WASHINGTON, April 20, 2026 —A submission to the Office of the United States Trade Representative (USTR) said the structural excess capacity under investigation in a Section 301 probe is driven by foreign government policies that distort competition and disadvantage U.S. firms.
The filing, submitted by Shanker Singham on behalf of Competere LLC in response to USTR’s March 2026 initiation of investigations into global overcapacity, argues that the problem stems from what it calls Anti-Competitive Market Distortions (ACMDs). These include regulatory and institutional measures that damage US exporters, shield domestic firms, restrict foreign competition and lower US export volumes while artificially increasing imports into the US.
The document cites structural excess capacity as “not a naturally occurring market phenomenon” but “the direct, measurable output of specific choices governments make.”
It said many economies maintain the appearance of open markets while using regulatory barriers, investment restrictions and selective enforcement of competition laws to limit effective competition by foreign firms.
This creates “market access without market contestability,” where firms can enter a market but cannot compete on equal terms.
The filing argues that these distortions suppress U.S. exports, increase imports into the United States and contribute to wider trade imbalances.
It added that between 70% and 80% of trade-related economic harm now comes from domestic regulatory and institutional distortions rather than tariffs.
The submission by Competere is unique in that it provides a means to quantify the impact of these distortions in terms of their impact on GDP per capita. Furthermore, the document states: “By identifying the ACMD operating within the subject economy and applying a tariff calibrated to the scale of that distortion, the United States can correct the institutional failure that generates excess capacity without creating additional wealth destructive distortions in the global system.”
The submission cites South Korea, India and the European Union as key examples.
In South Korea, digital regulation and competition policy could impose costs of up to $525 billion on the U.S. economy over ten years, the filing said. In India, foreign investment restrictions and competition policy could create $156 billion in U.S. economic drag over five years. It also warned that European Union regulatory alignment with the United Kingdom could reduce U.S. export opportunities, and impose $23 – 73bn dollars of damage to the US economy, risking 350,000 jobs. In the case of South Korea, the filing suggests that the net effect of Korean policies is to boost Chinese platforms at the expense of their US competitors.
The filing urged USTR to use Section 301 to address these distortions directly by treating them as unreasonable barriers to U.S. commerce and applying targeted tariffs calibrated to their impact.
The submission frames the issue as both an economic and strategic concern, arguing that such distortions weaken U.S. firms globally while strengthening state-supported competitors.
The USTR investigations are ongoing, and hearings with oral testimony are scheduled in May.
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