This Tuesday, January 17, marked the close for the Office of the United States Trade Representative’s (USTR’s) comment period for its statutory 4-year review of tariffs imposed on Chinese goods under Section 301 of the Trade Act of 1974. To-date, the Biden Administration has retained Section 301 tariffs on over $300 billion worth of imports from China, which were initially imposed in four different tranches (referenced as Lists 1, 2, 3 and 4A) starting in 2018 by the Trump Administration.
As part of its mandatory 4-year review on whether the Section 301 tariffs imposed on China have been effective, USTR asked stakeholders their “views on the effectiveness of the actions in obtaining the elimination of China’s acts, policies, and practices related to technology transfer, intellectual property and innovation.” As of the January 17 deadline, USTR’s questionnaire had received 1497 public comments.
Many of the responses on the USTR comments portal argued for specific HTS lines to be removed from the duties. Key arguments for many stakeholders commenting for tariff removal are that Section 301 tariffs on Chinese goods have harmed domestic manufacturing due to increased costs on critical inputs from China, disrupted global supply chains, contributed to rising inflation and unemployment levels, and have hurt U.S. workers and consumers across various critical industries, such as healthcare and communications. In addition, another key argument for removal of Section 301 tariffs is that “rather than counteract China’s acts, policies, and practices related to technology transfer, intellectual property and innovation, Section 301 tariffs led China to assess retaliatory tariffs on goods imported from the United States.”
In its response, the U.S.-China Business Council, a nonprofit organization whose stated goal is promoting trade between the U.S. and China, stated that Section 301 tariffs “have been generally ineffective in pressuring China to change its practices”, and have resulted in “an estimated peak loss of 245,000 jobs” in the U.S. In addition, many of the responses supporting removal of the duties stated that “rather than counteract China’s acts, policies, and practices related to technology transfer, intellectual property and innovation, Section 301 tariffs led China to assess retaliatory tariffs on goods imported from the U.S.,” thus being counterintuitive to the Biden administration’s goals. Later this year, USTR may decide to remove tariffs on certain imports by HTS lines based on comments submitted as part of this four-year review process.
Other stakeholders have called for the tariffs to remain in place after July 2022, four years after they were initially imposed by USTR under the Trump Administration. They range from leading domestic manufacturers to small private businesses across various industries.
Crowell & Moring, LLP will continue to monitor developments and the potential impact to businesses and consumers moving forward.