigned risk classification.

For any additional information or legal advice on this matter, please contact Paolo R. Vergano 

The European Food Safety Authority declares the sweetener sucralose as ‘safe’ in its current uses and suggests to amend its specifications

By Ignacio Carreño García, Paolo R. Vergano, and Tobias Dolle

In an opinion published on 17 February 2026, following a re-evaluation process, the European Food Safety Authority (hereinafter, EFSA) concluded that the sweetener sucralose (with the E-number E 955) continues to be safe for consumers for its currently authorised uses as a food additive. 

This article reviews sucralose’s authorisation and re-evaluation as an additive in the EU, the re-evaluation procedure of sweeteners in the EU, the EFSA’s proposed amendments to the specifications of sucralose, relating to, for instance, purity criteria, as well as the industry views.

Sucralose’s authorisation as a food additive in the EU

Sucralose is a sweetener that is authorised to be used in the EU in a range of reduced-sugar and sugar-free foods, such as jams, jellies and marmalades, and beverages, pursuant to Regulation (EC) No 1333/2008 of the European Parliament and of the Council on food additives. In the food category 7.2 of part E of Annex II to Regulation (EC) No 1333/2008 on “fine bakery wares”, sucralose is authorised with the following limitations “only cornets and wafers, for ice-cream, with no added sugar”. Sucralose is approximately 600 times sweeter than sucrose (sugar), which means that much lower amounts are needed to achieve the same level of sweetness. 

On 25 September 2017, the European Commission (hereinafter, Commission) received an application from the company Aegis Holding NV for a modification of the conditions of use of sucralose. In particular, the applicant requested an extension of use in energy-reduced or without added sugar fine bakery wares. According to the applicant, the use of sucralose in fine bakery wares would make available products with reduced energy or no added sugar, which would be possible without increasing the fat content of the product.

The EFSA’s re-evaluation of sucralose confirms that it is safe in current uses

Sucralose (also referred to as trichlorogalactosucrose, TGS) was evaluated by the Joint Food and Agriculture Organization/World Health Organization Expert Committee on Food Additives (hereinafter, JECFA) in 1989 and 1991. In its latest evaluation, the JECFA set an acceptable daily intake (ADI, i.e., an estimate of the amount of a substance in food or drinking water that can be consumed daily over a lifetime without presenting an appreciable risk to health) of 15 mg/kg body weight per day.

In its Re-evaluation of sucralose (E 955) as a food additive and evaluation of a new application on extension of use of sucralose (E 955) in fine bakery wares, published on 17 February 2026, the EFSA concludes that, based on the comprehensive review of all available scientific data, “no safety concerns arise for genotoxicity [i.e., the ability of a substance to damage the DNA in cells] of sucralose (E 955) and its impurities and degradation products”. The EFSA confirms the ADI of 15 mg/kg body weight per day and indicates that current consumer exposure remains below this level. 

However, the EFSA was not able to confirm the safety of additional uses of sucralose. Notably, with respect to the requested extension of the permitted uses of sucralose in the category of “fine bakery wares” other than cornets and wafers, the EFSA concludes that, “based on the available data and the identified uncertainties regarding the potential formation of chlorinated compounds under the wide range of baking processes (…), the Panel could not conclude on the safety of the proposed extension of use of E 955 in this food category”. 

Potential health risks when sucralose is exposed to high temperatures for long periods

In an opinion issued in 2019, the German Federal Institute for Risk Assessment (Bundesinstitut für Risikobewertung, BfR), a scientifically independent institution within the portfolio of the German Federal Ministry of Food and Agriculture, had already addressed the issue of heat-induced formation of chlorinated organic compounds, such as polychlorinated dibenzo-p-dioxins (PCDD) or dibenzofurans (PCDF) or chloropropanols.

According to the BfR, a recent study found that, when sucralose is exposed to high temperatures for long periods, chlorine could migrate from sucralose and potentially form chlorinated compounds, the health effects of which are unknown. In its risk assessment published on 17 February 2026, the EFSA concluded as the BfR that risks could not be ruled out in the preparation of foods containing sucralose when heated.

The EU’s programme of reviewing sweeteners

As for all food additives, sweeteners must undergo a safety evaluation prior to market authorisation in the EU. The EFSA’s re-assessment of sucralose is part of a broader programme established in 2010 under Commission Regulation (EU) No 257/2010 setting up a programme for the re-evaluation of approved food additives in accordance with Regulation (EC) No 1333/2008 on food additives to re-evaluate the safety of food additives that were approved in the EU before 20 January 2009.

With respect to the re-evaluation programme, Recital 4 of Commission Regulation (EU) No 257/2010 states that, “taking into account that sweeteners have the most recent evaluations they should be re-evaluated the last”. The order of priorities for the re-evaluation of the currently approved food additives is set on the basis of the following criteria: 1) The time since the last evaluation of a food additive by the SCF or by the EFSA; 2) The availability of new scientific evidence; and 3) The extent of use of a food additive in food and the human exposure to the food additive.

Article 3(1)(c) of Commission Regulation (EU) No 257/2010 states that the re-evaluation of approved food sweeteners had to be completed by 31 December 2020, showing that there is already a delay. A total of 22 sweeteners are currently authorised for use in the EU, including steviol glycosides from stevia (E 960a, first evaluated in 2010); aspartame (E 951, re-evaluated in 2013); saccharins (E 954, re-evaluated in 2024); and sucralose (E 955, re-evaluated in 2026). The re-evaluation is ongoing for sorbitols (E 420), mannitol (E 421), cyclamates (E 952), isomalt (E 953), neotame (E 961), salt of aspartame-acesulfame (E 962), maltitols (E 965), lactitols (E 966); and xylitol (E 967).

The EFSA’s proposed amendments and other recommendations

As part of its re-evaluation of sucralose, the EFSA recommended the Commission to consider the revision of the specifications of sucralose, which are defined in Commission Regulation (EU) No 231/2012 laying down specifications for food additives listed in Annexes II and III to Regulation (EC) No 1333/2008. Specifications relate to origin, purity criteria, and any other necessary information for producers.

The EFSA recommended the Commission to consider the following amendments for the EU specifications: 1) Including individual limits for the impurities 4-chlorogalactopyranose (4-CG) and 1,6-dichlorofructofuranose (1,6-DCF) and, accordingly, to delete the limit for chlorinated monosaccharides; 2) Lowering the limit of lead; 3) Including the unique, universal numerical identifier (i.e., the CAS number 56038-13-2) assigned to the chemical substance sucralose.

The EFSA also recommended that the Commission consider the issue of potential formation of unwanted degradation products using sucralose during uses that require high temperature, such as frying and baking.

Industry comments on the re-evaluation of sucralose and next steps

In a statement published on 17 February 2026, the International Sweeteners Association (ISA) welcomed the assessment of sucralose by the EFSA, which reconfirmed that sucralose is safe at the established Acceptable Daily Intake (ADI) of 15 mg/kg body weight per day. The ISA underlines that it had been “confirmed that consumer exposure remains within safe limits under typical conditions of use”. 

It is now for the Commission to consider the revision of the specifications of sucralose and the issue of potential formation of unwanted degradation products using sucralose during uses that require high temperature, such as frying and baking. Interested stakeholders should also monitor the developments in relation to sweeteners in the EU, notably those for which the re-evaluation is still ongoing.

For any additional information or legal advice on this matter, please contact Ignacio Carreño Garcia

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Imelda Jo Anastasya, Amanda Carlota, Ignacio Carreño García, Pattranit Chantaplaboon, Joanna Christy, Tobias Dolle, Alya Mahira, Stella Nalwoga, and Paolo R. Vergano contributed to this issue.

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