US industries and trade groups are divided over the Trump administration's investigation into excess factory capacity, with manufacturers urging higher tariffs and import-dependent sectors warning of economic risks, reported Reuters.

The US Trade Representative launched a four-day hearing on its Section 301 probe into excess industrial capacity in 16 trading partners, including China, the EU, Japan, South Korea, Mexico, and Vietnam. Nearly 150 representatives are scheduled to testify.

Trade watchers expect the probe to lead to new import duties as the administration seeks to rebuild tariff leverage after the Supreme Court struck down global tariffs imposed under a national emergencies law. USTR Jamieson Greer stated that he aims to complete the investigation by July.

The Center for a New American Security urged a coordinated allied response, stating that China's structural excess capacity poses a strategic problem. China rejected the US narrative, calling it legally flawed.

Steel industry representatives pressed for more curbs, citing global overcapacity. Brandon Farris of the Steel Manufacturers Association noted that excess production from the EU, South Korea, and Taiwan is contributing to a glut that threatens US jobs.

Agriculture groups urged caution. The American Soybean Association warned that new tariffs could disrupt a fragile truce with China and lead to renewed duties on US soybeans. The group requested exemptions on farm inputs such as fertilizers.

Import-dependent sectors also opposed new measures. The Footwear Distributors and Retailers of America stated that higher tariffs would raise costs for families already facing economic uncertainty.