USTR Wants to Hear From Companies That Benefit From Section 301 Tariffs; Tai Says Changes Possible

The Office of the U.S. Trade Representative released a notice May 3 that asks companies that benefit from the Section 301 tariffs on List 1 to tell USTR if they think the tariffs should continue. They can comment May 7 to July 5. Companies that benefit from the tariffs on List 2 can comment June 24 to Aug. 22.

If there are firms that ask for the tariffs to continue, then the USTR will open another comment period. In that round, USTR will be open to arguments about "the effectiveness of the action in achieving the objectives of Section 301, other actions that could be taken, and the effects of such actions on the United States economy, including consumers," the notice said.

The office put out a FAQ that noted this is not the time to register opposition to continuing the tariffs, and that companies that benefit from both List 1 and 2 should file separately during the respective comment periods. Comments by companies that benefited from tariffs on Lists 3 and 4a products can be submitted in either period.

As the process of reviewing Section 301 tariffs on Chinese imports begins, USTR Katherine Tai left the door slightly open to reevaluating the tariffs in light of inflation. In a Q&A with Marketplace host Kai Ryssdal at the Milken Institute Global Conference, she said, "With respect to the real pain and the real anxieties that people here -- Americans, but actually people in large swaths of the world right now are confronting with rising prices -- what I would say is this: Yes, we need to be looking at our economic policy tools across the board. You want to look at tariffs? Sure, let’s look at tariffs. But also, let’s look at monetary policy, fiscal policy, let’s look at tax policy. All of these tools you need to look at."

While the administration can look at tariffs, Tai added, "we need to make sure whatever we do right now, first of all, is effective and, second of all, doesn’t undermine the medium-term design and strategy that we know we need to pursue.”

The U.S. needs to pursue a strategy that makes it less reliant on China for some goods, she said, giving as an example the inputs needed to make medical masks, or components for ventilators.

"This world was not built for resilience," she said, describing how supply chains had developed over the past 20 years. When the COVID-19 pandemic hit, she said, "you start to realize pieces of this supply chain, whether it's ventilators or masks, we no longer had the basic pieces of the supply chain here to be able to adapt very quickly." So, she said, "We actually want to build a global economy that's going to deliver different results. Not just focused on maximizing trade flows; not just focused on efficiency, chasing the lowest cost."

She said she understands importers' nostalgia for the time before the China trade war and the pandemic, but she also implied that it's a good thing that the tariffs have pushed firms to move production out of China.

In the Q&A, Tai pushed back on Ryssdal's argument that American consumers expect low prices and a wide variety, which imports have provided.

Tai said companies are already starting to shift away from always looking for the lowest-cost source of goods. She said the system needs to be sustainable, "not just for our planet but for our people."