Washington: The United States has launched a trade investigation into structural excess manufacturing capacity across 16 economies, including major exporters such as China and the European Union, as well as key Asian and emerging markets like India, Bangladesh, and Cambodia.

The U S Trade Representative (USTR) will examine whether persistent trade surpluses and underutilised industrial capacity in these economies distort global markets and affect American manufacturing. 

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. Together, they represent some of the world’s largest exporters across electronics, automobiles, textiles, chemicals, and energy.

China leads the list

China stands out with a global goods trade surplus exceeding $1.2 trillion in 2025, nearly 70 per cent of global trade surpluses. Its bilateral trade surplus with the US reached $361 billion in 2024, the largest among US partners. Chinese exports cover machinery, electronics, automobiles, steel, chemicals, and consumer goods. Industrial utilisation fell to 74.4 per cent, indicating significant unused capacity.

European Union and other major economies

The European Union recorded a $451 billion global goods surplus in 2024 and a $147 billion surplus with the US. Key export sectors include chemicals, machinery, and vehicles. Within the EU, Germany and Ireland show persistent trade surpluses and relatively low manufacturing capacity utilisation.

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Fast-growing Asian manufacturing hubs

Vietnam reported a global trade surplus of $196 billion in 2025, with a $178 billion surplus with the US, driven by electronics and machinery. South Korea and Taiwan rely heavily on electronics and semiconductors, recording surpluses of $52 billion and $73.3 billion, respectively.

Smaller export-driven economies

Singapore and Malaysia maintain strong surpluses in semiconductors, electronics, petrochemicals, and machinery. Mexico posted a $197 billion surplus with the US, largely from automotive exports. Japan recorded a $57 billion bilateral surplus with the US, primarily from vehicles, despite a global goods deficit. Thailand exports automobiles and machinery, while Bangladesh and Cambodia focus on garments and footwear.

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India’s trade position

India registered a $58 billion bilateral surplus with the US in 2025, with key sectors including textiles, construction goods, health products, and automotive manufacturing. The report also notes excess capacity in India’s solar, petrochemical, and steel industries.

Commodity-driven exporters

Norway and Indonesia run surpluses in fuels, metals, agricultural products, and seafood. Switzerland relies on refined gold, pharmaceuticals, and machinery for its surplus.

Despite diverse economies and sectors, the common feature is that production capacity often exceeds domestic demand. US officials warn that this leads to persistent trade surpluses, unused industrial capacity, and shifts in global trade flows, with excess production frequently entering US markets.

IANS