USTR General Counsel: Section 301 Tariff Review Does Not Freeze Decision-Making

Greta Peisch, general counsel at the Office of the U.S. Trade Representative, said that the USTR will spell out in an upcoming Federal Register notice what opponents to Section 301 tariffs should address as they critique the effectiveness of the tariffs on the vast majority of imports from China, and what information the office would find useful as they undertake the review of the tariffs.

She said the statute has no deadline on how long the review should take, and is not clear about what should be considered in terms of judging the effectiveness of the action. She made no prediction on how long the review would take, but said it is likely to take months. "In part, it will be driven by the volume of responses that we receive," she said, but they want to finish as quickly as possible, while still giving all the comments proper consideration.

"Thinking about exclusions, or thinking about changes to the tariff action otherwise, it is something we are examining apart from the review. The information we get through the review will help us as we continue to think through those issues. It is certainly possible that an exclusion process or some other action will go forward before that review is finished. We don't view the review as putting a standstill on [making changes to] the tariffs."

Peisch also acknowledged that the changes that China made to its economic policies in response to the Section 301 tariffs were at the margins, and that when you look at the Section 301 action, earlier World Trade Organization disputes or negotiations, "none of this has changed fundamentally how China operates. Maybe it was a mistake to think it ever would."

She said U.S. policymakers have to be realistic about how much China is going to change its approach.

"Tariffs certainly can't be the beginning, the middle and the end of that story," she said. It is having leverage and using it to try to get change, to try to get specific actions from China. It is also accepting how they operate, thinking about the things we can do live in that world. Whether that's making adjustments ourselves in areas where we have strengths, whether it is thinking about having new types of arrangements with our partners, like IPEF [the Indo-Pacific Economic Framework] ... or other dialogues we're having where we're trying to uplift this issue. Or it's thinking about our trade laws and other laws and whether they're really designed for the challenges we have today, the challenges we see from China," she said.

Peisch was part of a panel May 25 at the Georgetown Law International Trade Update. which also addressed whether the trade tensions with China, as well as populist sentiment more broadly, will change the trends of globalization.

Michael Smart, a principal at Rock Creek Consulting, said that peak globalization was about seven or eight years ago, but that doesn't mean you "see the drawbridge pulling up." In fact, Smart said, the level of coordination on semiconductor production that is envisioned between the U.S., European Union, Japan and South Korea represents more intensive international cooperation than what came before.

Jennifer Hillman, who was once a general counsel at USTR and now teaches at Georgetown Law, said that services and investment will remain globalized, no matter how trade in goods is affected by climate change, tensions with China or other factors. "You can't really put the genie back in the bottle of globalization, it's really recalibration," Peisch said.