The United States has initiated a trade investigation targeting structural excess manufacturing capacity in 16 economies, including major exporters like China, the European Union, and manufacturing hubs in Asia and emerging economies such as India, Bangladesh, and Cambodia. The investigation by the USTR aims to assess if persistent trade surpluses and underutilized industrial capacity in these economies distort global markets and impact US manufacturing. These economies, which encompass some of the world’s largest exporters, operate across various industries from electronics and automobiles to textiles, chemicals, and energy.
China emerges as a significant focus of the investigation with a global goods trade surplus exceeding $1.2 trillion in 2025, representing nearly 70% of the total global goods trade surpluses. In 2024, China also registered a bilateral trade surplus of $361 billion with the United States, the largest among US trading partners, covering exports ranging from machinery and electronics to automobiles, steel, chemicals, and consumer goods. The country’s industrial utilization rate dropped to 74.4% in 2025, indicating substantial unused manufacturing capacity.
The European Union stands as the second major economic bloc under scrutiny, with the euro area reporting a $451 billion goods trade surplus in 2024 and a $147 billion bilateral surplus with the US. Key export sectors for the EU include chemicals, machinery, and vehicles, with countries like Germany and Ireland noted for persistent trade surpluses and sectors showing low capacity utilization. Additionally, various Asian economies, such as Vietnam, South Korea, and Taiwan, known for their electronics and semiconductor industries, are also part of the investigation.
Several smaller export-driven economies like Singapore, Malaysia, Mexico, and Japan are highlighted for their trade surpluses in specific sectors such as semiconductors, electronics, automotive, and machinery. In Southeast Asia, Thailand, Bangladesh, and Cambodia focus on automobile, machinery, garments, footwear, and related product exports. India, with a $58 billion bilateral trade surplus with the US in 2025, features textiles, construction goods, health products, and automotive manufacturing among its surplus sectors, with excess capacity noted in industries like solar, petrochemicals, and steel.
The investigation also includes commodity-driven exporters like Norway and Indonesia in fuels, metals, agricultural products, and seafood, and Switzerland with a strong surplus from refined gold, pharmaceuticals, and machinery exports. Despite their diverse exports, all 16 economies share a common trait of production capacity surpassing domestic demand, leading to persistent trade surpluses and unused industrial capacity. US officials argue that such imbalances can alter global trade patterns, with excess production often finding its way to export markets, including the US.
