Background

A coalition of trade, customs, and other business groups is asking for an immediate extension of exclusions from the Section 301 tariffs on imports from China that are currently scheduled to expire this fall. An Oct. 4 letter from the coalition to U.S. Trade Representative Katherine Tai states that it is critical for USTR to announce its plans for these exclusions now so companies can plan accordingly.

In March, USTR reinstated 352 exclusions retroactively to Oct. 12, 2021, allowing importers of covered goods (click here for full list) to seek refunds of Section 301 tariffs paid on those goods regardless of whether they requested the original exclusion. These exclusions will remain in effect through Dec. 31. In June, USTR extended exclusions for 81 medical care products needed to address the COVID-19 pandemic through Nov. 30.

The coalition pointed out that U.S. companies have to make supply chain and sourcing decisions months in advance and that in the absence of any USTR announcement about the fate of the exclusions they are having to “incorporate 25 percent price increases into product lines that may soon be without a Section 301 tariff exclusion.” This upward pricing pressure “will exacerbate inflation in an economy already teetering on the edge of stagflation,” the letter said, “leaving consumers – and particularly low-income consumers – with reduced purchasing power and placing more goods out of their reach.”

The coalition therefore called on USTR to not only promptly renew all the exclusions set to expire this year but also “create a more robust exclusions process – one that is open to all products covered by the China 301 tariffs.” Doing so will help U.S. companies maintain their competitiveness, the coalition said, “especially those who import products where there is no domestic or other sourcing alternative.”

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 of the tariffs and related issues (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).
  • 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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