China 301 Tariff Update & Refresher


As the United States continues to battle the Covid-19 pandemic, the Office of the U.S. Trade Representative (USTR) is requesting public comments on whether to continue excluding certain medical supplies from the Special 301 tariffs imposed on imports from China.

Here is a little background to bring everyone up to speed.

Back in 2018 and 2019, the United States (under President Trump) began imposing additional tariffs on products imported from China, with the goal of forcing China to make changes to what the U.S. deemed as unfair trade practices. The decision was made following an investigation of China’s acts, policies, and practices, conducted under Section 301 of the Trade Act of 1974. Thus, the tariffs are often referred to as the China Tariffs or 301 Tariffs.

In total, there were four rounds of tariffs, broadening the scope of affected products (products impacted are often noted as being part of the four lists or four tranches). Each of the notices are available here: 1) 83 FR 28719 (June 20, 2018); 2) 83 FR 40823 (August 16, 2018); 3) 83 FR 47974 (September 21, 2018) as modified by 83 FR 49153 (September 28, 2018); and 4) 84 FR 43304 (August 20, 2019) as modified by 84 FR 69447 (December 18, 2019) and 85 FR 3741 (January 22, 2020).

As part of the process, for each tranche, USTR allowed U.S. stakeholders to request the exclusion of particular products that were not adequately available in the United States. USTR also established a process by which U.S. stakeholders could request the extension of particular exclusions.

On March 25, 2020, USTR requested public comments on whether it should modify its initial action (i.e. imposing the tariffs on the four tranches) to remove Section 301 duties from specific medical-care products to address the Covid-19 pandemic.

On December 29, 2020, USTR announced the extension of 80 product exclusions on medical-care and Covid response products, as well as 19 additional product exclusions. The full list can be found in the annexes of that Federal Register notice. It includes various sewn product and textile-related personal protective equipment.

On March 10, 2021, USTR announced the extension of these 99 exclusions until September 30, 2021; and that USTR might consider further extensions and/or modifications as appropriate.

This brings us to the current request.

On August 27, 2021, USTR published a “Request for Comments on Certain Products Exclusions Related to COVID–19: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation.” The agency is looking for input on whether it should extend the exclusions on those 99 medical-care products past the September 30th expiration. The Federal Register notice explains:

“With the recent spread of the Delta variant, COVID-19 cases in the United States are increasing again. In light of these changing circumstances, including the ability of the United States to obtain certain products domestically or from other sources, USTR is requesting public comments on whether to extend particular exclusions for COVID-19 products for up to six months.”

Comments must be submitted by September 27, 2021. Commenters are asked to identify the specific exclusion for which they support or oppose extension, and to provide the basis for their support or opposition.

“USTR will evaluate each exclusion on a case-by-case basis. The evaluation will examine whether it remains appropriate to exclude certain products from the additional Section 301 duties in light of recent developments including the spread of the Delta variant in the United States and increased domestic production of certain products, and taking account of the overall impact of these exclusions on the goal of obtaining the elimination of China's acts, policies, and practices covered in this Section 301 investigation.”

To submit comments, go to the USTR portal and look for “Comments: Modifications to COVID-19 Exclusions.” You can also access the public docket and read the comments that have been submitted so far.

In related news, the Biden administration is reportedly weighing a new investigation into Chinese industrial subsidies and their damage to the U.S. economy, an effort that could potentially lead to new sanctions on Chinese imports and further strain U.S.-China relations. Read more in Bloomberg or The Wall Street Journal.

We will continue to monitor this new development and update our readers as needed.

Check out the monthly Trade & Policy Update for more government-related news.

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