International Trade Today is providing readers with some of the top stories for Sept. 24-28 in case they were missed.
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 International Trade Commission issued Revision 12 to the Harmonized Tariff Schedule. The relatively comprehensive update implements as of Oct. 1 new provisions for wood products agreed to by the World Customs Organization, and adds new subheadings for pesticide-impregnated bed nets in Chapter 63. Other changes include new provisions for the third, $200 billion list of 10 percent Section 301 tariffs that took effect for goods from China beginning Sept. 24, as well as new exemptions for certain products from Section 201 safeguards on solar cells that took effect Sept. 19.
The Office of the U.S. Trade Representative is amending the list of goods from China newly subject to 10 percent Section 301 tariffs to remove frozen salmon and make conforming changes to subheadings covering wood. Effective Sept. 24, USTR is removing from the list subheadings 0304.81.10 and 0304.81.50, which cover frozen salmon, in order “to account fully for the extensive public comments and testimony previously provided” in the Section 301 investigation.
International Trade Today is providing readers with some of the top stories for Sept.17-21 in case they were missed.
CBP created Harmonized System Update (HSU) 1815 on Sept. 21, containing 1,230 Automated Broker Interface records and 306 harmonized tariff records, it said in a CSMS message. This update includes modifications related to the imposition of the third tranche of Section 301 tariffs on China (see 1809210026), as well as changes to Chapter 63 related to a new subheading for bed nets. The update also includes some updates related to the enactment of H.R. 4318, the Miscellaneous Tariff Bill Act of 2018 (see 1809140004). "Please be aware that only a portion of the records have been added thus far, and have been included in this update. This effort is ongoing and will continue until all changes have been completed," CBP said. The MTB changes are effective Oct. 13.
On the first day of tariff collection for the third phase of the U.S.-China trade war, another 5,745 products became subject to 10 percent higher levies, with the threat of an additional 15 percent levy on those products following in a little more than three months.
Two U.S. manufacturers seek the imposition of new antidumping and countervailing duties on aluminum wire and cable from China, they said in a petition filed with the Commerce Department and the International Trade Commission Sept. 21. 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.
Importers of products covered by the new third set of 10 percent Section 301 tariffs on China will file under two new tariff provisions in Chapter 99 beginning at 12:01 a.m. EDT on Sept. 24, according to a notice published Sept. 21 by the Office of the U.S. Trade Representative. New subheading 9903.88.03 will cover the vast majority of new products subject to tariffs that fall in 8-digit subheadings fully subject to Section 301 tariffs. New subheading 9903.88.04, on the other hand, covers a set of 11 8-digit subheadings that are only partially covered and have exceptions at the 10-digit level.
With the “great news” that Element Electronics persuaded the Trump administration to remove liquid crystal display (LCD) panels and motherboards under the Harmonized Tariff Schedule 9013.80.90 and 8529.90.13 headings from the third tranche of Section 301 tariffs set to take effect Sept. 24 (see 1809170051), Element’s Winnsboro, South Carolina, LCD TV assembly factory “will remain open!,” it emailed retail customers Walmart and Target. “Thanks again for supporting Element -- the only major television brand assembling TVs in America.” Element had said in public hearings that it would be forced to shutter the factory and terminate the remaining 126 jobs there if tariffs on the components it sources from China went through because the prohibitively higher costs would have forced the company to import finished TVs from China rather than assemble them in Winnsboro.
China, which previously asked for consultations with the U.S. at the World Trade Organization over steel and aluminum tariffs and two previous rounds of Section 301 tariffs (see 1808270020), asked on Sept.18 for consultations on tariffs that will be levied next week on $200 billion in Chinese goods. As with the previous cases, China says the measures violate WTO rules by imposing higher tariffs on China than on other countries, by exceeding U.S.-agreed bound rates, and because the U.S. did not go through the dispute resolution system at the WTO before acting.