Background

Two key House lawmakers are urging a “swift conclusion” to the Biden administration’s ongoing review of the Section 301 tariffs on hundreds of billions of dollars’ worth of imports from China.

House Ways and Means Committee Chair Jason Smith, and Trade Subcommittee Chair Adrian Smith, chastised U.S. Trade Representative Katherine Tai in a May 7 letter for her agency’s “continued inaction” with respect to the review. “It took President Trump only about eight months to conclude the extensive original Section 301 investigation into China’s unfair trade practices, and only about another four months to impose the resulting tariffs,” they said. “In contrast, the Biden administration has taken two years to study the effectiveness of the tariffs.” This delay, they said, combined with “failure to enforce China’s violations of the Phase One agreement … represents a passive approach to China trade challenges that lacks strategic focus.”

In the meantime, “China has attempted to save its faltering economic growth with a new spree of industrial investment” that threatens “an overcapacity shock” for free market economies in everything from “electric vehicles to petrochemicals to steel to aluminum to a host of sundry manufactured goods.” In response, the lawmakers said they expect the results of USTR’s tariff review “to be significant and substantive proposals for addressing the challenges in the bilateral trade relationship” that ought to be guided by the principle that “the United States must continue to be the number one economic, technological, and military power in the world over the long-term.”

In 2022 USTR announced that it would continue the Section 301 tariffs while conducting an investigation of whether they have been effective in remedying problematic Chinese policies and practices, whether there are measures other than tariffs that might be more effective, and how the tariffs have impacted U.S. consumers, manufacturers, workers, technology, and supply chain resilience. Tai initially said she expected this review to be completed by fall 2023, then by the end of that year, and under questioning by lawmakers last month she said “we are very close to the conclusion of this review.”

There is increasing speculation that an announcement could come before the end of May, when dozens of exclusions from the tariffs are set to expire, and that it will largely increase tariffs and expand the list of covered products. In recent months Tai has defended the tariffs as having “strategic value” by helping to diversify production away from China and promote the Biden administration’s “worker-focused” trade policy. The Biden administration may also be feeling pressure to stand firm because former president Donald Trump has pledged to further increase tariffs on imports from China if he is re-elected this fall.

With the tariffs thus expected to remain in effect for the foreseeable future, importers may want to consider options for lessening their impact.

- ST&R is 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).

Copyright © 2024 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.

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