Background

President Biden could announce in the coming weeks a decision on changes to the Section 301 tariffs on hundreds of billions of dollars’ worth of imports from China, according to press reports. The president is thought likely to lower tariffs on some consumer items but maintain and possibly increase tariffs on goods like industrial inputs, but few other details are known.

Press reports indicate that the decision will likely be framed in terms of efforts to lower inflation in the U.S., which has reached its highest levels in 40 years and is possibly the single-biggest concern for voters ahead of this fall’s congressional elections. However, the ongoing delay in the decision (which has been under active consideration for months) may reflect concerns that the actual impact on higher prices will be minimal and might therefore be insufficient to offset the political blowback the White House could incur by being seen as weak on China.

Administration officials continued this week to highlight those opposing influences. Treasury Secretary Janet Yellen said some tariff reductions “may be warranted and could help bring down prices of things that people buy that are burdensome,” according to an article in The New York Times. On the other hand, Politico reports that U.S. Trade Representative Katherine Tai told a congressional panel that the tariffs are “a significant piece of leverage, and a trade negotiator never walks away from leverage.”

USTR is currently conducting reviews of the Section 301 tariffs on List 1 and 2 goods, which are scheduled to expire July 6 and Aug. 23, respectively. Requests to continue these tariffs may be submitted by representatives of domestic industries that benefit from them (1) between May 7 and July 5 for List 1 goods and (2) between June 24 and Aug. 22 for List 2 goods. USTR has said it will also consider the tariffs on List 3 and List 4A goods “as applicable” to the List 1 and List 2 actions but gave no further details.

In the meantime, efforts to ameliorate the impact of the tariffs are continuing.

- ST&R is assembling coalitions on housing affordability, the music industry, and children’s products to address USTR’s review and related issues (to join a free introductory call for more information, please contact Nicole Bivens Collinson at (202) 730-4956 or via email or Angela Marshall Hofmann at (202) 730-4957 or via email).

- ST&R is also advocating for the renewal of all previously approved exclusions and the creation of a process allowing for new exclusion requests (for more information, please contact strdc@strtrade.com).

- There are a number of proven and legitimate ways to effectively avoid the tariffs or limit their impact (click here for more information).

- Importers of List 3 and 4A goods from China can still preserve their rights to possible refunds of tariffs paid on such goods by joining an ongoing court case (for more information, or assistance filing a claim, please contact us at 301Litigation@strtrade.com).

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