The Office of the U.S. Trade Representative will accept public input from May 29 through June 28 on its previously announced proposal to increase certain tariffs on some $18 billion worth of Chinese goods, establish an exclusion process for a limited number of products, and make other changes.

These recommendations are included in USTR’s report on its review of the Section 301 tariffs, which were first imposed in 2018 in an effort to persuade China to modify its “harmful technology transfer-related acts, policies, and practices.” USTR Katherine Tai said that while the tariffs have been somewhat successful in that regard, “further action is required.”

The USTR notice seeking public input lists the specific 382 HTSUS subheadings and five HTSUS statistical reporting numbers that would be subject to the increased Section 301 tariffs. USTR is proposing that increases in 2024 be effective Aug. 1, 2024, and that increases in 2025 and 2026 be effective Jan. 1 of the corresponding year. If the proposal is finalized in its current form, the Section 301 tariff increases would be as follows:

  • battery parts (non-lithium-ion batteries) – from 7.5 percent to 25 percent on Aug. 1, 2024
  • electric vehicles – from 25 percent to 100 percent on Aug. 1, 2024
  • lithium-ion electrical vehicle batteries – from 7.5 percent to 25 percent on Aug. 1, 2024
  • lithium-ion non-electrical vehicle batteries – from 7.5 percent to 25 percent on Jan. 1, 2026
  • medical gloves – from 7.5 percent to 25 percent on Jan. 1, 2026
  • natural graphite – from 0 to 25 percent on Jan. 1, 2026
  • other critical minerals – from 0 to 25 percent on Aug. 1, 2024
  • permanent magnets – from 0 to 25 percent on Jan. 1, 2026
  • face masks / respirators – from 0-7.5 percent to 25 percent on Aug. 1, 2024
  • semiconductors – from 25 percent to 50 percent on Jan. 1, 2025
  • ship-to-shore cranes – from 0 to 25 percent on Aug. 1, 2024
  • solar cells (whether or not assembled into modules) – from 25 percent to 50 percent on Aug. 1, 2024
  • steel and aluminum products – from 0-7.5 percent to 25 percent on Aug. 1, 2024
  • syringes and needles – from 0 to 50 percent on Aug. 1, 2024

USTR is also proposing (1) an exclusion process by which interested parties may request that specific machinery used in domestic manufacturing and classified under certain subheadings within Chapters 84 and 85 be temporarily excluded from the Section 301 tariffs (these exclusions would be in place through May 31, 2025, and procedures for requesting exclusions would be published in a separate notice), and (2) 19 temporary exclusions for specific solar manufacturing equipment, ostensibly effective from the date the USTR notice is published in the Federal Register through May 31, 2025.

Note that the effective dates for the 19 temporary exclusions for solar manufacturing equipment could be retroactive to May 23, 2024, thus providing refunds. Depending on when USTR announces its final decision, the effective dates for the increases on August 1, 2024, could also possibly be retroactive increases.

Interested parties may comment on the following aspects of the USTR’s proposal (to facilitate the preparation of comments, USTR intends to post a copy of questions for the docket by May 24):

  • the effectiveness of the proposed modifications in obtaining the elimination of, or in counteracting, China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation;
  • the effects of the proposed modifications on the U.S. economy, including consumers;
  • the scope of the product description to cover ship-to-shore cranes under subheading 8426.19.00 (transporter cranes, gantry cranes, and bridge cranes);
  • with respect to face masks, medical gloves, and syringes and needles, whether the tariff rates should be higher than the proposed rates;
  • with respect to face masks, whether additional statistical reporting codes under tariff subheading 6307.90.98 should be included;
  • whether the tariff subheadings identified for each product and sector adequately cover the products and sectors included in the president’s direction to USTR;
  • with respect to the exclusion process for specific machinery, whether the subheadings listed should or should not be eligible for consideration in that process and whether any omitted subheadings within Chapter 84 and 85 that cover machinery used in domestic manufacturing should be included; and
  • with respect to the solar manufacturing equipment exclusions, the scope of each exclusion including any suggested changes to the product description.

USTR’s notice did not include any information on the May 31 expiration of hundreds of tariff exclusions.

Importers of goods subject to the proposed tariff increases should contact ST&R to discuss options for avoiding or ameliorating those higher costs. ST&R can also help importers of machinery that may be eligible for new tariff exclusions to navigate that process. For more information on these or other topics related to the Section 301 tariffs, please contact your ST&R professional or via this email.

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