The Office of the U.S. Trade Representative is publishing its latest list of product exclusions from the first tranche of $34 billion in Section 301 tariffs on China. This latest third list of exclusions does not include any full tariff schedule subheadings, instead applying to 21 subsets of tariff numbers in Chapters 84, 85 and 90.
Section 301 Tariffs
Section 301 Tariffs are levied under the Trade Act of 1974 which grants the Office of the United States Trade Representative (USTR) authority to investigate and take action to protect U.S. rights from trade agreements and respond to foreign trade practices. Section 301 of the Trade Act of 1974 provides statutory means allowing the United States to impose sanctions on foreign countries violating U.S. trade agreements or engaging in acts that are “unjustifiable” or “unreasonable” and burdensome to U.S. commerce. Prior to 1995, the U.S. frequently used Section 301 to eliminate trade barriers and pressure other countries to open markets to U.S. goods.
The founding of the World Trade Organization in 1995 created an enforceable dispute settlement mechanism, reducing U.S. use of Section 301. The Trump Administration began using Section 301 in 2018 to unilaterally enforce tariffs on countries and industries it deemed unfair to U.S. industries. The Trump Administration adopted the policy shift to close what it deemed a persistent "trade gap" between the U.S. and foreign governments that it said disadvantaged U.S. firms. Additionally, it pointed to alleged weaknesses in the WTO trade dispute settlement process to justify many of its tariff actions—particularly against China. The administration also cited failures in previous trade agreements to enhance foreign market access for U.S. firms and workers.
The Trump Administration launched a Section 301 investigation into Chinese trade policies in August 2017. Following the investigation, President Trump ordered the USTR to take five tariff actions between 2018 and 2019. Almost three quarters of U.S. imports from China were subject to Section 301 tariffs, which ranged from 15% to 25%. The U.S. and China engaged in negotiations resulting in the “U.S.-China Phase One Trade Agreement”, signed in January 2020.
The Biden Administration took steps in 2021 to eliminate foreign policies subject to Section 301 investigations. The administration has extended and reinstated many of the tariffs enacted during the Trump administration but is conducting a review of all Section 301 actions against China.
The Office of the U.S. Trade Representative issued a third list of product exclusions from Section 301 tariffs on goods from China. The exclusions are "reflected in 21 specially prepared product descriptions, which cover 348 separate exclusion requests," according to a pre-publication copy of a notice posted to the agency’s website April 15. The product exclusions apply retroactively to July 6, 2018, the date the first set of tariffs took effect, and will remain in effect until one year after USTR publishes the notice in the Federal Register.
A coalition of U.S. producers seeks the imposition of new antidumping and countervailing duties on ceramic tile from China, it said in a petition filed with the Commerce Department and the International Trade Commission April 10. Commerce will now decide whether to begin AD/CVD investigations, which could result in the imposition of permanent AD/CV duty orders and the assessment of AD and CV duties on importers.
Momentum is moving China and the U.S. toward a trade deal, Myron Brilliant, head of international affairs for the U.S. Chamber of Commerce, said while speaking with reporters April 2. "We're getting into the end game phase" with China, he said. Brilliant said the negotiations with the Chinese delegation that will begin April 3 will be critical to reaching a resolution at the end of April, as both sides desire. But Brilliant emphasized that the business community is more interested in a comprehensive, durable deal that resolves long-standing complaints on discrimination against foreign companies operating in China and subsidies for Chinese firms than in reaching a quick deal.
International Trade Today is providing readers with some of the top stories for March 25-29 in case they were missed.
CBP created Harmonized System Update (HSU) 1904 on March 25, containing 1,015 Automated Broker Interface records and 194 Harmonized Tariff Schedule records, it said in a CSMS message. The update includes adjustments required by the Office of the U.S. Trade Representative's announcement of new exemptions from Section 301 tariffs on China (see 1903210048). Also included in the update are "some, not all, of the associated HTS codes for composite wood products, flagged with an EP7 (TSCA certification 'may be required’) code," CBP said. Modifications required by the verification of the 2019 HTS are included as well.
CBP on March 22 added the ability in ACE for importers to file entries with the second group of exclusions from Section 301 duties, it said in a CSMS message issued on the same day. Filers of imported products that were granted an exclusion should report the regular chapter 84, 85 or 90 Harmonized Tariff Schedule number, as well as subheading 9903.88.06 for products subject to Section 301 duties on products from China but that have been granted an exemption by the Office of the U.S. Trade Representative. “Do not submit the corresponding Chapter 99 HTS number for the Section 301 duties when HTS 9903.88.06 is submitted,” CBP said.
There are no immediate plans to remove the Section 301 tariffs on goods from China, President Donald Trump told reporters March 20. Asked about discussions of the possible lowering of tariffs as the two countries work toward a trade deal, Trump said the tariffs will continue. "No, we're not talking about removing them, we're talking about leaving them [in place] for a substantial period of time because we have to make sure that if we do the deal with China, that China lives by the deal," he said. China has "had a lot of problems living by certain deals," he said. Even so, "the deal is coming along nicely," Trump said. "We have our top representatives going there this weekend to further the deal," he said. The U.S. is taking in "billions and billions of dollars right now in tariff money, and for a period of time that will stay."
The Office of the U.S. Trade Representative issued another list of product exclusions from Section 301 tariffs on goods from China, granting full or partial exemptions for 87 separate exclusion requests, according to a pre-publication copy of a notice posted to the agency’s website March 20. The product exclusions apply retroactively to July 6, 2018, the date the first set of tariffs took effect, and will remain in effect until one year after USTR publishes the notice in the Federal Register.
International Trade Today is providing readers with some of the top stories for March 11-15 in case they were missed.