Administration Still Weighing Changes to Section 301 Tariffs

The Biden administration's approach to changing Section 301 tariffs is "a work in progress," said Sarah Bianchi, a deputy U.S. trade representative, while at a May 11 National Council of Textile Organizations conference. Her comments, which avoided directly answering a question of whether the administration position is that tariffs on apparel are not strategic, came a day after President Joe Biden told reporters that administration officials are discussing whether any Section 301 tariffs should be lowered or removed, "and no decision has been made on it."

White House Press Secretary Jen Psaki elaborated that the administration "didn’t feel that the [tariffs] that were in place when the President took office were all advantageous and were doing what they needed to do to make clear what our positions were on China’s approach to investment and economic engagement, which we’ve obviously been clear about our issues with.

"And we have -- but we are -- we are continuing to review where it would be advantageous to take steps that would help ... increase wages and help certain industries that are -- that are impacted by these tariffs in a way that -- that we don’t feel is effective.

"So, there will be more [action] and he’s continuing to weigh them. But Ambassador [Katherine] Tai is -- is leading that effort."

The U.S. “tariff war” on China does "nobody" any good, and “it’s time for the U.S. administration to reconsider and to cancel it as early as possible,” a Chinese Foreign Affairs Ministry spokesperson said during a May 11 news conference, according to a transcript provided in English. “Tariffs imposed unilaterally by the U.S. on China are not in the interest of China, the U.S. or the whole world,” the spokesperson said.

Tai has said publicly that more tariff exclusions would be offered if warranted, but her office, the Office of the U.S. Trade Representative, asked Senate Democrats to strip out an element of that chamber's trade title that directs the agency to reinstitute a broad exclusion process that would weigh the effect on costs for small businesses and consumers. The language does allow USTR to decide not to start such a process if she believes it would undermine the goal of the Section 301 action.

Bianchi told NCTO CEO Kimberly Glas that USTR is required to evaluate the Section 301 tariffs, now that they've been in place for four years, and look at what's worked and what hasn't. "We’ll be taking a lot of input," she said, with a goal of trying "to make this as strategic as possible."

Commerce Secretary Gina Raimondo was asked during an appropriations hearing in the Senate on May 11 if the administration should remove some tariffs to fight inflation. "We have been able to eliminate the Trump 232 tariffs on steel and aluminum from the EU, Japan and the UK, and I have heard from industries that consume steel and aluminum that this has been a benefit," she replied. "What the president has said with respect to the 301 tariffs, the China tariffs, is that ... we don't believe that [President Donald] Trump's process was strategic. So as the president said yesterday, we right now, as a team, are in the middle of an evaluation. Obviously it's USTR that leads in that effort. but the president has been clear we need to look at every tool in our toolbox to fight inflation." Sen. Dianne Feinstein, D-Calif., asked in a follow-up if that means it's not inconceivable that some tariffs could be removed, and Raimondo agreed.

At NCTO, Glas also asked Bianchi if USTR supports House Ways and Means Trade Subcommittee Chairman Earl Blumenauer's proposal to bar Chinese exports from qualifying for de minimis treatment. Bianchi didn't explicitly say yes, but said that the provision can be misused. "We are continuing to monitor how this issue is addressed in the conference committee." She said that if that provision doesn't end up in the compromise, "we want to work with you on what other avenues there are to address these issues."